B-134617, JAN. 30, 1958

B-134617: Jan 30, 1958

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THE REFUNDING OF THE EXCESS INTEREST IS COSTLY TO THE GOVERNMENT AND THE MINOR AMOUNT INVOLVED HAS NO REAL SIGNIFICANCE TO THE BORROWER. BE AUTHORIZED BY OUR OFFICE TO ALLOW OR REQUIRE ADJUSTMENTS IN THE AMOUNT OF INTEREST ON THE INDEBTEDNESS OF BORROWERS AND OTHERS IN THE EVENT THE FINAL PAYMENT OF INTEREST IS NOT MORE THAN $2.00 GREATER OR LESS THAN THE PROPER AMOUNT. SUCH ADJUSTMENTS ARE JUSTIFIED BY REASON OF ERROR. THE PROPOSED PROCEDURE IS APPROVED.

B-134617, JAN. 30, 1958

TO HONORABLE ALBERT M. COLE, ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY:

YOUR LETTER OF DECEMBER 9, 1957, REQUESTS OUR APPROVAL OF A PROCEDURE WHEREBY MINOR AMOUNTS OF OVER OR UNDERPAYMENTS OF INTEREST MAY BE ADJUSTED FOR THE REASONS AND UNDER THE CIRCUMSTANCES SET FORTH BELOW.

YOU SAY THAT OCCASIONALLY DEBTORS, WHEN REPAYING THEIR LOANS OR ADVANCES IN FULL TO URBAN RENEWAL ADMINISTRATION, COMMUNITY FACILITIES ADMINISTRATION OR THE OFFICE OF THE ADMINISTRATOR OF YOUR AGENCY, UNDERPAY OR OVERPAY IN MINOR AMOUNTS THE INTEREST OWED BY THEM IN CONNECTION WITH SUCH REPAYMENTS. YOU POINT OUT THAT IN THE CASE OF A SMALL UNDERPAYMENT OF INTEREST, THE COST OF REBILLING THE DEBTOR FOR SUCH AMOUNT AND OF EXPLAINING THE CIRCUMSTANCES GREATLY EXCEEDS THE AMOUNT RECOVERED, AND IN THE CASE OF A SMALL OVERPAYMENT OF INTEREST BY THE DEBTOR, THE REFUNDING OF THE EXCESS INTEREST IS COSTLY TO THE GOVERNMENT AND THE MINOR AMOUNT INVOLVED HAS NO REAL SIGNIFICANCE TO THE BORROWER. IN ORDER TO MINIMIZE THE EXPENSE OF SMALL ADJUSTMENTS AND CORRESPONDENCE RELATING TO SUCH OVER OR UNDERPAYMENTS, YOU RECOMMEND THAT THE ADMINISTRATOR OF YOUR AGENCY, OR HIS DESIGNEE, BE AUTHORIZED BY OUR OFFICE TO ALLOW OR REQUIRE ADJUSTMENTS IN THE AMOUNT OF INTEREST ON THE INDEBTEDNESS OF BORROWERS AND OTHERS IN THE EVENT THE FINAL PAYMENT OF INTEREST IS NOT MORE THAN $2.00 GREATER OR LESS THAN THE PROPER AMOUNT, WHEN IN HIS OPINION, SUCH ADJUSTMENTS ARE JUSTIFIED BY REASON OF ERROR, INADVERTENCE, OR DEVIATION FROM PRESCRIBED PROCEDURE.

CONSIDERING THE COSTS OF PROCESSING SMALL OVER AND UNDERPAYMENTS, AND SINCE THE ADJUSTMENT OF INTEREST UNDER THE CIRCUMSTANCES ABOVE OUTLINED WOULD RESULT IN A MORE PRACTICAL ADMINISTRATION OF THE VARIOUS PROGRAMS, THE PROPOSED PROCEDURE IS APPROVED.