[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR614.4350]



[Page 126]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

                  Subpart J_Lending and Leasing Limits

 

Sec. 614.4350  Definitions.



    Source: 58 FR 40321, July 28, 1993, unless otherwise noted.





    For purposes of this subpart, the following definitions shall apply:

    (a) Borrower means an individual, partnership, joint venture, trust, 

corporation, or other business entity to which an institution has made a 

loan or a commitment to make a loan either directly or indirectly. 

Excluded are a Farm Credit System association or other financing 

institution that comply with the criteria in section 1.7(b) of the Act 

and the regulations in subpart P of this part. For the purposes of this 

subpart, the term ``borrower'' includes any customer to whom an 

institution has made a lease or a commitment to make a lease.

    (b) Commitment means a legally binding obligation to extend credit, 

enter into lease financing, purchase or participate in loans or leases, 

or pay the obligation of another, which becomes effective at the time 

such commitment is made.

    (c) Loan means any extension of, or commitment to extend, credit 

authorized under the Act whether it results from direct negotiations 

between a lender and a borrower or is purchased from or discounted for 

another lender. This includes participation interests. The term ``loan'' 

includes loans and leases outstanding, obligated but undisbursed 

commitments to lend or lease, contracts of sale, notes receivable, other 

similar obligations, guarantees, and all types of leases. An institution 

``makes a loan or lease'' when it enters into a commitment to lend or 

lease, advances new funds, substitutes a different borrower or lessee 

for a borrower or lessee who is released, or where any other person's 

liability is added to the outstanding loan, lease or commitment.

    (d) Primary liability means an obligation to repay that is not 

conditioned upon an unsuccessful prior demand on another party.

    (e) Secondary liability means an obligation to repay that only 

arises after an unsuccessful demand on another party.



[58 FR 40321, July 28, 1993, as amended at 64 FR 34517, June 28, 1999]