This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

80581 

Vol. 85, No. 240 

Monday, December 14, 2020 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 103, 120, and 121 

RIN 3245–AG74 

Express Loan Programs; Affiliation 

Standards—Rescission 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule; rescission. 

SUMMARY: The Small Business 

Administration (SBA) is publishing this 

rule to rescind the regulations published 

on February 10, 2020, in the interim 

final rule (IFR) titled, ‘‘Express Loan 

Programs; Affiliation Standards’’ 

(Express IFR). This action is necessary 

to implement section 1102 of the 

Coronavirus Aid, Relief, and Economic 

Security Act (CARES Act), which 

permanently rescinded the interim final 

rule effective March 27, 2020. As a 

result of the rescission, SBA is removing 

the amended regulations added by the 

Express IFR and reinstating the 

regulations that were in effect before the 

rule became effective on March 11, 

2020. 

DATES: This rule is effective on March 

27, 2020, as authorized by Public Law 

116–136, sec. 1102(e). 

FOR FURTHER INFORMATION CONTACT: 

Rosemarie Drake, Chief, 7(a) Program, 

Office of Financial Assistance, Office of 

Capital Access, Small Business 

Administration, 409 Third Street SW, 

Washington, DC 20416; telephone: (202) 

619–1674; email: Rosemarie.Drake@

sba.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

The SBA programs affected by the 

rescission of the Express IFR are: 

1. The 7(a) Loan Program authorized 

pursuant to section 7(a) of the Small 

Business Act (the Act) (15 U.S.C. 

636(a)); 

2. The Business Disaster Loan 

Programs (collectively, Economic Injury 

Disaster Loans, Military Reservist 

Economic Injury Disaster Loans, and 

Physical Disaster Business Loans) 

authorized pursuant to section 7(b) of 

the Act (15 U.S.C. 636(b)); 

3. The Microloan Program authorized 

pursuant to section 7(m) of the Act (15 

U.S.C. 636(m)); 

4. The Intermediary Lending Pilot 

(ILP) Program authorized pursuant to 

section 7(l) of the Act (15 U.S.C. 636(l)); 

5. The Surety Bond Guarantee 

Program authorized pursuant to part B 

of title IV of the Small Business 

Investment Act of 1958 (15 U.S.C. 694b 

et seq.); and 

6. The Development Company 

Program (the 504 Loan Program) 

authorized pursuant to title V of the 

Small Business Investment Act of 1958 

(15 U.S.C. 695 et seq.). 

(In this final rule, the 7(a), Microloan, 

ILP, and 504 Loan Programs are 

collectively referred to as the Business 

Loan Programs.) 

On September 28, 2018, SBA 

published a proposed rule with request 

for comments in the Federal Register to 

incorporate the requirements related to 

the SBA Express and Export Express 

Loan Programs; add a regulation 

pertaining to the 7(a) and Development 

Company (504) loan programs regarding 

when the owners of a small business 

Applicant are required to inject excess 

liquid assets into the project; amend 

certain regulations setting forth the 

affiliation principles applicable to SBA 

financial assistance programs; limit 

certain fees payable by loan Applicants 

to amounts deemed reasonable by SBA; 

clarify the responsibility of a Lender for 

the contingent liabilities associated with 

7(a) loans purchased from the Federal 

Deposit Insurance Corporation; and, 

finally, amend certain regulations 

governing the use of microloan grant 

funds by Microloan Intermediaries and 

the maximum maturity of a microloan. 

(83 FR 49001) The original comment 

period was scheduled to end November 

27, 2018. On November 16, 2018, SBA 

announced an extension of the public 

comment period for an additional 15 

business days to December 18, 2018. (83 

FR 57693) 

On February 10, 2020, SBA published 

the Express IFR with a request for 

comment to provide the public with an 

additional opportunity to comment on 

the modifications to the rule. (85 FR 

7622). The interim final rule became 

effective on March 11, 2020, except that 

compliance with two of the regulatory 

provisions, 13 CFR 103.5(b) (Fees an 

Agent may charge a Borrower) and 13 

CFR 120.221(a) (Fees a Lender may 

charge a Borrower) was delayed until 

October 1, 2020. 

On March 27, 2020, President Trump 

signed into law, the Coronavirus Aid, 

Relief, and Economic Security Act 

(CARES Act) (Pub. L. 116–136, 134 Stat 

281). Section 1102(e) of that Act 

permanently rescinded the Express IFR 

effective March 27, 2020. In light of this 

rescission, SBA is issuing the 

amendments identified below to remove 

all of the regulations that were added by 

the interim final rule and restore the 

regulations that were in effect prior to 

the effective date of the Express IFR. For 

loans made between March 11, 2020, 

and March 27, 2020, SBA Lenders 

should have complied with the 

regulations in effect during that period. 

II. Waiver of Notice and Comment and 

Delayed Effective Date 

Agencies ordinarily publish a notice 

of proposed rulemaking in the Federal 

Register to provide a period for public 

comment before the rule takes effect in 

accordance with the Administrative 

Procedure Act (APA) (5 U.S.C. 553(b)). 

However, an agency can waive this 

notice and comment procedure if it 

finds, for good cause, that the notice and 

comment process is impracticable, 

unnecessary, or contrary to the public 

interest and incorporates a statement of 

its findings and reasons in the notice. 5 

U.S.C. 553(b)(B). 

This rule is rescinding an interim 

final rule that was developed using the 

APA notice and comment procedures. 

Because Congress has rescinded those 

regulations, they no longer have any 

legal effect, and their continued 

inclusion in the Code of Federal 

Regulations would not only be in 

violation of a statutory mandate, it 

would lead to public confusion as well. 

It is also unnecessary and contrary to 

the public interest to subject the 

regulations that will be reinstated to 

APA notice and comment procedures, 

since they too were already subject to 

public scrutiny when they were initially 

codified in the Code of Federal 

Regulations. Therefore, SBA finds that 

good cause exists to forgo public notice 

and comment procedures because they 


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1SBA arrived at this estimate by inquiring with 

various SBA Lenders as to the average time required 

to determine an Applicant’s access to credit 

elsewhere. SBA calculated the average of the 

timeframes provided to estimate the range of time 

the personal resources test would have saved SBA 

Lenders, on average, in their analysis. Since each 

loan is required to address an Applicant’s access to 

credit elsewhere, the number of expected 

occurrences per year was estimated by using the 

average number of 7(a) and 504 loans guaranteed in 

the most recent five fiscal years (2014–2018), 

according to SBA’s 7(a) and 504 loan data reports. 

