[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Notices]
[Page 44741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22331]


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SMALL BUSINESS ADMINISTRATION


Adoption of FA$TRAK Pilot Loan Program; Meeting

AGENCY: Small Business Administration.

ACTION: Public meeting on Adoption FA$TRAK Pilot Loan Program for SBA 
Loans made under Section 7(a) of the Small Business Act.

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SUMMARY: On March 6, 1995, the SBA published in the Federal Register a 
notice establishing the FA$TRAK loan program as a pilot program to test 
the implications of allowing selected SBA lenders to use their own 
documentation and procedures to approve SBA guaranteed loans under 
$100,000. In return, participating lenders received a maximum SBA 
guaranty of 50 percent. On September 9, 1997, the SBA will hold a 
public meeting as part of its evaluation of whether to adopt FA$TRAK as 
a permanent SBA program and extend the program to additional qualified 
lenders.

DATES: September 9, 1997, 1:30 p.m. to 4:30 p.m.

LOCATION: Eisenhower Conference Room, U.S. Small Business 
Administration, 409 3rd Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:
Charles Thomas, Chief Pilot Operations, Office of Financial Assistance, 
(202) 205-6656.

SUPPLEMENTARY INFORMATION: FA$TRAK, which is part of the Preferred 
Lenders Program, was conceived to streamline the process by which a 
lender receives a guaranty from the SBA. The program was designed to 
utilize, to the maximum extent possible, the existing documentation and 
procedures of participating lenders. Under the program, lenders are 
permitted to use their own application forms, internal credit 
memoranda, notes, collateral documents, servicing documentation, and 
liquidation documentation. The SBA made every effort to minimize the 
use of government mandated forms under this program.
    Lenders participating in the pilot were authorized to attach an SBA 
guaranty to an approved loan without having to submit the loan to an 
SBA field office for a credit analysis or review. Loans were instead 
forwarded to a centralized SBA processing center (Sacramento) for the 
assignment of an SBA loan number and a determination of borrower 
eligibility.
    In return for this authority and autonomy, lenders agreed to limit 
the maximum loan amount to $100,000, accept a maximum guaranty of 50 
percent, and waive payment on defaulted loans until after the lender 
has completed liquidation and SBA has reviewed the underlying 
documentation supporting the loan.
    Approximately 18 banks or bank holding companies have participated 
in the pilot, although together with their affiliates they number about 
60 lenders. From its inception through July 18, 1997, 5,824 FA$TRAK 
loans for $243 million were approved. A preliminary review of the 
FA$TRAK portfolio has been completed and no significant problems or 
adverse trends have been revealed in either the pilot's operation or 
the loss rates associated with the program. In addition, onsite reviews 
of several of the leading FA$TRAK lenders did not indicate any apparent 
or systemic problems.
    In considering what action we should take regarding the FA$TRAK 
pilot, the Agency will look at a variety of issues including, but not 
limited to, the following: Should--
    (1) The program be adopted as a permanent SBA loan program? (2) the 
program be limited to SBA ``Preferred Lenders''? (3) if not, what 
criteria should be used to qualify FA$TRAK lenders? (4) participants be 
encouraged/required to adopt electronic processing of FA$TRAK loan 
applications via the Internet? (5) lines of credit loans revolve, for 
example, for a maximum of five years and then be ``termed out'' for as 
much as an additional five years? (6) the maximum loan amount under the 
program be increased? (7) interest rates for loans made under the 
program be subject to different limitations? (8) collateral be required 
for FA$TRAK loans? and, (9) other regular 7(a) policies be changed for 
FA$TRAK.

Hearing

    To ensure the widest possible public participation, the SBA will 
hold a public hearing on this proposal in Washington, DC at the Small 
Business Administration at 409 3rd Street, SW., Washington, DC 20416. 
The meeting will be held on September 9, 1997, from 1:30 p.m. to 4:30 
p.m. in the Eisenhower Conference Room.
    Interested parties will be given a reasonable time for an oral 
presentation and may submit written statements of their oral 
presentation in advance. If you wish to make a presentation, please 
contact Ms. Lula M. Gardner at (202) 205-6485 at least five days before 
the hearing. If a large number of participants desires to make 
statements, a time limitation on each presentation will be imposed.
    Members of the hearing panel may ask questions of the speaker, but 
speakers will not be allowed to question each other. Please submit 
written questions in advance to the Chair. If the Chair determines them 
to be relevant, the Chair will direct them to the appropriate panel 
member.
Jane Palsgrove Butler,
Acting Associate Administrator for Financial Assistance.
[FR Doc. 97-22331 Filed 8-21-97; 8:45 am]
BILLING CODE 8025-01-M