USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶1.10 — Conflict Of Interest

USDA HB-1-3555, Chapter 1, § 1.10 — Conflict Of Interest

Effective 2025-05-05 · USDA chapter revision · Procedure Notice 640

All Agency staff must strive to maintain the highest levels of honesty, integrity, and impartiality in conducting activities on behalf of the Agency. In order to avoid conflicts of interest, applicants and borrowers must disclose to the lender any prohibited relationship or association with any Rural Development employee and the lender must report this information to the Agency. Lenders must also disclose to the Agency any prohibited relationship or association that it or any of its employees has with any Rural Development employee. A. Prohibited Relationships Prohibited relationships and associations include: x Immediate family members, including parents and children, whether related by blood or marriage, and any household residents; x Close relatives, including grandmother, grandfather, aunt, uncle, sister, brother, niece, nephew, granddaughter, grandson, or first cousin, whether related by blood or marriage; x Immediate working relationships, including co-workers in the same office, subordinates, and immediate supervisors; and x Close business associations with an identity of financial interest, including, but not limited to, business partnerships, joint ventures, or closely-held corporations. Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. B. Disclosure Requirements Disclosure of prohibited relationships and associations under this section will not result in applicant, borrower, or lender ineligibility. Disclosures may result in special handling or reassignment of Rural Development employee responsibilities with regard to the loan guarantee request in question, to ensure no prohibited relationships or associations exist between the Rural Development employees responsible for the loan guarantee transaction, and the lender(s), borrower(s), or applicant(s). Applicants are required to disclose any known relationship or association with a Rural Development employee. When a relationship or association is identified in the application, the lender is required to notify the Agency prior to submission of the application. Attachment 1-A, Notice of Relationship/Association Between SFHGLP Applicant and Rural Development Employee, may be used to notify the Agency. After review by the Agency, the lender will be notified of any special handling procedures. When a Rural Development employee is aware of a relationship or association with an applicant, the employee is required to notify the Agency in writing. Attachment 1-A may be used to notify the Agency of the relationship or association. Special handling of the application will be provided to avoid a potential conflict of interest. The Agency official, as determined by a Director of the OPD, may use Attachment 1B, Requirements for Handling SFHGLP Application of Employee, Relative or Associate, to determine the processing and servicing procedures. A copy of the notice will be provided to the lender and Agency employee.

Source: USDA HB-1-3555, Chapter 1, § 1.10 — Conflict Of Interest · source URL · snapshot 0466acd1ea2d17a4