[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: 12CFR614.4800]



[Page 141]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

Subpart Q_Banks for Cooperatives and Agricultural Credit Banks Financing 

                           International Trade

 

Sec. 614.4800  Guarantees and contracts of suretyship.



    A bank for cooperatives or an agricultural credit bank, under a 

policy approved by the bank's board of directors, may lend its credit, 

be itself a surety to indemnify another, or otherwise become a guarantor 

if an eligible cooperative substantially benefits from the performance 

of the transaction involved. A bank may guarantee the debt of eligible 

cooperatives and foreign parties or otherwise agree to make payments on 

the occurrence of readily ascertainable events if the guarantee or 

agreement specifies a maximum monetary liability. Guarantees may be 

secured or unsecured, and can include, but are not limited to, such 

events as nonpayment of taxes, rentals, customs duties, costs of 

transport, and loss of or nonconformance of shipping documents. The 

bank's customer shall have an unqualified obligation to reimburse the 

bank for payments made under a guarantee or surety.



[55 FR 24887, June 19, 1990, as amended at 62 FR 4445, Jan. 30, 1997]