I

104TH CONGRESS

1ST SESSION H. R. 1570

To amend the Small Business Act to reduce the level of participation by

the Small Business Administration in certain loans guaranteed by the

Administration, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 3, 1995

Mrs. MEYERS of Kansas introduced the following bill; which was referred to

the Committee on Small Business

A BILL

To amend the Small Business Act to reduce the level of

participation by the Small Business Administration in

certain loans guaranteed by the Administration, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Small Business Loan

5 Amendments Act of 1995’’.
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1 SEC. 2. REDUCED LEVEL OF PARTICIPATION IN GUARAN2 TEED LOANS.

3 Section 7(a)(2) of the Small Business Act (15 U.S.C.

4 636(a)(2)) is amended to read as follows:

5 ‘‘(2) LEVEL OF PARTICIPATION IN GUARAN6 TEED LOANS.—

7 ‘‘(A) IN GENERAL.—In agreements to par8 ticipate in loans on a deferred basis under this

9 subsection, such participation by the Adminis10 tration shall be equal to—

11 ‘‘(i) with respect to loans made under

12 the Preferred Lenders Program, 70 per13 cent of the balance of the financing out14 standing at the time of disbursement; and

15 ‘‘(ii) with respect to all other loans,

16 75 percent of the balance of the financing

17 outstanding at the time of disbursement.

18 ‘‘(B) REDUCED PARTICIPATION.—The

19 guarantee percentage specified by subparagraph

20 (A) for any loan may be reduced upon the re21 quest of the participating lender. The Adminis22 tration shall not use the percent of guarantee

23 requested as a criterion for establishing prior24 ities in approving guarantee requests.

25 ‘‘(C) INTEREST RATE UNDER PREFERRED

26 LENDERS PROGRAM.—The maximum interest
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1 rate for a loan guaranteed under the Preferred

2 Lenders Program shall not exceed the maxi3 mum interest rate, as determined by the Ad4 ministration, which is made applicable to other

5 loan guarantees under this subsection.

6 ‘‘(D) PREFERRED LENDERS PROGRAM DE7 FINED.—In this paragraph, the term ‘Preferred

8 Lenders Program’ means a program under

9 which a written agreement between the lender

10 and the Administration delegates to the lend11 er—

12 ‘‘(i) complete authority to make and

13 close loans with a guarantee from the Ad14 ministration without obtaining the prior

15 specific approval of the Administration;

16 and

17 ‘‘(ii) authority to service and liquidate

18 such loans.’’.

19 SEC. 3. GUARANTEE FEES.

20 (a) AMOUNT OF FEES.—Section 7(a)(18) of the

21 Small Business Act (15 U.S.C. 636(a)(18)) is amended

22 by striking ‘‘the amount of the deferred participation

23 share’’ and inserting ‘‘the gross amount’’.
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1 (b) REPEAL OF PROVISIONS ALLOWING RETENTION

2 OF FEES BY LENDERS.—Section 7(a)(19) of such Act (15

3 U.S.C. 636(a)(19)) is amended—

4 (1) in subparagraph (B)—

5 (A) by striking ‘‘shall (i) develop’’ and in6 serting ‘‘shall develop’’; and

7 (B) by striking ‘‘, and (ii)’’ and all that

8 follows through the end of the subparagraph

9 and inserting a period; and

10 (2) by striking subparagraph (C).

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