7 U.S. Code § 2009cc–5 - Issuance and guarantee of trust certificates
The Secretary may issue trust certificates representing ownership of all or a fractional part of debentures issued by a rural business investment company and guaranteed by the Secretary under this subchapter, if the certificates are based on and backed by a trust or pool approved by the Secretary and composed solely of guaranteed debentures.
(1) In general
The Secretary may, under such terms and conditions as the Secretary considers appropriate, guarantee the timely payment of the principal of and interest on trust certificates issued by the Secretary or agents of the Secretary for purposes of this section.
Each guarantee under this subsection shall be limited to the extent of principal and interest on the guaranteed debentures that compose the trust or pool.
(3) Prepayment or default
(A) In general
(ii) Reduction of guarantee Subject to clause (i), if a debenture in a trust or pool is prepaid, or in the event of default of such a debenture, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest the prepaid debenture represents in the trust or pool.
Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Secretary only through the date of payment of the guarantee.
(c) Full faith and credit of the United States
(d) Subrogation and ownership rights
If the Secretary pays a claim under a guarantee issued under this section, the claim shall be subrogated fully to the rights satisfied by the payment.
(e) Management and administration
The Secretary shall provide for a central registration of all trust certificates issued under this section.
(2) Creation of pools
The Secretary may—
(A) maintain such commercial bank accounts or investments in obligations of the United States as may be necessary to facilitate the creation of trusts or pools backed by debentures guaranteed under this subchapter; and
(3) Fidelity bond or insurance requirement
Any agent performing functions on behalf of the Secretary under this paragraph shall provide a fidelity bond or insurance in such amount as the Secretary considers to be necessary to fully protect the interests of the United States.
(4) Regulation of brokers and dealers
The Secretary may regulate brokers and dealers in trust certificates issued under this section.
Source(Pub. L. 87–128, title III, § 384F, as added Pub. L. 107–171, title VI, § 6029,May 13, 2002, 116 Stat. 393; amended Pub. L. 110–234, title VI, § 6027(a),May 22, 2008, 122 Stat. 1182; Pub. L. 110–246, § 4(a), title VI, § 6027(a),June 18, 2008, 122 Stat. 1664, 1943.)
Pub. L. 110–234and Pub. L. 110–246made identical amendments to this section. The amendments by Pub. L. 110–234were repealed by section 4(a) ofPub. L. 110–246.
2008—Subsec. (b)(3)(A). Pub. L. 110–246, § 6027(a), added cl. (i), designated existing provisions as cl. (ii), inserted heading, and substituted “Subject to clause (i), if” for “In the event”.
Effective Date of 2008 Amendment