The number of expected occurrences per year was 

multiplied by the average time saved per 

occurrence to estimate the total hourly benefit. The 

cost benefit was estimated by multiplying the hours 

saved by the mean hourly wage for a loan officer, 

as reported by the U.S. Department of Labor’s 

Bureau of Labor Statistics as of May 2018 ($36.67). 

2SBA arrived at this estimate by inquiring with 

various SBA Lenders as to the average time required 

to determine the reasonableness and permissibility 

of all fees charged to an Applicant for assistance 

with obtaining an SBA-guaranteed loan. SBA 

calculated the average of the timeframes provided 

to estimate the range of time SBA Lenders would 

have saved, on average, in determining permissible 

and reasonable fees with the bright-line tests 

included in the interim final rule, which SBA 

estimated would be the same for an Agent. The 

number of expected occurrences per year for SBA 

Lenders was estimated based on the average 

number of 7(a) and 504 loans guaranteed in the 

most recent five fiscal years (2014–2018), according 

to SBA’s 7(a) and 504 loan data reports. The total 

number of guaranteed loans was used, versus the 

number of loans identified to have charged fees as 

discussed in the preamble of the interim final rule, 

because SBA Lenders must review every loan 

application to determine whether any fees were 

charged to an Applicant and, if so, whether the fees 

are permissible and reasonable. Because Agents are 

not involved in every SBA-guaranteed loan, the 

number of expected occurrences per year for Agents 

was estimated based on averaging the total number 

of loans identified to have used an Agent (other 

than the participating Lender) in fiscal years 2013– 

2017. The number of expected occurrences per year 

for 7(a) Lenders no longer being required to itemize 

fees was based on the average number of 7(a) loans 

guaranteed over the most recent five fiscal years. 

The number of expected occurrences per year for 

each outcome was multiplied by the average time 

would be unnecessary and contrary to 

the public interest. 

In addition, section 553(d) of the APA 

generally requires a 30-day delay in the 

effective date of a final rule after the 

date of its publication in the Federal 

Register. This 30-day delay in effective 

date can also be waived as provided by 

the agency for good cause found and 

published with the rule. 5 U.S.C. 

553(d)(3). Based on the language in 

section 1102(e) of the CARES Act, the 

rescission of the Express IFR was 

effective as of March 27, 2020. Thus, the 

rule cannot be delayed for 30 days; to 

do so would be an unauthorized 

extension of the rescission date. This 

statutorily determined effective date 

provides the good cause to waive the 30- 

day delay in effective date. 

Compliance With Executive Orders 

12866, 12988, 13132, and 13771, the 

Paperwork Reduction Act (44 U.S.C. Ch. 

35), and the Regulatory Flexibility Act (5 

U.S.C. 601–612) 

Executive Order 12866 

OMB determined that the interim 

final rule, entitled Express Loan 

Programs; Affiliation Standards, was a 

significant rule for purposes of this 

Executive order. Accordingly, SBA 

prepared the requisite regulatory impact 

analysis, which was published with the 

rule. OMB has determined that this 

rescission of the interim final rule is 

also a ‘‘significant’’ rulemaking. 

Accordingly, the next section contains 

SBA’s Regulatory Impact Analysis. 

However, this is not a major rule under 

the Congressional Review Act, 5 U.S.C. 

800. 

Regulatory Impact Analysis 

The rescission of the interim final rule 

removes the regulations that were added 

by the interim final rule, including 

those pertaining to the SBA Express and 

Export Express Loan Programs, in 

compliance with section 1102(e) of the 

CARES Act, which permanently 

rescinded the interim final rule effective 

March 27, 2020. 

The primary objective of the interim 

final rule was to incorporate into the 

regulations governing the 7(a) Loan 

Program the requirements specifically 

applicable to the SBA Express and 

Export Express Loan Programs in order 

to provide additional clarity for SBA 

Express and Export Express Lenders. 

The interim final rule provided a brightline test for SBA Lenders on how to 

adequately determine whether a small 

business had access to credit elsewhere 

based on personal liquid assets. It 

modified regulatory provisions related 

to allowable fees that a Lender or an 

Agent may collect from an Applicant for 

financial assistance. The interim final 

rule also revised affiliation principles 

for the financial assistance programs. 

SBA expected that the additional 

detailed clarity on the requirements for 

program delivery in the subject areas of 

the interim final rule would have 

increased understanding for program 

users, decreased time spent evaluating 

small business Applicants, and resulted 

in a reduction of overall cost to 

participants. SBA did not expect, 

however, that the interim final rule 

would affect loan volume significantly. 

The interim final rule changes for 

affiliation determinations provided 

detailed guidance for the SBA Lender 

charged with determining the size of a 

small business Applicant, with an 

expected benefit for the SBA Lender 

from the time savings in making the 

eligibility determination. These changes 

are rescinded with this rule. 

This rescission rule transforms the 

benefits of the interim final rule into 

forgone benefits and the costs of the 

interim final rule into forgone costs. 

Forgone Benefits to SBA Lenders, 

Applicants, and Agents 

The greatest benefit from the interim 

final rule to all program participants, 

including SBA Lenders, Applicants, and 

Agents, was clear regulatory guidance 

and bright-line tests to increase 

efficiency, including bright-line tests for 

making certain determinations about 

eligibility which would have eliminated 

the ambiguity and uncertainty that had 

hindered some SBA Lenders in recent 

years. SBA estimated that the 

reinstatement of the personal resources 

test at § 120.102 would have saved SBA 

Lenders a total of approximately 67,000 

hours annually, monetized to 

$2,456,890 per year. This estimated 

annual benefit is forgone with the 

rescission of the interim final rule. 

TABLE 1—ESTIMATED ANNUAL BENEFIT TO SBA LENDERS FROM PERSONAL RESOURCES TEST IN THE INTERIM FINAL

RULE, FORGONE WITH RESCISSION

Outcomes 

Number of 

expected 

occurrences 

per year 

Average time 

saved per 

occurrence 

(hours) 

Total forgone benefit 

Increased efficiency in determining credit elsewhere ...... 67,000 1–2 67,000–134,000 hours, $2,456,890–$4,913,780. 

Estimated Forgone Annual Benefit ................................................................................... 67,000–134,000 hours, $2,456,890–$4,913,780.1

The interim final rule set clear 

limitations on fees that an Agent or 


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saved per occurrence to estimate the total hourly 

benefit. The cost benefit was estimated by 

multiplying the hours saved by the mean hourly 

wage for a loan officer, as reported by the U.S. 

