--- kind: "section" citation: "46 U.S.C. § 53721" title: "46" title_heading: "Shipping" number: "53721" heading: "Rights of obligee" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/46/53721" units: - "Subtitle V — Merchant Marine" - "Part C — Financial Assistance Programs" - "Chapter 537 — Loans and Guarantees" - "Subchapter II — Default Provisions" --- # §53721. Rights of obligee - (a) **Demands by Obligees.—** Except as provided in [subsection (c)](#c), if an [obligor](/usc/46/53701.md?p=11) has continued in default for 30 days in the payment of principal or interest on an [obligation](/usc/46/53701.md?p=9) guaranteed under this chapter, the [obligee](/usc/46/53701.md?p=10) or the [obligee](/usc/46/53701.md?p=10)’s agent may demand that the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) pay the unpaid principal amount of the [obligation](/usc/46/53701.md?p=9) and the unpaid interest on the [obligation](/usc/46/53701.md?p=9) to the date of payment. The demand must be made within the earlier of— - (1) a period that may be specified in the guarantee or a related [agreement](/usc/46/53201.md?p=8); or - (2) 90 days from the date of the default. - (b) **Payments by Secretary or Administrator.—** - (1) **In general.—** If a demand is made under [subsection (a)](#a), the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) shall pay to the [obligee](/usc/46/53701.md?p=10) or the [obligee](/usc/46/53701.md?p=10)’s agent the unpaid principal amount of the [obligation](/usc/46/53701.md?p=9) and the unpaid interest on the [obligation](/usc/46/53701.md?p=9) to the date of payment. Payment shall be made within the earlier of— - (A) a period that may be specified in the guarantee or a related [agreement](/usc/46/53201.md?p=8); or - (B) 30 days from the date of the demand. - (2) **If no existing default.—** The [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) is not required to make payment under this subsection if, within the appropriate period under [paragraph (1)](#b-1), the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) finds that the [obligor](/usc/46/53701.md?p=11) was not in default or that the default was remedied before the demand. - (c) **Assumption of Rights and Obligations Before Demand.—** An [obligee](/usc/46/53701.md?p=10) or the [obligee](/usc/46/53701.md?p=10)’s agent may not demand payment under this section if the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2), before the demand and on terms that may be provided in the [obligation](/usc/46/53701.md?p=9) or a related [agreement](/usc/46/53201.md?p=8), has assumed the [obligor](/usc/46/53701.md?p=11)’s rights and duties under the [obligation](/usc/46/53701.md?p=9) and any related [agreement](/usc/46/53201.md?p=8) and made any payment in default. However, the guarantee of the [obligation](/usc/46/53701.md?p=9) remains in effect after the [Secretary](/usc/46/53101.md?p=8)’s or [Administrator](/usc/46/53701.md?p=2)’s assumption. ## Source credit (Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1617; Pub. L. 109–163, div. C, title XXXV, § 3507(a)(1)(C), (F), Jan. 6, 2006, 119 Stat. 3555; Pub. L. 110–181, div. C, title XXXV, § 3522(a)(10)(B), (11), (b), Jan. 28, 2008, 122 Stat. 598.) ## Notes | Historical and Revision Notes | | | | --- | --- | --- | | Revised
Section | Source (U.S. Code) | Source (Statutes at Large) | | 53721(a) | 46 App.:1275(a) (1st sentence less parenthetical). | June 29, 1936, ch. 858, title XI, § 1105(a), as added June 23, 1938, ch. 600, § 46, 52 Stat. 971; Aug. 15, 1953, ch. 513, § 3, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 5, 68 Stat. 1272; Aug. 7, 1956, ch. 1026, § 1(e)–(g), 70 Stat. 1087; Pub. L. 85–520, July 15, 1958, 72 Stat. 358; Pub. L. 91–469, § 33, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 914; Pub. L. 97–31, § 12(136), Aug. 6, 1981, 95 Stat. 166; Pub. L. 98–595, § 1(8), Oct. 30, 1984, 98 Stat. 3131. | | 53721(b)(1) | 46 App.:1275(a) (last sentence less proviso). | | | 53721(b)(2) | 46 App.:1275(a) (last sentence proviso). | | | 53721(c) | 46 App.:1273(e) (last sentence). | June 29, 1936, ch. 858, title XI, § 1103(e) (last sentence), as added Pub. L. 98–595, § 1(1), Oct. 30, 1984, 98 Stat. 3130. | | | 46 App.:1275(a) (1st sentence parenthetical). | | ### Editorial Notes ### Amendments 2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(C), (F). See 2006 Amendment note below. Pub. L. 110–181, § 3522(a)(10)(B), (11), incorporated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(C), (F), into this section by inserting “or Administrator” after “Secretary” wherever appearing and “or Administrator’s” after “Secretary’s” in subsec. (c). See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construction note preceding section 101 of this title. 2006—Pub. L. 109–163, § 3507(a)(1)(C), (F), which directed the amendment of sections 1273(e) and 1275(a) of the former Appendix to this title from which this section was derived, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amendment notes and Historical and Revision notes above.