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SBA

RIN: 3245-AE14

Publication ID: Fall 2008

Title: Lender Oversight Program
Abstract: This rule would implement the Small Business Administration's (SBA) statutory authority under the Small Business Reauthorization and Manufacturing Assistance Act of 2004 (Reauthorization Act) to regulate Small Business Lending Companies (SBLCs) and non-federally regulated lenders (NFRLs). It also would conform SBA rules to various changes in the section 7(a) Business Loan Program and the Certified Development Company (CDC) Program. In particular, this rule would: (1) Define SBLCs and NFRLs; (2) clarify SBA's authority to regulate SBLCs and NFRLs; (3) authorize SBA to set certain minimum capital standards for SBLCs, to issue cease and desist orders, and revoke or suspend lending authority of SBLCs and NFRLs; (4) establish the Bureau of Premier Certified Lender Program Oversight in the Office of Credit Risk management; (5) transfer existing SBA enforcement authority over CDCs from the Office of Financial Assistance to the appropriate official in the Office of Capital Access; and (6) define SBA's oversight and enforcement authorities relative to all SBA lenders participating in the 7(a) and CDC programs and intermediaries in the Microloan program.
Agency: Small Business Administration(SBA)	Priority: Other Significant
RIN Status: Previously published in the Unified Agenda	Agenda Stage of Rulemaking: Final Rule Stage
Major: No	Unfunded Mandates: No
CFR Citation: 13 CFR 120
Legal Authority: 15 USC 634(b)(6),(b)(7),(b)(14),(h), and note 687(f),697(e)(c)(8), and 650.

Legal Deadline: None

Statement of Need: Section 7(a) of the Small Business Act states that SBA may provide financing to small businesses "directly or in cooperation with banks or other financial institutions." Presently, SBA guarantees loans through approximately 5,000 lenders. Of these lenders, about 14 are SBLCs that are not otherwise regulated by Federal or State chartering/licensing agencies. SBA examines these SBLCs periodically. Congressional and Administration policy to delegate lending responsibilities to SBLCs and other SBA lenders requires that SBA increase its lender oversight. To that end, SBA has drafted regulations that strengthen the Agency's management of its business loan and lender oversight programs.

Summary of the Legal Basis: Small Business Act, section 5(b)(6)(7),(14),(h) and note 650. Small Business Investment Act section 308(f) and 508(c)(8).

Alternatives: This rulemaking amends and expands SBA's existing regulations on the SBLC and lender oversight programs.

Anticipated Costs and Benefits: This rulemaking is designed to strengthen SBA's regulations regarding the SBLC Program and business loan and lender oversight programs. Some additional costs associated with additional reporting by the SBLCs, NFRLs, and other SBA lenders to the SBA are anticipated.

Risks: This regulation poses no risks to the public health and safety or to the environment.

Timetable:

Action	Date	FR Cite
NPRM	10/31/2007	72 FR 61752
NPRM Comment Period Extended	12/20/2007	72 FR 72264
NPRM Comment Period End	02/29/2008
Final Action	12/00/2008

Regulatory Flexibility Analysis Required: Yes	Government Levels Affected: None
Small Entities Affected: Businesses, Organizations	Federalism: No
Included in the Regulatory Plan: Yes
Public Comment URL: www.regulations.gov
RIN Data Printed in the FR: Yes
Agency Contact: Bryan Hooper Director, Office of Credit Risk Management Small Business Administration 409 Third Street SW, Washington, DC 20416 Phone:202 205-3049 Fax:202 205-6831 Email: bryan.hooper@sba.gov