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T. Loans
You may accept a loan from a bank or financial institution with terms generally available to the public.[127] You may also accept a loan from an entity that is not a financial institution as long as the loan has commercially reasonable terms, including requirements for repayment and a reasonable market-based interest rate.[128] If you are offered a loan from an entity other than a financial institution on generally available terms, please contact the Committee to review the terms.
[127] Members, officers, and employees may accept loans from banks or other financial institutions on terms generally available to the public. House Rule 25, cl. 5(a)(3)(R)(v).
[128] Members, officers, and employees may also accept loans from an entity that is not a financial institution if the Member, officer, or employee is paying fair market value. House Rule 25, cl. 5(a)(3)(R)(v); House Rule 25, cl. 5(a)(3)(A).
Example (Permissible). You and your spouse are buying your first home and shopping for mortgages. One bank offers you an interest rate that is lower than all other institutions you’ve contacted. The interest rate is the one they advertise on their website for applicants with high credit scores. You and your spouse have high credit scores. You may accept that loan with the interest rate.
Example (Impermissible). Same as the example above, but you and your spouse do not have high credit scores and there are no other factors that could reasonably put you in the same category as applicants with high credit scores. You may not accept the loan with the lower interest rate.
Example (Permissible). You are buying a car from your best friend’s father. He offers to let you pay him back directly over time and will charge you the current market interest rate. You may accept the offer.Example (Permissible). You are buying a car from your best friend’s father. He offers to let you pay him back directly over time and will charge you the current market interest rate. You may accept the offer.
Example (Impermissible). Same as the example above, but your best friend’s father offers to let you pay him back directly over time without interest. You may not accept the offer as a commercially reasonable loan, but you may be able to accept the offer under a different gift exception.
Loan forbearance may also be a gift. You may accept forbearance under the Public Service Loan Forgiveness program or other federal student loan repayment programs. If you are offered other loan forbearance opportunities, please contact the Committee to review the terms.
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