§ 1928. — Full faith and credit.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1928]
TITLE 7--AGRICULTURE
CHAPTER 50--AGRICULTURAL CREDIT
SUBCHAPTER I--REAL ESTATE LOANS
Sec. 1928. Full faith and credit
(a) In general
A contract of insurance or guarantee executed by the Secretary under
this chapter shall be an obligation supported by the full faith and
credit of the United States.
(b) Contestability
A contract of insurance or guarantee executed by the Secretary under
this chapter shall be incontestable except for fraud or
misrepresentation that the lender or any holder--
(1) has actual knowledge of at the time the contract or
guarantee is executed; or
(2) participates in or condones.
(Pub. L. 87-128, title III, Sec. 308, Aug. 8, 1961, 75 Stat. 308; Pub.
L. 87-798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89-240, Sec. 2(a), Oct.
7, 1965, 79 Stat. 932; Pub. L. 90-488, Sec. 6, Aug. 15, 1968, 82 Stat.
770; Pub. L. 92-133, Oct. 5, 1971, 85 Stat. 364; Pub. L. 101-624, title
XXIII, Sec. 2388(a), Nov. 28, 1990, 104 Stat. 4052; Pub. L. 104-127,
title VI, Sec. 605, Apr. 4, 1996, 110 Stat. 1086.)
References in Text
For definition of ``this chapter'', referred to in text, see note
set out under section 1921 of this title.
Amendments
1996--Pub. L. 104-127 amended section generally. Prior to amendment,
section read as follows: ``Loans under this subchapter may be insured by
the Secretary whenever funds are advanced or a loan is purchased by a
lender other than the United States. In connection with insurance of
loans, the Secretary--
``(1) is authorized to make agreements with respect to the
servicing of loans insured hereunder and to purchase such loans on
such terms and conditions as he may prescribe; and
``(2) may retain out of payments by the borrower a charge at a
rate specified in the insurance agreement applicable to the loan.
Any contract of insurance executed by the Secretary under this
subchapter shall be an obligation supported by the full faith and credit
of the United States and incontestable except for fraud or
misrepresentation of which the holder has actual knowledge.''
1990--Pub. L. 101-624 redesignated pars. (a) and (b) as pars. (1)
and (2), respectively, and in par. (1), substituted ``prescribe;'' for
``prescribe,;''.
1971--Pub. L. 92-133 eliminated October 1, 1971, as time limitation
for insurance of loans.
1968--Pub. L. 90-488 authorized insurance of loans until Oct. 1,
1971, without the $450,000,000 limitation on aggregate amount in any one
year.
1965--Pub. L. 89-240 substituted ``$450,000,000'' for
``$200,000,000'', ``may retain'' for ``shall retain'', and ``specified
in the insurance agreement applicable to the loan'' for ``determined by
the Secretary from time to time equivalent to not less than one-half of
1 per centum per annum on the principal unpaid balance of the loan'',
and struck out ``except that no agreement shall provide for purchase by
the Secretary at a date sooner than three years from the date of the
note'' after ``he may prescribe''.
1962--Pub. L. 87-798 increased aggregate amount of loans that may be
insured in any one year from $150,000,000 to $200,000,000.
Section Referred to in Other Sections
This section is referred to in title 25 section 488; title 42
section 1485.
