---
kind: "section"
citation: "12 U.S.C. § 2202d"
title: "12"
title_heading: "Banks and Banking"
number: "2202d"
heading: "Protection of borrowers who meet all loan obligations"
release: "119-102"
url: "https://uscodex.org/usc/12/2202d"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter IV — Provisions Applicable to Two or More Classes of Institutions of the System"
  - "Part C — Rights of Borrowers; Loan Restructuring"
---

# §2202d. Protection of borrowers who meet all loan obligations

- (a) **Foreclosure prohibited—** A [qualified lender](/usc/12/2202a.md?p=a-6) may not foreclose on any [loan](/usc/12/2202a.md?p=a-5-A) because of the failure of the borrower thereof to post additional collateral, if the borrower has made all accrued payments of principal, interest, and penalties with respect to the [loan](/usc/12/2202a.md?p=a-5-A).
- (b) **Prohibition against required principal reduction—** A [qualified lender](/usc/12/2202a.md?p=a-6) may not require any borrower to reduce the outstanding principal balance of any [loan](/usc/12/2202a.md?p=a-5-A) made to the borrower by any amount that exceeds the regularly scheduled principal installment payment (when due and payable), unless—
  - (1) the borrower sells or otherwise disposes of part or all of the collateral; or
  - (2) the parties agree otherwise in a written agreement entered into by the parties.
- (c) **Nonenforcement—** After a borrower has made all accrued payments of principal, interest, and penalties with respect to a [loan](/usc/12/2202a.md?p=a-5-A) made by a [qualified lender](/usc/12/2202a.md?p=a-6), the lender shall not enforce acceleration of the borrower’s repayment schedule due to the borrower having not timely made one or more principal or interest payments.
- (d) **Placing loans in nonaccrual status—**
  - (1) **Notification—** If a [qualified lender](/usc/12/2202a.md?p=a-6) places any [loan](/usc/12/2202a.md?p=a-5-A) in nonaccrual status, the lender shall document such change of status and promptly notify the borrower thereof in writing of such action and the reasons therefor.
  - (2) **Review of denial—** If the borrower was not delinquent in any principal or interest payment under the [loan](/usc/12/2202a.md?p=a-5-A) at the time of such action and the borrower’s request to have the [loan](/usc/12/2202a.md?p=a-5-A) placed back into accrual status is denied, the borrower may obtain a review of such denial before the appropriate [credit](/usc/12/5481.md?p=7) review committee under [section 2202 of this title](/usc/12/2202.md).
  - (3) **Application—** This subsection shall only apply if a [loan](/usc/12/2202a.md?p=a-5-A) being placed in nonaccrual status results in an adverse action being taken against the borrower.

## Source credit

(Pub. L. 92–181, title IV, § 4.14D, as added Pub. L. 100–233, title I, § 107, Jan. 6, 1988, 101 Stat. 1581.)