1. (a) Warehouse receipts pledged as collateral for a CCC loan will not be released except as provided in this section.
2. (b) A producer, an authorized agent or anyone subsequently designated by the producer in the manner prescribed by CCC may redeem one or more bales of cotton pledged as collateral for a loan by payment to CCC of an amount applicable to the bales of cotton being redeemed determined under this section. CCC, upon proper payment for the amount due, will release the warehouse receipts applicable to such cotton.

3. (c) A producer or agent or subsequent agent authorized in writing in a manner prescribed by CCC may repay the loan amount for one or more bales of cotton pledged as collateral for a MAL:

   1. (1) For upland cotton, at a level that is the lesser of:

      1. (i) The loan level and charges, plus interest determined for such bales; or
      2. (ii) The adjusted world price, as determined by CCC under § 1427.25, in effect on the day the repayment is received by the FSA county office, loan servicing agent, or cotton CMA that disbursed the loan.

   2. (2) For ELS cotton, at a level that is the lesser of:

      1. (i) The loan level and charges, plus interest determined for such bales; or
      2. (ii) The adjusted world price, as determined by CCC under § 1427.26, in effect on the day the repayment is received by the FSA county office, loan servicing agent, or cotton CMA that disbursed the loan.
4. (d) CCC will determine and publicly announce the adjusted world price for each crop of upland cotton and ELS cotton on a weekly basis.
5. (e) The difference between the loan level, excluding charges and interest, and the loan repayment level is the market loan gain. The total amount of any market loan gain realized by a person is subject to part 1400 of this chapter.
6. (f) Repayment of loans will not be accepted after CCC acquires title to the cotton under § 1427.7.
7. (g) In the event that Thursday is a non-workday, such loan repayments will not be accepted beginning at 7 a.m. Eastern Standard time the next workday until an announcement of the adjusted world price for the succeeding weekly period has been made under §§ 1427.25(e) and 1427.26.

8. (h) For purposes of calculating loan-period accrued storage charges that CCC may credit to the loan repayment amount under paragraph (i) of this section:

   1. (1) The warehouse storage rates for cotton crops under loan will be the lower of:
9. (i) The tariff storage rate for the warehouse for the current marketing year; or
10. (ii) The maximum storage rate set by area.
11. (2) CCC will not credit the loan repayment amount for a bale for any storage charges that accrued while the cotton was stored outside, except that storage may be credited for up to 15-days of outside storage beginning on the day the warehouse was notified that the bale is under loan if the bale was inside on the 15th day from the date of notification.

12. (3) The loan period will be determined by CCC to begin:

    1. (i) For loan disbursed by the FSA, on the date all loan documents, as determined and announced by CCC, have been received or
    2. (ii) For a loan disbursed by a CMA or an authorized loan servicing agent, on the date the loan was disbursed by CCC.
    3. (i) (1) A loan repayment rate will not exceed the loan principal plus accrued interest for the period provided in § 1427.19(j).
    4. (2) When the prevailing adjusted world price of upland cotton, as determined under § 1427.25, or ELS cotton, as determined under § 1427.26,is less than the combined value of the loan principal, accrued interest, and warehouse storage that accrued during the period of the loan, CCC will permit the loan to be repaid at the adjusted world price less the storage charges that accrued during the period of the loan.
    5. (3) In no case will the principal forgiven as part of a market gain for a bale exceed the LDP rate of the bale had it been offered for an LDP.
    6. (j) For purposes of calculating interest charges on upland and extra long staple cotton loan principal, the loan period will be the period starting the date after the disbursement of the loan amount to, and including, the loan repayment date, except that interest is not charged for a loan that is disbursed and repaid on the same date.
    7. (k) Repayment of loans will not be accepted after CCC acquires title to the cotton in accordance with § 1427.7.
    8. (l) A producer who receives a market loan gain or LDP and later is determined to have been ineligible must refund the market loan gain or LDP to CCC.

    9. (m) For upland cotton, if a lower adjusted world price is announced, as determined under § 1427.25, at any time during the 30 calendar days immediately following repayment of the marketing assistance loan, CCC shall provide a refund to the producer:

       1. (1) The refund is an amount equal to the difference between the adjusted world price in effect at the time of loan redemption and the lowest adjusted world price during the 30 calendar days following the redemption date:

          1. (i) To be issued at a frequency determined by CCC; but
          2. (ii) Not less than every 30 days.
       2. (2) For the purposes of this paragraph (m), the term producer includes the remitter or redeemer of the marketing assistance loan.
       3. (3) For members of approved CMAs and loan servicing agents, all eligibility discrepancies in § 1425.17(d) must be resolved prior to refund being issued.

[67 FR 64459, Oct. 18, 2002, as amended at 71 FR 51428, Aug. 30, 2006; 73 FR 65721, Nov. 5, 2008; 80 FR 135, 139, Jan. 2, 2015; 91 FR 42331, July 9, 2026]