Department of Labor’s Bureau of Labor Statistics as 

of May 2018 ($36.67). 

3SBA arrived at this estimate by inquiring with 

various Lenders as to the average time required to 

determine affiliation. SBA calculated the average of 

the timeframes provided to estimate the range of 

time SBA Lenders will save, on average, in 

determining affiliation based on the guidance 

provided in the interim final rule. Since an 

affiliation determination must be made for each 

application for SBA financial assistance, the 

number of expected occurrences per year for SBA 

Lenders and Sureties was estimated by using the 

average number of 7(a) and 504 loans and the 

average number of Bid and Final Bonds guaranteed 

during the most recent five fiscal years (2014–2018), 

according to SBA’s 7(a) and 504 loan data reports 

and information on surety bonds entered into SBA’s 

Capital Access Finance System. The total number 

of expected occurrences for loans and surety bonds 

per year was multiplied by the average time saved 

per occurrence to estimate the total hourly benefit. 

The cost benefit was estimated by multiplying the 

hours saved by the mean hourly wage for a loan 

officer, as reported by the U.S. Department of 

Labor’s Bureau of Labor Statistics as of May 2018 

($36.67). 

Lender could have charged an 

Applicant and left no question as to 

what fees SBA considered to be 

reasonable. Further, the interim final 

rule’s revisions to the definitions of 

Agents and Associates of Lenders and 

CDCs provided clarity for SBA’s 

determination of an Agent and what 

services the different types of Agents 

may have performed for compensation 

by the Applicant or the SBA Lender. 

This would have saved SBA Lenders 

and Agents time in making these 

determinations for each loan. In 

addition, the rule changed requirements 

for 7(a) Lenders to itemize fees and 

submit the itemization to SBA, which 

also would have saved these Lenders 

time. Applicants would have benefitted 

from protection against impermissible 

or unreasonable costs for assistance 

with obtaining an SBA-guaranteed loan. 

Benefits from these changes are forgone 

with the rescission of the interim final 

rule. 

TABLE 2—ESTIMATED ANNUAL BENEFIT TO SBA LENDERS AND AGENTS FROM FEE LIMITS IN THE INTERIM FINAL RULE, 

FORGONE WITH RESCISSION

Outcomes 

Number of 

expected 

occurrences 

per year 

Average time 

saved per 

occurrence 

(hours) 

Total benefit 

Increased efficiency for SBA Lenders when determining 

permissibility and reasonableness of fees.

67,000 0.5–1 33,500–67,000 hours, $1,228,445–$2,456,890. 

Increased efficiency for Agents when determining permissibility and reasonableness of fees.1,605 0.5–1 803–1,605 hours, $29,446–$58,855. 

Increased efficiency for 7(a) Lenders no longer required 

to itemize fees.

60,951 0.5–1 30,476–60,951 hours, $1,117,555–$2,235,073. 

Estimated Forgone Annual Benefit ................................................................................... 64,779–129,556 hours, $2,375,446–$4,750,818.2

The interim final rule modified 

principles of affiliation for the financial 

assistance programs, increasing 

efficiency for the Agency and SBA 

Lenders in providing financial 

assistance only to businesses 

determined to be small. The benefits 

from this modification are forgone with 

rescission of the interim final rule. 

TABLE 3—ESTIMATED ANNUAL BENEFIT TO SBA LENDERS AND SURETIES FROM MODIFIED PRINCIPLES OF AFFILIATION IN

THE INTERIM FINAL RULE, FORGONE WITH RESCISSION

Outcomes 

Number of 

expected 

occurrences 

per year 

Average time 

saved per 

occurrence 

(hours) 

Total forgone benefit 

Increased efficiency in determining affiliation ........... 77,000 2–4 154,000–308,000 hours, $5,647,180–$11,294,360. 

Estimated Forgone Annual Benefit ................................................................................... 154,000–308,000 hours, $5,647,180–$11,294,360.3

SBAexpected these benefits to have 

been realized upon enactment of the 

interim final rule and to have remained 

the same each year thereafter, subject to 

changes in number of loans and hourly 

rates. These benefits are forgone with 

rescission of the interim final rule. 

Like the program participants, SBA 

would have benefitted from the clear 

regulatory guidance and bright-line tests 

included in the interim final rule, 

especially when performing lender 

oversight activities. Specifically, the 

Office of Credit Risk Management 

(OCRM) would have realized increased 

efficiencies in conducting loan file 

reviews of SBA Lenders. With the 

reinstatement of the personal resources 

test, clear limitations on fees an Agent 

or Lender could have charged an 

Applicant, revised definitions of Agents 

and Associates of Lenders and CDCs, 

and revised affiliation principles, SBA 

had removed the subjectivity of a 

Lender’s assessment of these issues in 

the interim final rule, which would 

have improved SBA Lenders’ 

compliance and allowed OCRM to 

develop more efficient methods of 

testing SBA Lenders’ compliance. In 

addition, the removal of the requirement 

that a Lender itemize fees charged to an 

Applicant when the fee is over $2,500 

would have reduced the burden on 

OCRM of reviewing these additional 

documents. 


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4SBA developed this estimated annual benefit 

based on an estimate from OCRM on the range of 

time that the guidance and bright-line tests 

included in the interim final rule would have saved 

a Financial Analyst, on average, in reviewing each 

relevant element of an SBA Lender’s analysis 

during OCRM-conducted loan file reviews. The 

number of expected occurrences per year was based 

on the approximately 2,000 loan files reviewed by 

OCRM annually. The SBA Lender is required to 

address credit elsewhere and affiliation on every 

loan, but fees are not charged in connection with 

every loan. OCRM estimates that in approximately 

65 percent of the 2,000 loans reviewed annually, 

OCRM identifies an issue related to fees charged to 

Applicants by SBA Lenders and/or Agents, 

including underreporting, inaccurate reporting, or 

impermissible fees. The number of expected 

occurrences per year for each outcome was 

multiplied by the average time saved per 

occurrence to estimate the total hourly benefit. The 

cost estimate was obtained by multiplying the 

hourly rate of a GS–13, Step 1 ($36.75 per hour) by 

the number of expected occurrences per year and 

the average time saved per occurrence. 

