12 CFR 621.7 - Rule of aggregation.

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There is 1 rule appearing in the Federal Register for 12 CFR 621. View below or at eCFR (GPOAccess)
§ 621.7 Rule of aggregation.
(a) When one loan to a borrower is placed in nonaccrual, an institution must immediately evaluate whether its other loans to that borrower, or related borrowers, should also be placed in nonaccrual. All loans on which a borrowing entity, or a component of a borrowing entity, is primarily obligated to the reporting institution shall be considered as one loan unless a review of all pertinent facts supports a reasonable determination that a particular loan constitutes an independent credit risk and such determination is adequately documented in the loan file.
(1) A loan shall be considered an independent credit risk if a substantial portion of the loan is guaranteed as to principal and interest by a government agency.
(2) Other loans shall be considered independent credit risks if and so long as:
(i) The primary sources of repayment are independent for each loan;
(ii) The loans are not cross-collateralized; and
(iii) The principal obligors are different person(s) and/or entity(ies). Related loans will not be considered independent credit risks if the operations of a related borrower are so financially interdependent with the borrower's operations that the economic survival of one will materially affect the economic survival of the other, determined in accordance with § 614.4359(a)(2) of this chapter.
(b) If the evaluation required by paragraph (a) of this section results in a determination that the borrower's other loans with the institution do not represent an independent credit risk, and full collection of such loans is not expected, then all of the borrower's loans must be aggregated and classified as nonaccrual. If such other loans represent an independent credit risk and are fully collectible, then they may remain in their current performance category.
(c) When an institution becomes aware that a borrower has a loan that has been classified nonaccrual by any other lender, the institution must re-evaluate the credit risk in its loan to the borrower and then determine whether an independent credit risk exists.
[58 FR 48786, Sept. 20, 1993, as amended at 64 FR 34519, June 28, 1999]

Title 12 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 12.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-02-26; vol. 79 # 38 - Wednesday, February 26, 2014
    1. 79 FR 10661 - Releasing Information; General Provisions; Accounting and Reporting Requirements; Reports of Accounts and Exposures
      GPO FDSys XML | Text
      FARM CREDIT ADMINISTRATION
      Notice of effective date.
      Effective date: Under the authority of 12 U.S.C. 2252, the regulation amending 12 CFR parts 602, 618, and 621 published on December 24, 2013 (78 FR 77557), is effective February 21, 2014. Compliance Date: All provisions of this regulation require compliance on the effective date, except the Reporting Entity's requirements under § 621.15(b)(1) through (6). We are delaying compliance with these requirements to allow for the development of and transition to the System's central data repository. We will publish the compliance date for these requirements in the Federal Register .
      12 CFR Parts 602, 618, and 621

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United States Code

Title 12 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR 621 after this date.

  • 2014-02-26; vol. 79 # 38 - Wednesday, February 26, 2014
    1. 79 FR 10661 - Releasing Information; General Provisions; Accounting and Reporting Requirements; Reports of Accounts and Exposures
      GPO FDSys XML | Text
      FARM CREDIT ADMINISTRATION
      Notice of effective date.
      Effective date: Under the authority of 12 U.S.C. 2252, the regulation amending 12 CFR parts 602, 618, and 621 published on December 24, 2013 (78 FR 77557), is effective February 21, 2014. Compliance Date: All provisions of this regulation require compliance on the effective date, except the Reporting Entity's requirements under § 621.15(b)(1) through (6). We are delaying compliance with these requirements to allow for the development of and transition to the System's central data repository. We will publish the compliance date for these requirements in the Federal Register .
      12 CFR Parts 602, 618, and 621