Special Servicing of Telecommunications Programs Loans for Financially Distressed Borrowers
| Published date | 02 April 2021 |
| Citation | 86 FR 17274 |
| Record Number | 2021-06381 |
| Section | Rules and Regulations |
| Court | Rural Utilities Service |
Federal Register, Volume 86 Issue 62 (Friday, April 2, 2021)
[Federal Register Volume 86, Number 62 (Friday, April 2, 2021)]
[Rules and Regulations]
[Pages 17274-17275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06381]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1752
RIN 0572-AC41
Special Servicing of Telecommunications Programs Loans for
Financially Distressed Borrowers
AGENCY: Rural Utilities Service, USDA.
ACTION: Final rule; confirmation and response to comments.
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SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency
of the United States Department of Agriculture (USDA), is confirming
the final rule published in the Federal Register on February 25, 2020
to outline the general policies for servicing actions associated with
financially distressed borrowers from the Telecommunications
Infrastructure Loan Program, Rural Broadband Program, Distance Learning
and Telemedicine Program, Broadband Initiatives Program, and Rural e-
Connectivity Pilot Program. This document also provides the Agency an
opportunity to acknowledge the one public comment received on the final
rule.
DATES: Effective April 2, 2021, the final rule published February 25,
2020 at 85 FR 10555 is confirmed.
FOR FURTHER INFORMATION CONTACT: Laurel Leverrier, Assistant
Administrator Telecommunications Program, Rural Utilities Service, U.S.
Department of Agriculture (USDA), email: [email protected],
telephone: (202) 720-3416.
SUPPLEMENTARY INFORMATION: The Rural Utilities Service improves the
quality of life in rural America by providing investment capital for
deployment of rural telecommunications infrastructure. To achieve the
goal of increasing economic opportunity in rural America,
[[Page 17275]]
the Agency finances infrastructure that enables access to a seamless,
nationwide telecommunications network. With access to the same advanced
telecommunications networks as its urban counterparts--especially those
designed to accommodate distance learning, telework, and telemedicine--
rural America will eventually see improving educational opportunities,
health care, economies, safety and security, and ultimately higher
employment. The Telecommunications Infrastructure Loan Program, Rural
Broadband Program, Distance Learning and Telemedicine Program,
Broadband Initiatives Program and ReConnect Program (hereinafter
collectively referred to as the ``RUS Telecommunications Programs'')
provide loan funding to build and expand broadband and
telecommunications services in rural communities.
This final rule confirms the final rule that published in the
Federal Register on February 25, 2020 at 85 FR 10555, which outlines
the general policies and procedures for servicing actions associated
with the RUS Telecommunications Programs Borrowers in financial
distress with the mutual objective of avoiding or resolving a monetary
default of the RUS debt. This final rule will ensure that recipients
comply with the established objectives and requirements for loans,
repaying loans on schedule or within the revised terms as agreed to by
the Agency, and act in accordance with any necessary agreements. It
will also ensure that the Agency will handle servicing actions in a
consistent approach across all RUS Telecommunications Programs, as well
as protect the financial interest of the Agency.
Summary of Comments and Responses
RUS invited comments on the final rule published in the Federal
Register on February 25, 2020 at (85 FR 10555). While two comments were
received, one was not relevant to this rule. The only relevant comment,
submitted by NTCA-THE RURAL BROADBAND ASSOCIATION, contained four (4)
modifications/considerations relevant to the servicing rule (SR). The
Agency's responses are as follows:
Issue 1: NTCA recommends the creation of an interface to guide
staff and borrowers to the selection of the most appropriate loan
servicing option.
Agency Response: RUS agrees that the suggestion to have interface
with borrowers to receive guidance from the Agency is a suggestion
worth exploring and will take it under consideration. Since every
distressed borrower has distinct financial and legal issues, the agency
is considering issuing written guidance, such as FAQs, and
implementing, a help desk, or possibly even outreach events such as
webinars.
Issue 2: NTCA recommends the agency consider historic repayment
performance of borrowers (both individually and in the respective
programs) in reservicing proceedings.
Agency Response: In determining feasibility of any requested
action, the agency already takes into consideration the borrower's
historical and current financial information, which includes its
repayment history. Additionally, the required financial forecast
provides the Agency with the borrower's own assessment and prediction
as to repayment.
Issue 3: NTCA urges consideration of the utilization of waivers to
avoid ``unnecessary or onerous filings''.
Agency Response:
RUS is mindful of the timing and the cost associated with preparing
some of the required information to seek special servicing actions.
However, the agency needs to request the core documents for
consideration of all distressed borrowers so that all every borrower is
treated in the same manner. More importantly, these core documents are
the minimum financial information that is necessary to make an informed
decision on the servicing option.
With respect to the additional documents that may be requested by
the Agency under section 1752.6, the agency notes that only information
related to the specific servicing action will be requested. That said,
the borrower will have ample opportunity to suggest the most efficient
and cost-effective ways to provide this information to the RUS.
Issue 4: NTCA supports the conclusion of reservicing requests
within a reasonable timeframe.
Agency Response: RUS agrees that timing is often critical in
dealing with financially distressed borrowers whose resources may be
limited and are rapidly being depleted. It is nevertheless important
not to rush through a process which may lead to overlooking key factors
or result in outright errors which may waste precious time in the long
run.
As indicated above, most distressed borrowers have distinct
financial and legal issues which require different periods to resolve.
The time frame for completing a loan workout is a function of numerous
factors including: (1) The complexity and depth of the challenges
facing the borrower; (2) the completeness and quality of the
information provided with the initial request; (3) how much time since
the problems surfaced before the borrower seeks assistance; and (4) the
experience and qualifications of management and their team. The
availability of resources at RUS may also be a factor. As such, it
would not be in the best interest of any of the parties to establish a
set timeframe for servicing. Similarly, a ``fast track'' of the
process, or the use of waivers, may not produce the best possible
outcome for the borrower.
The RUS appreciates the interest of the NTCA-The Rural Broadband
Association (NTCA) with regard to the Special Servicing of
Telecommunications Programs Loans for Financially Distressed Borrowers
final rule and thanks them for their submission.
Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2021-06381 Filed 4-1-21; 8:45 am]
BILLING CODE 3410-15-P
