Arlington, VA, August 5, 2013 — The National Rural Electric Cooperative Association (NRECA) expressed concern with the Rural Utilities Service’s (RUS) new Rural Determination rule because it addresses one of the most fundamental aspects of the RUS program – the scope of RUS’s lending authority. While NRECA appreciates RUS’s efforts to make its loan requirements more transparent, this rule needs to be carefully crafted to ensure that RUS is fully and appropriately utilizing its lending authority.
Excerpts of the comments appear below, and the full text is available here (PDF).
- The proposed rule appears to expand RUS’s lending authority beyond the authority granted in the Rural Electrification Act (REAct)
- It does not appropriately implement the preference for not-for-profit borrowers required by the REAct
- It should be modified to clarify that all borrowers will be subject to RUS regulations and loan and mortgage requirements
- Appropriations and credit subsidy calculations for loans to entities that are not entitled to preference under the REAct should be separate from appropriations and credit subsidy calculations
The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.