(a) A CMA may establish separate loan pools as needed for quantities of a commodity.
(b) Loans and, if applicable, LDP's will be available to CMA's for any eligible commodity in a loan pool as provided in paragraph (e) of this sectionand the beneficial interest provisions of parts 1421 and 1427 of this chapter.
(c) A pool shall be eligible for loans and LDP's if:
(1) All of the commodity in the pool is eligible for loans or LDP's, except as provided in paragraphs (d) and (e) of this section;
(2) The commodity was delivered by members to the CMA for their benefit;
(3) The commodity was delivered and the members are eligible for loans and LDP's;
(4) Members retain the right to share in marketing proceeds from the commodity in accordance with§ 1425.18; and
(5) Members agreed to accept a payment of initial advances from the CMA in accordance with§ 1425.18(a).
(d) Ineligible commodities may be included in eligible pools when:
(1) The CMA inadvertently included ineligible quantities based on grade, quality, bale weight or repacking in the case of cotton, or other factors; or
(2) There are eligibility discrepancies within FSA records, the producer has certified to the CMA that the commodity is eligible for loan, and there is no market gain or LDP involved in the loan pool for the crop year.
(e) A CMA may, for a period of time as specified in Handbook 1-CMA, include a commodity that is ineligible based on FSA records when the producer has certified to the CMA the commodity is eligible. In these instances, CCC specifies a time period during which CMA's may obtain loan or LDP's on the applicable quantity while the eligibility status is resolved. If the final resolution is that the commodity was ineligible, the CMA must repay any loans outstanding with principal plus interest and any market gains obtained plus interest from the date of receiving the market gain through the repayment date.
(f) The CMA must have in inventory a quantity of commodity delivered by members of each class and grade at least equal to the quantity each class and grade pledged as loan collateral.
(g) Loans will be available to the CMA for the quantity of a farm-stored commodity that is, pursuant to such CMA marketing agreement with a member, part of the CMA's loan pool.
(h) A CMA shall have identity-preserved loan pool commodities stored in approved warehouses while the commodities are pledged as collateral for loan.
(i) Loan eligibility for commingled commodities stored on a farm or in a warehouse may be transferred to an approved warehouse.
(j) Commodities pledged as collateral for CCC loans shall be free and clear of all liens and encumbrances based on a CMA's financial agreements or the CMA shall obtain a completed form CCC-679, Lien Waiver. When liens are applicable based on CMA financial agreements, the CMA shall provide CCC the completed CCC-679. CMA's shall not take any action to cause a lien or encumbrance to be placed on a commodity after a loan is approved.
(k) If a loan or LDP is obtained for any quantity in a loan pool, allocations of costs and expenses among separate pools for the commodity in the pool shall be made according to generally accepted accounting principles.
(l) A CMA shall not apply marketing losses from a commodity not used to obtain a loan or LDP against the marketing proceeds of a commodity used to obtain a loan or LDP.
(m) CMA's shall not carry forward losses from one loan pool and apply them against a subsequent loan pool without CCC's authorization. CCC may grant authorization when it determines that carrying forward the loss complies with CCC's loan and LDP program intent.
(n) The CMA is responsible to CCC for any loss related to commodities the CMA pledged as collateral for loan or used to obtain LDP related to:
(1) The CMA failing to comply with these regulations;
(2) Changes in quantity or quality of either warehouse or farm stored commodities; or
(3) Liens based on either the CMA's or its members' financial agreements.
Title 7 published on 2015-01-01.
The following are only the Rules published in the Federal Register after the published date of Title 7.
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This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.