[Code of Federal Regulations]
[Title 12, Volume 6]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR608.812]

[Page 38]
 
                       TITLE 12--BANKS AND BANKING
 
                 CHAPTER VI--FARM CREDIT ADMINISTRATION
 
PART 608_COLLECTION OF CLAIMS OWED THE UNITED STATES--Table of Contents
 
              Subpart A_Administrative Collection of Claims
 
Sec. 608.812  Charges for interest, administrative costs, and penalties.

    (a) Except as provided in paragraph (d) of this section, the FCA 
shall:
    (1) Assess interest on unpaid claims;
    (2) Assess administrative costs incurred in processing and handling 
overdue claims; and
    (3) Assess penalty charges not to exceed 6 percent a year on any 
part of a debt more than 90 days past due. The imposition of charges for 
interest, administrative costs, and penalties shall be made in 
accordance with 31 U.S.C. 3717.
    (b)(1) Interest shall accrue from the date of mailing or hand 
delivery of the initial demand for payment or the Notice of Intent to 
Collect by either Administrative or Salary Offset if the amount of the 
claim is not paid within 30 days from the date of mailing or hand 
delivery of the initial demand or notice.
    (2) The 30-day period may be extended on a case-by-case basis if the 
FCA reasonably determines that such action is appropriate. Interest 
shall only accrue on the principal of the claim and the interest rate 
shall remain fixed for the duration of the indebtedness, except, as 
provided in paragraph (c) of this section, in cases where a debtor has 
defaulted on a repayment agreement and seeks to enter into a new 
agreement, or if the FCA reasonably determines that a higher rate is 
necessary to protect the interests of the United States.
    (c) If a debtor defaults on a repayment agreement and seeks to enter 
into a new agreement, the FCA may assess a new interest rate on the 
unpaid claim. In addition, charges for interest, administrative costs, 
and penalties which accrued but were not collected under the original 
repayment agreement shall be added to the principal of the claim to be 
paid under the new repayment agreement. Interest shall accrue on the 
entire principal balance of the claim, as adjusted to reflect any 
increase resulting from the addition of these charges.
    (d) The FCA may waive charges for interest, administrative costs, 
and/or penalties if it determines that:
    (1) The debtor is unable to pay any significant sum toward the claim 
within a reasonable period of time;
    (2) Collection of charges for interest, administrative costs, and/or 
penalties would jeopardize collection of the principal of the claim;
    (3) Collection of charges for interest, administrative costs, or 
penalties would be against equity and good conscience; or
    (4) It is otherwise in the best interest of the United States, 
including the situation where an installment payment agreement or offset 
is in effect.

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