
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 12USC2199]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
     SUBCHAPTER IV--PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF 
                       INSTITUTIONS OF THE SYSTEM
 
             Part C--Rights of Borrowers; Loan Restructuring
 
Sec. 2199. Disclosure


(a) In general

    In accordance with regulations of the Farm Credit Administration, 
qualified lenders shall provide to borrowers, for all loans that are not 
subject to the Truth in Lending Act (15 U.S.C. 1601 et seq.), meaningful 
and timely disclosure not later than the time of the loan closing, of--
        (1) the current rate of interest on the loan;
        (2) in the case of an adjustable or variable rate loan, the 
    amount and frequency by which the interest rate can be increased 
    during the term of the loan or, if there are no such limitations, a 
    statement to that effect, and the factors (including the cost of 
    funds, operating expenses, and provision for loan losses) that will 
    be taken into account by the qualified lender in determining 
    adjustments to the interest rate;
        (3) the effect, as shown by a representative example or 
    examples, of any loan origination charges or purchases of stock or 
    participation certificates on the effective rate of interest;
        (4) any change in the interest rate applicable to the borrower's 
    loan, and notice to the borrower of a change in the interest rate 
    applicable to the loan of the borrower may be made within a 
    reasonable time after the effective date of an increase or decrease 
    in the interest rate;
        (5) except with respect to stock guaranteed under section 2162 
    of this title, a statement indicating that stock that is purchased 
    is at risk; and
        (6) a statement indicating the various types of loan options 
    available to borrowers, with an explanation of the terms and 
    borrowers' rights that apply to each type of loan.

(b) Differential interest rates

    A qualified lender offering more than one rate of interest to 
borrowers shall, at the request of a borrower of a loan--
        (1) provide a review of the loan to determine if the proper 
    interest rate has been established;
        (2) explain to the borrower in writing the basis for the 
    interest rate charged; and
        (3) explain to the borrower in writing how the credit status of 
    the borrower may be improved to receive a lower interest rate on the 
    loan.

(Pub. L. 92-181, title IV, Sec. 4.13, as added Pub. L. 99-205, title 
III, Sec. 301(b), Dec. 23, 1985, 99 Stat. 1707; amended Pub. L. 100-233, 
title I, Secs. 103, 109, Jan. 6, 1988, 101 Stat. 1579, 1584; Pub. L. 
104-105, title II, Sec. 207, Feb. 10, 1996, 110 Stat. 173.)

                       References in Text

    The Truth in Lending Act, referred to in subsec. (a), is title I of 
Pub. L. 90-321, May 29, 1968, 82 Stat. 146, as amended, which is 
classified generally to subchapter I (Sec. 1601 et seq.) of chapter 41 
of Title 15, Commerce and Trade. For complete classification of this Act 
to the Code, see Short Title note set out under section 1601 of Title 15 
and Tables.


                            Prior Provisions

    A prior section 4.13 of Pub. L. 92-181, title IV, Dec. 10, 1971, 85 
Stat. 613, was renumbered section 4.13B by Pub. L. 99-205, title III, 
Sec. 301(a), Dec. 23, 1985, 99 Stat. 1707, and is classified to section 
2201 of this title.


                               Amendments

    1996--Subsec. (a)(4). Pub. L. 104-105 inserted before semicolon at 
end ``, and notice to the borrower of a change in the interest rate 
applicable to the loan of the borrower may be made within a reasonable 
time after the effective date of an increase or decrease in the interest 
rate''.
    1988--Pub. L. 100-233, Sec. 109, designated existing provisions as 
subsec. (a), inserted heading, and added subsec. (b).
    Pub. L. 100-233, Sec. 103, amended section generally, substituting 
introductory provisions and cls. (1) to (6) for former subsecs. (a) and 
(b).


                             Effective Date

    Section effective thirty days after Dec. 23, 1985, see section 401 
of Pub. L. 99-205, set out as an Effective Date of 1985 Amendment note 
under section 2001 of this title.
