(a) In general
Except as provided in subsection (b), support provided by the Corporation under this subchapter shall be on such terms and conditions as the Corporation may prescribe.
(b) Requirements
The following requirements apply to support provided by the Corporation under this subchapter:
(1) The Corporation shall provide support using authorities under this subchapter only if it is necessary—
(A) to alleviate a credit market imperfection; or
(B) to achieve specified development or foreign policy objectives of the United States Government by providing support in the most efficient way to meet those objectives on a case-by-case basis.
(2) The final maturity of a loan made or guaranteed by the Corporation shall not exceed the lesser of—
(A) 25 years; or
(B) debt servicing capabilities of the project to be financed by the loan (as determined by the Corporation).
(3) The Corporation shall, with respect to providing any loan guaranty to a project, require the parties to the project to bear a risk of loss on the project in an amount equal to at least 20 percent of the amount of such guaranty. The Corporation shall continue to work with the President to streamline the process for securing waivers that would enable the Corporation to guarantee up to 100 percent of the amount of a loan, provided that risk of loss in the project borne by the parties to the project is equal to at least 20 percent of the guaranty amount.
(4) The Corporation may not make or guarantee a loan unless the Corporation determines that the borrower or lender is responsible and that adequate provision is made for servicing the loan on reasonable terms and protecting the financial interest of the United States.
(5) The interest rate for direct loans and interest supplements on guaranteed loans shall be set by reference to a benchmark interest rate (yield) on marketable Treasury securities or other widely recognized or appropriate benchmarks with a similar maturity to the loans being made or guaranteed, as determined in consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury. The Corporation shall establish appropriate minimum interest rates for loans, guaranties, and other instruments as necessary.
(6) The minimum interest rate for new loans as established by the Corporation shall be adjusted periodically to take account of changes in the interest rate of the benchmark financial instrument.
(7)(A) The Corporation shall set fees or premiums for support provided under this subchapter at levels that minimize the cost to the Government while supporting achievement of the objectives of support.
(B) The Corporation shall review fees for loan guaranties periodically to ensure that the fees assessed on new loan guaranties are at a level sufficient to cover the Corporation's most recent estimates of its costs.
(8) Any loan guaranty provided by the Corporation shall be conclusive evidence that—
(A) the guaranty has been properly obtained;
(B) the loan qualified for the guaranty; and
(C) but for fraud or material misrepresentation by the holder of the guaranty, the guaranty is presumed to be valid, legal, and enforceable.
(9) The Corporation shall prescribe explicit standards for use in periodically assessing the credit risk of new and existing direct loans or guaranteed loans.
(10) The Corporation may not make loans or loan guaranties except to the extent that budget authority to cover the costs of the loans or guaranties is provided in advance in an appropriations Act, as required by section
661c of title 2.
(11) The Corporation shall rely upon specific standards to assess the developmental and strategic value of projects for which it provides support and should only provide the minimum level of support necessary in order to support such projects.
(12) Any loan or loan guaranty made by the Corporation should be provided on a senior basis or pari passu with other senior debt unless there is a substantive policy rationale to provide such support otherwise.
(c) Best practices to prevent usurious or abusive lending by intermediaries
(1) In general
The Corporation shall ensure that terms, conditions, penalties, rules for collections practices, and other finance administration policies that govern Corporation-backed lending, guarantees and other financial instruments through intermediaries are consistent with industry best practices and the Corporation's rules with respect to direct lending to its clients.
(2) Truth in lending policies
The Corporation shall develop required truth in lending rules, guidelines, and related implementing policies and practices to govern secondary lending through intermediaries and shall report such policies and practices to the appropriate committees not later than 180 days of 1 December 18, 2025, with annual updates, as needed, thereafter.
(3) Policy development requirements
In developing such policies and practices required by paragraph (2), the Corporation shall—
(A) take into account any particular vulnerabilities generally faced by potential applicants or recipients of microlending and other forms of microfinance, such as lack of experience with lending or lack of financial literacy;
(B) develop and apply, generally, rules and terms to ensure Corporation-backed lending through an intermediary does not carry excessively punitive or disproportionate penalties for customers in default;
(C) ensure that such policies and practices include effective safeguards to prevent usurious or abusive lending by intermediaries, including in the provision of microfinance; and
(D) ensure the intermediary includes in any lending contract with microfinance borrowers that is supported by the Corporation an appropriate level of financial disclosure to the borrower, including—
(i) disclosures that explain in all material respects to the customer both lender and customer rights and obligations under the contract in language that is accessible to the customer;
(ii) the material loan terms and tenure of the contract;
(iii) the procedures and potential penalties or forfeitures in case of default;
(iv) information on privacy and personal data protection; and
(v) any other information that the Corporation determines is needed to inform the borrower of the material terms of the loan.
(4) Audit requirements
The Corporation shall establish appropriate auditing mechanisms to oversee and monitor secondary lending provided through intermediaries in partner countries and include in each annual report to Congress required under paragraph (2) a summary of the results of such audits.