The cost of borrower stock or participation certificates must be included in the effective interest rate calculation at the time the stock or participation certificate is purchased in connection with a loan transaction. For subsequent loans to existing borrowers, only the cost of new stock or participation certificates, if any, purchased in connection with a new loan or advance of new funds must be included in the effective interest rate calculation for the transaction.
authority: Secs. 4.13, 4.13A, 4.13B, 4.14, 4.14A, 4.14C, 4.14D, 4.14E, 4.36, 5.9, 5.17 of the Farm Credit Act (
12 U.S.C. 2199,
2200,
2201,
2202,
2202a,
2202c,
2202d,
2202e,
2219a,
2243,
2252
source: 69 FR 10907, 10908, Mar. 9, 2004, unless otherwise noted.
cite as: 12 CFR 617.7110