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Any guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a nonfederal borrower to a nonfederal lender. It does not, however, include the insurance of deposits, shares, or other withdrawable accounts in financial institutions. When a pre-1992 loan guarantee is modified it becomes subject to credit reform accounting. The guarantee liability is transferred from the liquidating account to the financing account. A one-time adjusting payment is made from the liquidating account to the financing account. Subsequent cash flows shall be recorded directly to the financing account. When a loan guarantee is in default, the defaulted loan claim of the nonfederal lender is paid from the financing account. |
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