5SBA developed the estimate for the 

administrative costs in the first year of the final rule 

based on the approximate number of active SBA 

Lenders and Agents. Although approximately 4,500 

Lenders have executed agreements to participate as 

a 7(a) Lender, over the past two fiscal years, the 

average number of active Lenders has totaled only 

1,958. (A 7(a) Lender is considered to be ‘‘active’’ 

if it has approved at least one 7(a) loan in that fiscal 

year.) SBA estimated that only those Lenders 

actively participating in the program would have 

been affected by the costs of the interim final rule 

since the estimated costs are strictly administrative. 

The number of SBA Lenders and Agents affected 

included approximately 2,474 active SBA Lenders 

(including approximately 2,061 active 7(a) Lenders, 

213 CDCs, 135 Microloan Intermediaries, 33 ILP 

Intermediaries, and 32 Sureties), plus 

approximately 1,018 Agents identified as having 

conducted business with SBA during fiscal years 

2013–2017, rounded up to the next hundred to 

account for trade associations, and other resource 

partners. SBA estimated that on average between 5– 

7 employees at each SBA Lending institution or 

Agent entity may have spent between 2–3 hours 

each reading and interpreting the rule in the first 

year and that these employees are compensated at 

the mean hourly wage for a loan officer, as reported 

by the U.S. Department of Labor’s Bureau of Labor 

Statistics ($36.67). SBA also estimated that 5–6 

employees on average may have been involved in 

developing or revising the internal policies of the 

respective program participant and would likely 

have spent between 5–7 hours updating policies 

specifically related to the interim final rule. Finally, 

SBA estimated that between 10–12 employees on 

average for each program participant would have 

spent between 5–8 hours on training related to 

updates and modifications made by the interim 

final rule. Applicants were not included as an 

TABLE 4—ESTIMATED ANNUAL BENEFIT TO SBA FROM THE INTERIM FINAL RULE, FORGONE WITH RESCISSION

Outcomes 

Number of 

expected 

occurrences 

per year 

Average time 

saved per 

occurrence 

(hours) 

Total forgone benefit 

Increased efficiency in reviewing credit elsewhere assessment.2,000 0.25–0.5 500–1,000 hours, $18,375–$36,750. 

Increased efficiency in reviewing fees charged to Applicants.1,300 0.5–1 650–1,300 hours, $23,888–$47,775. 

Increased efficiency in reviewing Lender’s affiliation determination.2,000 0.25–0.5 500–1,000 hours, $18,375–$36,750. 

Estimated Forgone Annual Benefit ................................................................................... 1,650–3,300 hours, $60,638–$121,275.4

SBA expected these benefits to be 

realized immediately upon enactment of 

the rule and to have remained the same 

each year thereafter, subject to changes 

in the number of loan files reviewed and 

hourly rates. These benefits are forgone 

with rescission of the interim final rule. 

Costs to SBA Lenders, Applicants, and 

Agents 

For purposes of the Regulatory Impact 

Analysis (RIA), the only costs to 

program participants and relevant 

stakeholders necessary to comply with 

the interim final rule were 

administrative costs. Administrative 

costs considered included estimations 

on reading and interpreting the 

regulation, developing and revising 

internal policies and procedures, and 

training. It is noted that program 

participants are presumed to incur such 

administrative costs continuously in 

order to maintain familiarity with SBA 

Loan Program Requirements, as required 

by 13 CFR 120.180, and to remain in 

good standing with SBA as defined in 

13 CFR 120.420(f). The Table below 

shows the estimated administrative 

costs attributable to the interim final 

rule, which were expected to occur 

mainly in the first year of 

implementation, decrease by half in the 

second year, and be eliminated by the 

third year. These costs are forgone with 

rescission of the interim final rule. 

TABLE 5—ESTIMATES OF ADMINISTRATIVE COMPLIANCE COSTS TO SBA LENDERS AND AGENTS IN THE INTERIM FINAL

RULE, FORGONE WITH RESCISSION

Amount 

of time 

required 

(hours) 

Value of 

time 

Frequency 

for first 

year 

Number of 

SBA lenders/ 

agents 

affected 

Total forgone cost 

Read and interpret the regulation .......... 2–3 $36.67 5–7 3,500 35,000–73,500 hours, 

$1,283,450–$2,695,245. 

Develop or Revise Internal Policies and 

Procedures.

5–7 $36.67 5–6 3,500 87,500–147,000 hours, 

$3,208,625–$5,390,490. 

Training ................................................... 5–8 $36.67 10–12 3,500 175,000–336,000 hours, 

$6,417,250–$12,321,120. 

Estimated First Year Forgone Administrative Costs ...................................................................................... 297,500–556,500 hours, 

$10,909,325–$20,406,855.5

Costs to SBA 

There were no expected additional 

costs to the Agency required to achieve 


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entity affected by the administrative costs of the 

rule, as the Applicant relies on the SBA Lender or 

third-party Agent to inform them of SBA policy and 

procedure. 

6SBA arrived at this estimate based on the total 

number of loans guaranteed between FY2013 and 

FY2017 that reported fees charged to an Applicant 

by an Agent or Lender over the limits imposed in 

the interim final rule and the total amount that 

those fees on those loans exceeded the imposed 

limit for each threshold. 

the outcomes of the interim final rule. 

The administrative costs considered for 

the loan program participants, including 

reading and interpreting the regulation, 

developing and revising internal 

policies and procedures, and training 

are already inherent requirements of 

SBA employees and therefore, the 

publication of this interim final rule had 

no additional bearing on the 

responsibilities of relevant SBA 

employees involved in the Agency’s 

loan programs. SBA determines that the 

Agency bears no costs from rescission of 

the interim final rule. 

Transfers 

SBA identified a transfer of costs, due 

to the limits on permissible fees charged 

to an Applicant by Agents and Lenders, 

as well as the prohibition against Agents 

providing services to both an Applicant 

and an SBA Lender in connection with 

the same SBA loan application. These 

changes in the interim final rule would 

have provided a cost savings to 

Applicants; however, the Agency 

acknowledged that this savings to the 

Applicant would have resulted in a cost 

(‘‘transfer’’) to the small number of 

Agents and Lenders that reported 

charging fees in excess of the limits 

imposed by the interim final rule. This 

transfer is forgone with the rescission of 

the interim final rule. 

TABLE 6—ESTIMATED TRANSFERS OF COSTS IN THE INTERIM FINAL RULE, FORGONE WITH RESCISSION

Outcomes 

Number of 

expected 

occurrences 

per year 

Average 

money 

saved per 

occurrence 

Total forgone 

transfer 

Elimination of fees exceeding set limits ................................................................................ 746 $2,380.75 $1,776,042.63 

Estimated Forgone Annual Transfer ...................................................................................................................................... 1,776,042.63 6

Below is a table showing an 

estimation of the total forgone costs and 

forgone benefits of the interim rule over 

three years. 

