Farmers Home Administration:

Resolution of Loan Appeals

T-RCED-92-91, Aug 10, 1992

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GAO discussed its review of the Farmers Home Administration's (FmHA) appeals process, focusing on: (1) the number of successful appellants on cases appealed to and remanded by the FmHA National Appeals Staff for reconsideration; (2) the timeliness of implementation of successful, remanded appeal cases; and (3) its views on proposed legislation that would reorganize FmHA. GAO noted that: (1) FmHA applicants and existing borrowers can appeal most adverse loan decisions made by FmHA; (2) in 1988, FmHA established an unit to hear and rule on appeals of loan decisions and remand successful appeals to FmHA officials for reconsideration; (3) an estimated 49 percent of 2,900 appellants received at least part of their requested loan or loan servicing after reconsideration; (4) FmHA does not have time limits for action on remanded appeals; and (5) FmHA took longer to complete action on most appeal cases than it takes to make initial loan and servicing decisions. GAO also noted that: (1) proposed legislation would create a division within the Department of Agriculture's (USDA) Office of the Secretary to hear appeals from five USDA agencies, including FMHA, which would result in efficiency gains and independence from program agencies; and (2) other provisions of the proposed legislation may lead to unintended problems and constraints.