[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: 12CFR617.7010]



[Page 203-204]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 617_BORROWER RIGHTS--Table of Contents

 

                            Subpart A_General

 

Sec. 617.7010  May borrower rights be waived?



    (a) A qualified lender may not obtain a waiver of borrower rights, 

except as indicated in paragraphs (b) and (c) of this section.

    (b) A borrower may waive rights relating to distressed loan 

restructuring, credit reviews, and the right of first refusal when a 

loan is guaranteed by the Small Business Administration or in connection 

with a loan sale as provided in Sec. 617.7015. Waivers obtained 

pursuant to this paragraph must be voluntary and in writing. The 

document evidencing the waiver must clearly explain the rights the 

borrower is being asked to waive.

    (c) A borrower may waive all borrower rights provided for in part 

617 of these regulations in connection with a loan syndication 

transaction with non-System lenders that are otherwise not required by 

section 4.14A(a)(6) of the Act to provide borrower rights. For purposes 

of this paragraph, a ``loan syndication'' is a multi-lender transaction 

in which each member of the



[[Page 204]]



lending syndicate has a direct contractual relationship with the 

borrower, but does not include a transaction created for the primary 

purpose of avoiding borrower rights. Waivers obtained pursuant to this 

paragraph must be voluntary and in writing. The document evidencing the 

waiver must clearly disclose the rights the borrower is waiving. 

Additionally, the borrower's written waiver must contain a statement 

that the borrower was represented by legal counsel in connection with 

execution of the waiver.



[69 FR 10907, 10908, Mar. 9, 2004, as amended at 70 FR 18968, Apr. 12, 

2005]