TABLE 7—ESTIMATED UNDISCOUNTED BENEFITS AND COSTS SCHEDULE IN THE INTERIM FINAL RULE, FORGONE WITH

RESCISSION

Forgone benefits Forgone costs 

Low estimate High estimate Low estimate High estimate 

Year 1 

267,429 hours, $9,806,754 ............. 534,856 hours, $19,613,433 ........ 297,500 hours, $10,909,325 ........ 556,500 hours, $20,406,855. 

Year 2 

267,429 hours, $9,806,754 ............. 534,856 hours, $19,613,433 ........ 148,750 hours, $5,454,662.50 ..... 278,250 hours, $10,203,427.50. 

Year 3 

267,429 hours, $9,806,754 ............. 534,856 hours, $19,613,433 ........ 0 hours, $0 ................................... 0 hours, $0. 

Below is a table showing the 

annualized values of the forgone 

estimated costs and cost savings, as of 

2016, over an infinite horizon, based on 

the interim final rule’s estimates of 

these annualized values. 

TABLE 8—ANNUALIZED VALUES AS OF 2016 OVER AN INFINITE HORIZON

Primary estimate 

3% discount rate 7% discount rate 

Low 

estimate 

High 

estimate 

Low 

estimate 

High 

estimate 

Forgone Annualized Cost Savings .................................................................. $9,806,751 $19,613,433 $9,806,754 $19,613,433 

Forgone Annualized Costs .............................................................................. 485,479 908,132 1,077,116 2,014,841 

Forgone Annualized Net Cost Savings .................................................... 9,321,272 18,705,301 8,729,638 17,598,592 


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80586 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Rules and Regulations 

Executive Order 12988 

This rule meets applicable standards 

set forth in sections 3(a) and 3(b)(2) of 

Executive Order 12988, Civil Justice 

Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. The rule has no preemptive 

effect but consistent with section 

1102(e) of the CARES Act, which made 

the rescission of the regulations 

effective on March 27, 2020, the rule 

necessarily has retroactive effect. 

Executive Order 13132 

SBA has determined that this rule 

will not have substantial, direct effects 

on the States, on the relationship 

between the National Government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. Therefore, 

for the purposes of Executive Order 

13132, SBA has determined that this 

rule has no federalism implications 

warranting preparation of a federalism 

assessment. 

Executive Order 13771 

This rescission is considered an E.O. 

13771 regulatory action. SBA 

determines that the estimated 

$12,633,634 in annualized savings from 

the interim final rule using a 7% 

discount rate in perpetuity in 2016 

dollars is forgone with this rescission. In 

addition, SBA determines that the 

estimated present value of savings in 

perpetuity from the interim final rule of 

$180,480,486 is forgone with this 

rescission. Details on the breakdown of 

the estimated cost savings of this 

interim final rule can be found in the 

rule’s economic analysis. 

Paperwork Reduction Act, 44 U.S.C. 

3501–3521 

The Express IFR required 

modification to reporting or 

recordkeeping requirements contained 

in several SBA forms: Form 1920, 

Lender’s Application for Guaranty 

(OMB Control number 3245–0348); 

Form 2450, Eligibility Information 

Required for 504 Submission (NonPCLP) (OMB Control number 3245– 

0071); Form 2234 (Part C), Eligibility 

Information Required for 504 

Submission (PCLP) (OMB Control 

number 3245–0346); and Form 159, Fee 

Disclosure and Compensation 

Agreement (OMB Control number 3245– 

0201). 

Since publication of the Express IFR, 

SBA has cancelled Form 2234 and Form 

2450. With respect to Form 1920 and 

Form 159, none of the proposed changes 

had been finalized and submitted to 

OMB for approval prior to enactment of 

the CARES Act; therefore, no action is 

required as a result of the rescission of 

the Express IFR. In addition, the Express 

IFR codified an existing requirement for 

Small Business Lending Companies 

(SBLCs) to annually submit to SBA the 

validation of any credit scoring model 

they use in connection with SBA 

Express and Export Express loans. Since 

the reporting requirement was already 

included in an approved information 

collection, SBA Lender Reporting 

Requirements (OMB Control Number 

3245–0365), no amendment was 

required. As a result, the rescission of 

the rule does not impact SBLCs’ duty to 

report. 

Regulatory Flexibility Act, 5 U.S.C. 601– 

612 

When an agency issues a rule, the 

Regulatory Flexibility Act (RFA), 5 

U.S.C. 601–612, requires the agency to 

‘‘prepare and make available for public 

comment a final regulatory analysis’’ 

which will ‘‘describe the impact of the 

proposed rule on small entities.’’ 

Section 605 of the RFA allows the head 

of an agency to certify a rule will not, 

if promulgated, have a significant 

economic impact on a substantial 

number of small entities, in lieu of 

preparing an analysis. 

Small entities likely to be affected by 

the rescission of the interim final rule 

include small SBA Lenders and small 

Agents who assist small business 

Applicants with obtaining SBAguaranteed financing. Other entities that 

provide services to an Applicant for 

obtaining SBA-guaranteed financing 

include individuals who may assist 

with packaging a loan application or 

assisting the Applicant with finding an 

SBA Lender, entities formed for the 

purpose of providing such assistance, 

attorneys, and Certified Public 

Accountants. The RIA of the interim 

final rule estimated that approximately 

3,207 small entities would be affected. 

The rescission of the interim final rule 

also affects these 3,207 small entities. 

As described more fully in the RIA, 

SBA determined that the only costs to 

program participants and relevant 

stakeholders necessary to comply with 

the interim final rule were 

administrative costs, which are forgone 

with the rescission. Administrative 

costs considered include estimations on 

reading and interpreting the regulation, 

developing and revising internal 

policies and procedures, and training. 

Although these costs were estimated for 

the purposes of the Regulatory 

Flexibility Act for the interim final rule, 

it is important to note that, regardless of 

any new rulemaking, program 

participants are presumed to incur 

administrative costs related to reading 

and interpreting SBA Loan Program 

Requirements, revising and updating 

internal policies, and training staff 

continuously in order to maintain 

familiarity with SBA Loan Program 

Requirements, as required by 13 CFR 

120.180, and to remain in good standing 

with SBA as defined in 13 CFR 

120.420(f). SBA determines that the 

rescission of the interim final rule 

causes these costs to be forgone. 

