Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 53 Pa.B. 8238 (December 30, 2023).

7 Pa. Code § 138a.10. Administration.

§ 138a.10. Administration.

 (a)  The Department of Commerce and the Department will jointly certify area loan organizations for the processing of loan applications. The area loan organizations shall enter into a contract with the Commonwealth specifying their respective duties and obligations.

   (1)  To receive certification, the area loan organization shall possess and demonstrate expertise in matters relating to agriculture and farm lending as evidenced by an acceptable loan review committee and professional staff support.

   (2)  An area loan organization may establish and charge, without prior Department approval, a service fee of not greater than $50 for each application received and reviewed and may establish and charge an additional service fee for each application given formal approval by the Secretary in an amount not to exceed $150 for an application of $100,000 or less and in an amount not to exceed $200 for applications greater than $100,000. Fees in excess of these amounts may only be established and charged upon application to and with prior approval of the Department.

 (b)  Only one area loan organization will be certified for a particular county or group of counties, unless a local organization demonstrates strong reasons to permit multiple designations for a geographic area.

   (1)  The lender may, after consulting with the borrower, submit the application either to an area loan organization or directly to the Department of Commerce.

   (2)  The area loan organization, if utilized, shall review the application and make its initial recommendation based on the criteria in §  138a.9 (relating to review of application) and forward the application to the Department of Commerce. The area loan organization shall make the recommendation within 30 days of receipt of the completed application from the lender.

 (c)  Within 30 days of receipt of a properly submitted and documented application, the Secretary of Commerce will conduct a financial review of the application and recommend approval, approval with special conditions or rejection of the application on the basis of the recommendation of the area loan organization, if utilized, and the criteria in §  138a.9.

 (d)  The Secretary of Commerce will forward the recommendation to the Secretary.

 (e)  The Committee will review the application and make a recommendation regarding approval or disapproval of the application to the Secretary based on the vote of a majority of the quorum present at the meeting. If the Committee does not submit its recommendation to the Secretary within 90 days, the Committee will be deemed to have recommended approval of the application.

 (f)  The Secretary will grant an interest deferral or loan guarantee to an applicant only after consideration of a recommendation made by the Committee and the recommendation of the Secretary of Commerce and only in accordance with the eligibility criteria and loan limits prescribed. The Secretary may grant an interest deferral or a loan guarantee in a lesser amount and on less favorable terms than recommended by the Committee or the Secretary of Commerce and may impose conditions not recommended by the Committee or the Secretary of Commerce. The Secretary will make a determination within 10 days after receipt of the approved application from the Committee.

 (g)  The Secretary will not approve an application for a loan guarantee or interest deferral which will cause the Commonwealth’s total liability for payments on loans still outstanding to exceed $10 million.

 (h)  Before an application is approved, the Secretary, on behalf of the Commonwealth, will enter into a contract with the lender and borrower specifying the terms and conditions of the loan guarantee or interest deferral.



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