CFR > Title 12 - Banks and Banking > CHAPTER VI—FARM CREDIT ADMINISTRATION > SUBCHAPTER B—FARM CREDIT SYSTEM (parts 609 to 655) > PART 617—BORROWER RIGHTS > SUBPART B—Disclosure of Effective Interest Rates (§617.7100 to §617.7135) > 617.7130—What initial disclosures must a qualified lender make to a borrower?

617.7130—What initial disclosures must a qualified lender make to a borrower?

(a) Required disclosures—in general. A qualified lender must disclose in writing:
(1) The interest rate on the loan;
(2) The effective interest rate of the loan;
(3) The amount of stock or participation certificates that a borrower is required to purchase in connection with the loan and included in the calculation of the effective interest rate of the loan;
(4) All loan origination charges included in the effective interest rate;
(5) That stock or participation certificates that borrowers are required to purchase are at risk and may only be retired at the discretion of the board of the institution; and
(6) The various types of loan options available to borrowers, with an explanation of the terms and borrower rights that apply to each type of loan.
(b) Adjustable rate loans. A qualified lender must provide the following information for adjustable rate loans in addition to the requirements of paragraph (a) of this section:
(1) The circumstances under which the rate can be adjusted;
(2) How much the rate can be adjusted at any one time and how much the rate can be adjusted during the term of the loan;
(3) How often the rate can be adjusted;
(4) Any limitations on the amount or frequency of adjustments;
(5) The specific factors that the qualified lender may take into account in making adjustments to the interest rate on the loan; and
(6) If the borrower's interest rate is directly tied to a widely publicized external index:
(i) How and where the borrower may obtain information on changes to the index; and
(ii) When the qualified lender will provide written notice of changes to the borrower's interest rate.

Code of Federal Regulations

[69 FR 16459, Mar. 30, 2004, , as amended at 74 FR 67972, Dec. 22, 2009]