The RIA for the interim final rule 

identified an estimated transfer of costs 

due to the limits on permissible fees 

charged to an Applicant by Agents and 

Lenders, as well as the prohibition 

against an Agent providing services to 

both an Applicant and an SBA Lender 

in connection with the same SBA loan 

application. The Agency acknowledged 

that any savings to the Applicant from 

these limitations in the interim final 

rule would have resulted in a potential 

loss of revenue to the small number of 

Agents and Lenders that reported 

charging fees in excess of the limits. 

With the rescission of the interim final 

rule, these transfers are forgone. 

To estimate the average annualized 

forgone cost per small entity in the 

interim final rule, SBA annualized the 

sum of all administrative costs plus the 

estimated potential loss of revenue (e.g., 

the total transfer amount of 

$1,776,042.63) identified in the RIA (see 

Table 6 in the RIA). The estimated total 

annualized costs, which are forgone 

with the rescission, over 10 years at a 

7 percent discount rate range from a low 

estimate of $2,773,295.70 to a high 

estimate of $4,331,035. Dividing the 

total estimated annualized costs by the 

3,207 estimated small entities affected, 

the forgone annualized cost per entity 

with the rescission is estimated to be 

between approximately $864.76 and 

$1,350.49. Although SBA was unable to 

ascertain the NAICS codes of all types 

of entities considered to be Agents for 

estimation purposes in the interim final 

rule, SBA used data from the 2012 U.S. 

Census Bureau’s SUSB for NAICS code 

522310 for Mortgage and Nonmortgage 

Loan Brokers as an example to examine 

the annualized compliance cost as a 

percentage of annual receipts for small 

entities classified by this NAICS code. 

For the purposes of this estimation in 

the interim final rule, SBA averaged the 

high and low estimates of the 

annualized cost for a mid-point total of 

$388 per entity. This annualized cost 

per entity is forgone with the rescission 

of the interim final rule. 


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Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Rules and Regulations 80587 

MORTGAGE AND NONMORTGAGE LOAN BROKERS (NAICS 522310)—$7.5 MILLION SIZE STANDARD

Firm size 

(by receipts) 

Average 

annual 

receipts 

Annualized 

forgone cost 

per firm 

# of 

firms 

% of 

small 

firms 

Revenue 

test * 

(%) 

All Firms ............................................................................... 1,005,967 388 7,007 N/A 0.0 

Small Firms .......................................................................... 549,802 388 6,817 100 0.1 

<$100K ................................................................................. 48,038 388 1,533 22 0.8 

100K–499,999 ...................................................................... 250,730 388 3,233 47 0.2 

500,000–999,999 ................................................................. 693,276 388 1,042 15 0.1 

1,000,000–2,499,999 ........................................................... 1,482,997 388 721 12 0.0 

2,500,000–4,999,999 ........................................................... 3,244,231 388 216 3 0.0 

5,000,000–7,499,999 ........................................................... 5,157,764 388 72 1 0.0 

* Annualized compliance costs as a percentage of annual receipts. 

SBA has determined that forgoing the 

annualized cost per entity of the interim 

final rule by its rescission will not have 

a significant economic impact on a 

substantial number of small entities. 

The average annualized cost in the 

example above is not a significant 

percentage of each entity’s average 

annual revenue for any size firm 

considered to be small. It is also noted 

that these forgone annualized costs are 

set against forgone annualized benefits 

ranging from a low estimate of 

$9,806,754 to a high estimate of 

$19,613,433 (or approximately $3,056– 

$6,116 per entity). Also, the number of 

small entities affected is not substantial. 

SBA estimated that from FY2013 

through FY2017, 213 small entities (83 

small Lenders and 130 small Agents) 

reported charging fees in excess of the 

limits imposed in the interim final rule. 

SBA does not consider 83 small Lenders 

to be a substantial number when 

compared to the overall number of small 

Lenders, which is approximately 2,000. 

With respect to small Agents, SBA does 

not consider 130 Agents to be a 

substantial number when compared to 

the overall number of small Agents. 

SBA believes the number of small 

entities acting as Agents in connection 

with the SBA loan programs is most 

likely much larger when taking into 

consideration the attorneys, 

accountants, business consultants and 

others that act as Agents. As SBA noted 

above, the NAICS Code for Mortgage 

and Nonmortgage Loan Brokers is only 

one of numerous NAICS codes under 

which Agents may be classified. Many 

different types of individuals and 

entities, including attorneys, 

accountants, and business consultants, 

act as Agents and assist Applicants in 

obtaining SBA-guaranteed loans. Thus, 

SBA believes that the actual universe of 

small Agents may be considerably larger 

than 602. When all of the potentially 

relevant NAICS codes are considered, 

SBA believes that the number of small 

entities affected by the rescission of the 

interim final rule would be even smaller 

than the 8% noted above. 

SBA determined that the interim final 

rule did not have a significant impact on 

a substantial number of small entities. 

The Administrator of SBA likewise 

certifies that the rescission of the 

interim final rule has no significant 

impact on a substantial number of small 

entities. 

List of Subjects 

13 CFR Part 103 

Administrative practice and 

procedure. 

13 CFR Part 120 

Community development, 

Environmental protection, Equal 

employment opportunity, Exports, Loan 

programs—business, Reporting and 

recordkeeping requirements, Small 

businesses. 

13 CFR Part 121 

Loan programs—business, Reporting 

and recordkeeping requirements, Small 

businesses. 

For the reasons stated in the 

preamble, SBA is amending 13 CFR 

parts 103, 120, and 121 as follows: 

PART 103—STANDARDS FOR 

CONDUCTING BUSINESS WITH SBA 

■ 1. The authority citation for part 103 

continues to read as follows: 

Authority: 15 U.S.C. 634, 642. 

■ 2. Amend § 103.1 by: 

■ a. Revising paragraph (a); 

■ b. Redesignating paragraph (d) as 

paragraph (g); and 

■ c. Adding a new paragraph (d) and 

paragraphs (e) and (f). 

The revision and additions read as 

follows: 

§ 103.1 Key definitions. 

(a) Agent means an authorized 

representative, including an attorney, 

accountant, consultant, packager, lender 

service provider, or any other person 

representing an Applicant or Participant 

by conducting business with SBA. 

* * * * * 

(d) Lender Service Provider means an 

Agent who carries out lender functions 

in originating, disbursing, servicing, or 

liquidating a specific SBA business loan 

or loan portfolio for compensation from 

the lender. SBA determines whether or 

not one is a ‘‘Lender Service Provider’’ 

on a loan-by-loan basis. 

