7 CFR 1427.172 - Settlement.
(a) A producer may, at any time before maturity of the loan, obtain release of all or any part of the loan seed cotton by paying to CCC the amount of the loan, plus interest and charges.
(1) A producer or the producer's agent must not remove from storage any cotton that is pledged as collateral for a loan until prior written approval has been received from CCC for removal of the cotton. If a producer or the producer's agent obtains CCC approval, they may remove the cotton from storage, sell the seed cotton, have it ginned, and sell the resulting lint cotton and cottonseed. The ginner must inform the FSA county office in writing immediately after the seed cotton removed from storage has been ginned and furnish the county office the loan number, producer's name, and applicable gin bale numbers. If the seed cotton is removed from storage, the loan principal plus interest and charges must be paid not later than the earlier of:
(i) The date established by the county committee;
(ii) 5 days after the date of the producer received the AMS classification under § 1427.9 (and the warehouse receipt, if the cotton is delivered to a warehouse), representing such cotton; or
(iii) The loan maturity date.
(2) If the seed cotton or lint cotton is sold, the loan principal, interest, and charges must be satisfied immediately.
(3) A producer, except a CMA, may obtain a nonrecourse loan or LDP under subpart A of this part, on the lint cotton, but:
(i) The loan principal, interest, and charges on the seed cotton must be satisfied from the proceeds of the nonrecourse loan under subpart A of this part; or
(ii) The LDP must be applied to the loan principal, interest, and charges on the outstanding seed cotton loan.
(4) A CMA must repay the seed cotton loan principal, interest, and charges before pledging the cotton for a nonrecourse loan or before an LDP can be approved under subpart A of this part, on the lint cotton. If a CMA, which is authorized by producers to obtain loans in their behalf, removes seed cotton from storage before obtaining approval to move the cotton, the removal will constitute conversion of the cotton unless the CMA:
(i) Notifies the FSA county office in writing the following morning by mail or otherwise that such cotton has been moved and is on the gin yard;
(ii) Furnishes CCC an irrevocable letter of credit if requested; and
(iii) Repays the loan principal, plus interest and charges, within the time specified by the county committee.
(5) Any removal from storage will not be deemed to constitute a release of CCC's security interest in the seed cotton or to release the producer or CMA from liability for the loan principal, interest, and charges if full payment of such amount is not received by the FSA county office.
(c) If, either before or after maturity, the producer discovers that the cotton is going out of condition or is in danger of going out of condition, the producer must immediately notify the FSA county office and confirm such notice in writing. If the county committee determines that the cotton is going out of condition or is in danger of going out of condition, the county committee will accelerate the maturity date and request repayment of the loan principal, plus interest and charges on or before a specified date. If the producer does not repay the loan or have the cotton ginned and obtain a nonrecourse loan under subpart A of this part on the resulting lint cotton within the period specified by the county committee, the cotton will be considered abandoned.
(d) If the producer has control of the storage site and if the producer subsequently loses control of the storage site or there is danger of flood or damage to the seed cotton or storage structure making continued storage of the cotton unsafe, the producer must immediately either repay the loan or move the seed cotton to the nearest approved gin for ginning and must, at the same time, inform the FSA county office. If the producer does not do so, the seed cotton will be considered abandoned.
(e) CCC will not assume any loss in quantity or quality of the loan collateral for recourse seed cotton loans.
Title 7 published on 2015-01-01
The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 7 CFR Part 1427 after this date.