Guaranteed Loans-Retaining PLP Status and Payment of Interest Accrued During Bankruptcy and Redemption Rights Periods

The Farm Service Agency (FSA) is amending its regulations pertaining to the retention of Preferred Lender Program (PLP) status by lenders in certain situations, and the payment of interest in cases where the lender is unable to take action due to bankruptcy or state redemption laws. This rule will allow PLP lenders, under certain conditions, to retain their PLP status for a period, not to exceed two years, after their loss ratio exceeds the standard established by the Agency. It will also allow for the payment of additional interest on a final loss claim if a bankruptcy prevents the lender from taking liquidation action or a state's mandatory redemption law prevents the lender from disposing of property acquired through foreclosure.