(e) Packager means an Agent who is 

employed and compensated by an 

Applicant or lender to prepare the 

Applicant’s application for financial 

assistance from SBA. SBA determines 

whether or not one is a ‘‘Packager’’ on 

a loan-by-loan basis. 

(f) Referral Agent means a person or 

entity who identifies and refers an 

Applicant to a lender or a lender to an 

Applicant. The Referral Agent may be 

employed and compensated by either an 

Applicant or a lender. 

* * * * * 

■ 3. Amend § 103.4 by revising 

paragraph (g) to read as follows: 

§ 103.4 What is ‘‘good cause’’ for 

suspension or revocation? 

* * * * * 

(g) Acting as both a Lender Service 

Provider or Referral Agent and a 

Packager for an Applicant on the same 

SBA business loan and receiving 

compensation for such activity from 

both the Applicant and lender. A 

limited exception to the ‘‘two master’’ 

prohibition in this paragraph (g) exists 

when an Agent acts as a Packager and 

is compensated by the Applicant for 

packaging services; also acts as a 

Referral Agent and is compensated by 

the lender for those activities; discloses 

the referral activities to the Applicant; 

and discloses the packaging activities to 

the lender. 

* * * * * 

■ 4. Amend § 103.5 by revising 

paragraph (b) and the last sentence of 

paragraph (c) to read as follows: 


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80588 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Rules and Regulations 

§ 103.5 How does SBA regulate an 

Agent’s fees and provision of service? 

* * * * * 

(b) Compensation agreements must 

provide that in cases where SBA deems 

the compensation unreasonable, the 

Agent or Packager must: Reduce the 

charge to an amount SBA deems 

reasonable, refund any sum in excess of 

the amount SBA deems reasonable to 

the Applicant, and refrain from charging 

or collecting, directly or indirectly, from 

the Applicant an amount in excess of 

the amount SBA deems reasonable. 

(c) * * * However, such 

compensation may not be directly 

charged to an Applicant or Borrower. 

PART 120—BUSINESS LOANS 

■ 5. The authority citation for part 120 

continues to read as follows: 

Authority: 15 U.S.C. 634(b) (6), (b) (7), (b) 

(14), (h), and note, 636(a), (h) and (m), and 

note, 650, 657t, and note, 657u, and note, 

687(f), 696(3) and (7), and note, and 697(a) 

and (e), and note. 

■ 6. Amend § 120.10 by revising 

paragraph (1)(i) of the defined term 

‘‘Associate’’ to read as follows: 

§ 120.10 Definitions. 

* * * * * 

Associate. (1) * * * 

(i) An officer, director, key employee, 

or holder of 20 percent or more of the 

value of the Lender’s or CDC’s stock or 

debt instruments, or an agent involved 

in the loan process; or 

* * * * * 

§ 120.102 [Removed and Reserved] 

■ 7. Remove and reserve § 120.102. 

■ 8. Amend § 120.130 by revising 

paragraph (c) to read as follows: 

§ 120.130 Restrictions on uses of 

proceeds. 

* * * * * 

(c) Floor plan financing or other 

revolving line of credit, except under 

§ 120.340 or § 120.390; 

* * * * * 

■ 9. Amend § 120.221 by: 

■ a. Revising the section heading and 

paragraph (a); and 

■ b. Removing the last sentence of 

paragraph (b). 

The revisions read as follows: 

§ 120.221 Fees and expenses that the 

Lender may collect from a loan applicant or 

Borrower. 

* * * * * 

(a) Service and packaging fees. The 

Lender may charge an applicant 

reasonable fees (customary for similar 

Lenders in the geographic area where 

the loan is being made) for packaging 

and other services. The Lender must 

advise the applicant in writing that the 

applicant is not required to obtain or 

pay for unwanted services. The 

applicant is responsible for deciding 

whether fees are reasonable. SBA may 

review these fees at any time. Lender 

must refund any such fee considered 

unreasonable by SBA. 

* * * * * 

§ 120.222 [Amended] 

■ 10. Amend § 120.222 by adding the 

word ‘‘in’’ before the words ‘‘any 

premium received’’. 

■ 11. Revise § 120.344(b) to read as 

follows: 

§ 120.344 Unique requirements of the 

EWCP. 

* * * * * 

(b) SBA does not limit the amount of 

extraordinary servicing fees, as 

referenced in § 120.221(b), under the 

EWCP. 

* * * * * 

■ 12. Revise § 120.350 to read as 

follows: 

§ 120.350 Policy. 

Section 7(a)(15) of the Act authorizes 

SBA to guarantee a loan to a qualified 

employee trust (‘‘ESOP’’) to: 

(a) Help finance the growth of its 

employer’s small business; or 

(b) Purchase ownership or voting 

control of the employer. 

■ 13. Revise § 120.352 to read as 

follows: 

§ 120.352 Use of proceeds. 

Loan proceeds may be used for two 

purposes. 

(a) Qualified employer securities. A 

qualified employee trust may relend 

loan proceeds to the employer by 

purchasing qualified employer 

securities. The small business concern 

may use these funds for any general 

purpose under section 7(a) of the Act. 

(b) Control of employer. A qualified 

employee trust may use loan proceeds 

to purchase a controlling interest (51 

percent) in the employer. Ownership 

and control must vest in the trust by the 

time the loan is repaid. 

§ 120.432 [Amended] 

■ 14. Amend § 120.432(a) by removing 

the last sentence. 

■ 15. Amend § 120.440 by revising 

paragraph (c) to read as follows: 

§ 120.440 How does a 7(a) Lender obtain 

delegated authority? 

* * * * * 

(c) If delegated authority is approved 

or renewed, Lender must execute a 

Supplemental Guarantee Agreement, 

which will specify a term not to exceed 

two years. SBA may grant shortened 

renewals based on risk or any of the 

other delegated authority criteria. 

Lenders with less than 3 years of SBA 

lending experience will be limited to a 

term of 1 year or less. 

■ 16. Remove the undesignated center 

heading ‘‘SBA Express and Export 

Express Loan Programs’’ that appears 

before § 120.441. 

§ § 120.441 through 120.447 [Removed 

and Reserved] 

■ 17. Remove and reserve §§ 120.441 

through 120.447. 

§ 120.707 [Amended] 

■ 18. Amend § 120.707(b) by removing 

the word ‘‘seven’’ and adding in its 

place the word ‘‘six.’’ 

■ 19. Amend § 120.712 by: 

■ a. Revising paragraph (b)(1); and 

■ b. In paragraph (d), removing the 

number ‘‘30’’ and adding in its place the 

number ‘‘25.’’ 

