refinancing to be desirable in carrying 

 out the purpose of the Act. 



(3) Paying creditors for debts previ- 

 ously incurred, except for marshalling 

 and liquidating the indebtedness of the 

 applicant to existing lien holders in those 

 instances where the Secretary deems 

 such action to be desirable in carrying 

 out the purpose of the Act. 



(4) <i) Effecting any change in own- 

 ership of a fishing vessel (except for re- 

 placement of a vessel or purchase of the 

 interest of a deceased partner), (ii) re- 

 plenishing working capital used for such 

 purpose or (iii) liquidating a mortgage 

 given for such purpose less than two 

 years prior to the date of receipt of the 

 application. 



(5) Replacement of fishing gear or 

 vessels where the applicant or applicants 

 owned less than a 20 percent interest In 

 said fishing gear or vessel to be replaced 

 or owned less than 20 percent interest in 

 a corporation owning said fishing gear 

 or vessel: Provided. That applications 

 for a replacement loan by an eligible ap- 

 plicant cannot be considered unless and 

 until the remaining owners or share- 

 holders shall agree in writing that they 

 will not apply for a replacement loan on 

 the same fishing gear or vessel. 



(6) Repair of fishing gear or vessels 

 where such fishing gear or vessels are 

 not ofifered as collateral for the loan by 

 the applicant. 



(7) Financing new business ventures 

 involving fishing operations. 



§160.5 'Basic limitations. Applica- 

 tions for financial assistance may be con- 

 sidered only where there is evidence that 

 the credit applied for is not otherwise 

 available on reasonable terms (a) from 

 applicant's bank .of account, (b) from 

 the disposal at a fair price of assets not 

 required by the applicant in the conduct 

 of his business or not reasonably neces- 

 sary to its potential growth. <c) through 

 use of the personal credit and/or 

 resources of the owner, partners, man- 

 agment, affiliates or principal stock- 

 holders of the applicant, or (d) from 

 other known sources of credit. The 

 financial assistance applied for shall be 

 deemed to be otherwise available on 

 reasonable terms unless it is satisfac- 

 torily demonstrated that proof of refusal 

 of the desired credit has been obtained 

 from the applicant's bank ol account: 

 Provided, That if the amount of the loan 

 applied for is in excess of the legal lend- 

 ing limit of the applicant's bank or in 

 excess of the amount that the bank nor- 

 mally lends to any one borrower, then 

 proof of refusal should be obtained from 

 a correspondent bank or from any other 

 lending institution whose lending capac- 

 ity is adequate to cover the loan applied 

 for. Proof of refusal of the credit ap- 

 plied for must contain the date, amount, 

 and terms requested. Bank refusals to 

 advance credit will not be considered the 

 full test of unavailability of credit and, 

 where there Is knowledge or reason to 

 believe that credit is otherwise available 

 on reasonable terms from sources other 

 than such banks, the credit applied for 

 cannot be granted notwithstanding the 

 receipt of written refusals from such 

 banks. 



5 160 6 i4ppIicafion. Any person de- 

 siring financial assistance from the fish- 

 eries loan fund shall make application to 

 the Fish and Wildlife Service. Depart- 

 ment of the Interior, Washington 25. 

 D. C, on a loan application form furn- 

 ished by that Service except that, in 

 the discretion of the Secretary, an ap- 

 plication made other than by use of the 

 prescribed form may be considered if the 

 application contains information deemed 

 to be sufficient. Such application shall 

 indicate the purposes for which the loan 

 is to be used, the period of the loan, and 

 the security to be offered. 



§ 167.7 Processing of loan applica- 

 tions. If it is determined, on the basis 

 of a preliminary review, that the appli- 

 cation is complete and appears to be in 

 conformity with estabhshed rules and 

 procedures, a field examination shall be 

 made. Following completion of the field 

 investigation the application will be for- 

 warded with an appropriate report to the 

 Fish and Wildlife Service, Department of 

 the Interior, Washington 26, D. C. 



§ 160.8 Approval of loans. Loan 

 agreements shall be executed on a form 

 approved by the Secretary. The Secre- 

 tary will evidence his approval of the 

 loan by issuing a loan authorization 

 covering the terms and conditions for 

 making the loan. Such loan authoriza- 

 tion shall be referred to the Adminis- 

 trator who will direct the closing of the 

 loan with the applicant in the field and 

 render services involving the collection 

 of repayments and such other loan serv- 

 icing fimctions as may be required. Any 

 modification of the terms of a loan agree- 

 ment following its execution must be 

 agreed to in writing by the borrower and 

 the Secretary. 



§ 160.9 Interest. The rate of Interest 

 on all loans which may be granted is 

 fixed at five per cent per annum. 



§160.10 Maturity. The period of ma- 

 turity of any loan which may be granted 

 shall be determined and fixed according 

 to the circumstances but in no event 

 shall the date of maturity so fixed exceed 

 a period of ten years. 



§ 160.11 Security. Loans shall be ap- 

 proved only upon the f urnisliing of such 



security or other reasonable assurance of 

 repayment as the Secretary may require. 

 The proposed collateral for a loan must 

 be of such a nature that, when consid- 

 ered with the integrity and ability of the 

 management, and the applicant's past 

 and prospective earnings, repayment of 

 the loan will be reasonably assured. 



§ 160.12 Books, records, and reports. 

 The Secretary shall have the right to 

 inspect such books and records of the ap- 

 plicant as the Secretary may deem nec- 

 essary. Disbursements on a loan made 

 under this part shall be made only upon 

 the agreement of the loan appUcant to 

 maintain proper books of account and to 

 submit such periodic reports as may be 

 required by the Secretary during the 

 period of the loan. During such period, 

 the books and records of the loan appli- 

 cant shall be made available at all rea- 

 sonable times for inspection by the 

 Secretary. 



§ 160.13 Penalties on default. Unless 

 otherwise provided in the loan agree- 

 ment, failure on the part of a borrower to 

 conform to the terms of the loan agree- 

 ment will be deemed grounds upon 

 which the Secretary may cause any one 

 or all of the following steps to be taken: 



(a) Discontinue any further advances 

 of funds contemplated by the loan 

 agreement. 



(b) Take possession of any or all col- 

 lateral given as security and the property 

 purchased with borrowed funds. 



(c) Prosecute legal action against the 

 borrower. 



<d) Declare the entire amount ad- 

 vanced Immediately due and payable. 



(e) Prevent further disbursement of 

 and withdraw any funds advanced to the 

 borrower and remaining under his con- 

 trol. 



These regulations shall become effec- 

 tive thirty days after date of publication 

 in the Federai Register. 



Issued at Washington, D. C, and dated 

 August 7, 1958. 



Fred A. Seaton. 

 Secretary of the Interior. 



[P. R. Doc. B8-«488; Piled, Aug. 12, 1958; 

 8 50 a.m.] 



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