Participation

Participation means the sale of an interest in a loan by the lead lender to one or more participating lenders wherein the lead lender retains the note, collateral securing the note, and all responsibility for managing and servicing the loan. Participants have credit risk and are dependent upon the lead lender for protection of their interests in the loan. The relationship is typically formalized by a participation agreement between the lenders. The participant lender and the borrower have no rights or obligations to one another.

Source

7 CFR § 5001.3

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Scoping language

The following definitions are applicable to the capitalized terms used in this part.

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