The revision reads as follows: 

§ 120.712 How does an Intermediary get a 

grant to assist Microloan borrowers? 

* * * * * 

(b) * * * 

(1) Up to 25 percent of the grant funds 

may be used to provide information and 

technical assistance to prospective 

Microloan borrowers; and 

* * * * * 

■ 20. Amend § 120.840 by revising 

paragraph (b) to read as follows: 

§ 120.840 Accredited Lenders Program 

(ALP). 

* * * * * 

(b) Application. A CDC must apply for 

ALP status to the Lead SBA Office. The 

Lead SBA Office will send its 

recommendation and the application to 

the D/FA for final decision. 

* * * * * 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

■ 21. The authority citation for part 121 

continues to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 

636(a)(36), 662, and 694a(9); Public Law 116– 

136, Section 1114. 

■ 22. Amend § 121.301 by: 

■ a. Revising paragraph (f)(4); 

■ b. Removing paragraphs (f)(5) and (6); 

■ c. Redesignating paragraphs (f)(7) 

through (9) as paragraphs (f)(5) through 

(7), respectively; and 

■ d. Revising newly redesignated 

paragraph (f)(5). 

The revisions to read as follows: 


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Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Rules and Regulations 80589 

§ 121.301 What size standards and 

affiliation principles are applicable to 

financial assistance programs? 

* * * * * 

(f) * * * 

(4) Affiliation based on identity of 

interest. Affiliation arises when there is 

an identity of interest between close 

relatives, as defined in 13 CFR 120.10, 

with identical or substantially identical 

business or economic interests (such as 

where the close relatives operate 

concerns in the same or similar industry 

in the same geographic area). Where 

SBA determines that interests should be 

aggregated, an individual or firm may 

rebut that determination with evidence 

showing that the interests deemed to be 

one are in fact separate. 

(5) Affiliation based on franchise and 

license agreements. The restraints 

imposed on a franchisee or licensee by 

its franchise or license agreement 

generally will not be considered in 

determining whether the franchisor or 

licensor is affiliated with an applicant 

franchisee or licensee provided the 

applicant franchisee or licensee has the 

right to profit from its efforts and bears 

the risk of loss commensurate with 

ownership. SBA will only consider the 

franchise or license agreements of the 

applicant concern. 

* * * * * 

■ 23. Amend § 121.302 by revising 

paragraphs (a) and (b) to read as follows: 

§ 121.302 When does SBA determine the 

size status of an applicant? 

(a) The size status of an applicant for 

SBA financial assistance is determined 

as of the date the application for 

financial assistance is accepted for 

processing by SBA, except for 

applications under the Preferred 

Lenders Program (PLP), the Disaster 

Loan program, the SBIC program, and 

the New Markets Venture Capital 

(NMCV) program. 

(b) For the Preferred Lenders Program, 

size is determined as of the date of 

approval of the loan by the Preferred 

Lender. 

* * * * * 

Jovita Carranza, 

Administrator. 

[FR Doc. 2020–26450 Filed 12–11–20; 8:45 am] 

BILLING CODE 8026–03–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2020–1031; Project 

Identifier AD–2020–00846–T; Amendment 

39–21334; AD 2020–24–04] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; correction. 

SUMMARY: The FAA is correcting an 

airworthiness directive (AD) that 

published in the Federal Register. That 

AD applies to all The Boeing Company 

Model 787–8, 787–9, and 787–10 

airplanes. As published, the regulatory 

text of the AD included errors in certain 

references to the airplane flight manual 

(AFM) that is required to be revised. 

This document corrects those errors. In 

all other respects, the original document 

remains the same. 

DATES: This correction is effective 

December 18, 2020. The effective date of 

AD 2020–24–04 remains December 18, 

2020. 

ADDRESSES: You may examine the AD 

docket at https://www.regulations.gov; 

or in person at the Docket Management 

Facility between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

final rule, any comments received, and 

other information. The address for 

Docket Operations is U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

FOR FURTHER INFORMATION CONTACT: 

Frank Carreras, Aerospace Engineer, 

Systems and Equipment Section, FAA, 

Seattle ACO Branch, 2200 South 216th 

St., Des Moines, WA 98198; phone and 

fax: 206–231–3539; email: 

frank.carreras@faa.gov. 

SUPPLEMENTARY INFORMATION: As 

published, Airworthiness Directive 

2020–24–04, Amendment 39–21334 (85 

FR 77991, December 3, 2020), requires 

revising the existing AFM to incorporate 

procedures for conducting an approach 

with a localizer-based navigation aid, 

monitoring localizer raw data, calling 

out any significant deviations, and 

performing an immediate go around if 

the airplane has not intercepted the 

final approach course as shown by the 

localizer deviation. AD 2020–24–04 

applies to all The Boeing Company 

Model 787–8, 787–9, and 787–10 

airplanes. 

As published, the regulatory text 

included errors in certain references to 

the AFM that is required to be revised. 

The location of the AFM text to be 

revised is incorrectly identified as the 

‘‘Limitations section’’; the correct 

location is the ‘‘Operating Procedures 

chapter.’’ In addition, the figure 

incorrectly identified the heading of the 

AFM text as ‘‘Operating Instructions’’; 

the correct heading is ‘‘Autopilot Flight 

Director System—Operating 

Instructions.’’ 

Correction of Publication 

This document corrects an error and 

correctly adds the AD as an amendment 

to 14 CFR 39.13. Although no other part 

of the preamble or regulatory 

information has been corrected, the 

FAA is publishing the entire rule in the 

Federal Register. 

The effective date of this AD remains 

December 18, 2020. 

Since this action only corrects errors 

in certain AFM references, it has no 

adverse economic impact and imposes 

no additional burden on any person. 

Therefore, the FAA has determined that 

notice and public comment procedures 

are unnecessary. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

Adoption of the Correction 

Accordingly, pursuant to the 

authority delegated to me by the 

Administrator, the Federal Aviation 

Administration amends part 39 of the 

Federal Aviation Regulations (14 CFR 

part 39) as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

■ 1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Corrected] 

■ 2. The FAA amends § 39.13 by adding 

the following new airworthiness 

directive (AD): 

2020–24–04 The Boeing Company: 

Amendment 39–21334; Docket No. 

FAA–2020–1031; Project Identifier AD– 

2020–00846–T. 

(a) Effective Date 

This AD is effective December 18, 2020. 

(b) Affected ADs 

None. 


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