II

103D CONGRESS

2D SESSION S. 2235

To authorize the establishment of an Accredited Lenders Program for qualified State or local development companies under the Small Business

Investment Act of 1958 and an Accredited Loan Packagers Pilot Program for loan packagers under the Small Business Act.

IN THE SENATE OF THE UNITED STATES

JUNE 23 (legislative day, JUNE 7), 1994

Mr. WELLSTONE introduced the following bill; which was read twice and

referred to the Committee on Small Business

A BILL

To authorize the establishment of an Accredited Lenders

Program for qualified State or local development companies under the Small Business Investment Act of 1958

and an Accredited Loan Packagers Pilot Program for

loan packagers under the Small Business Act.

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

3 SECTION 1. ACCREDITED LENDERS PROGRAM.

4 Title V of the Small Business Investment Act of 1958

5 (15 U.S.C. 695 et seq.) is amended by inserting after sec6 tion 504 the following new section:
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1 ‘‘SEC. 504A. ACCREDITED LENDERS PROGRAM.

2 ‘‘(a) IN GENERAL.—The Administration shall estab3 lish an Accredited Lenders Program for qualified State

4 or local development companies that meet the require5 ments of subsection (b).

6 ‘‘(b) DESIGNATION OF ACCREDITED LENDERS.—The

7 Administration shall designate a qualified State or local

8 development company as an accredited lender if such com9 pany—

10 ‘‘(1) demonstrates adequate knowledge of appli11 cable laws and regulations concerning the guaran12 teed loan program under section 504;

13 ‘‘(2) demonstrates proficiency in meeting the

14 requirements of such guaranteed loan program; and

15 ‘‘(3) meets such other requirements as the Ad16 ministration may prescribe by regulation.

17 ‘‘(c) EXPEDITED PROCESSING.—The Administration

18 may expedite the processing of any loan application or

19 servicing action submitted by a qualified State or local de20 velopment company that has been designated as an ac21 credited lender in accordance with subsection (b).

22 ‘‘(d) SUSPENSION OR REVOCATION OF DESIGNA23 TION.—The designation of a qualified State or local devel24 opment company as an accredited lender shall be sus25 pended or revoked if the Administration determines that—
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1 ‘‘(1) the development company is not adhering

2 to the Administration’s rules and regulations or is

3 violating any other applicable provision of law; or

4 ‘‘(2) the loss experience of the development

5 company is excessive as compared to other lenders;

6 but such suspension or revocation shall not affect any out7 standing loan guarantee.

8 ‘‘(e) DEFINITION.—For purposes of this section, the

9 term ‘qualified State or local development company’ has

10 the same meaning as in section 503(e).

11 ‘‘(f) REGULATIONS.—The Administration shall pro12 mulgate such regulations as may be necessary to carry out

13 this section.’’.

14 SEC. 2. ACCREDITED LOAN PACKAGERS PILOT PROGRAM.

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

16 636(a)) is amended by adding at the end the following

17 new paragraph:

18 ‘‘(22) ACCREDITED LOAN PACKAGERS PILOT

19 PROGRAM.—

20 ‘‘(A) IN GENERAL.—The Administration

21 shall establish an Accredited Loan Packagers

22 Pilot Program (hereafter in this paragraph re23 ferred to as the ‘Program’) for loan packagers,

24 which shall be administered in accordance with

25 subparagraphs (B) through (G).
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1 ‘‘(B) DESIGNATION OF ACCREDITED LOAN

2 PACKAGERS.—

3 ‘‘(i) QUALIFICATIONS.—Subject to the

4 limitation contained in clause (ii), the Ad5 ministration may designate a loan pack6 ager as an accredited loan packager if such

7 loan packager—

8 ‘‘(I) is located in a rural area in

9 which, in the determination of the Ad10 ministration, there is a severe short11 age or an absence of lenders that have

12 been designated as—

13 ‘‘(aa) certified lenders under

14 the Certified Lenders Program

15 authorized by paragraph (19); or

16 ‘‘(bb) preferred lenders

17 under the Preferred Lenders

18 Program authorized by section

19 5(b)(7);

20 ‘‘(II) demonstrates adequate

21 knowledge of applicable laws and reg22 ulations concerning guaranteed loan

23 programs under this subsection;
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1 ‘‘(III) demonstrates proficiency

2 in meeting the requirements of such

3 guaranteed loan programs; and

4 ‘‘(IV) meets such other require5 ments as the Administration may pre6 scribe by regulation.

7 ‘‘(ii) TOTAL NUMBER.—In carrying

8 out the Program, the Administration shall

9 designate not less than 10 and not more

10 than 15 loan packagers as accredited loan

11 packagers.

12 ‘‘(C) EXPEDITED PROCESSING.—During

13 the 3-year period described in subparagraph

14 (G), the Administration may expedite the proc15 essing of any loan application or servicing ac16 tion prepared by a loan packager that has been

17 designated as an accredited loan packager in

18 accordance with subparagraph (B).

19 ‘‘(D) SUSPENSION OR REVOCATION OF

20 DESIGNATION.—The designation of a loan pack21 ager as an accredited loan packager shall be

22 suspended or revoked if the Administration de23 termines that—

24 ‘‘(i) the loan packager is not adhering

25 to the Administration’s rules and regula-
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1 tions or is violating any other applicable

2 provision of law; or

3 ‘‘(ii) the loss experience of the loan

4 packager is excessive as compared to other

5 loan packagers;

6 but such suspension or revocation shall not af7 fect any outstanding loan guarantee.

8 ‘‘(E) DEFINITION.—For purposes of this

9 paragraph, the term ‘loan packager’ means

10 any—

11 ‘‘(i) qualified State or local develop12 ment company, as such term is defined in

13 section 503(e) of the Small Business In14 vestment Act of 1958; or

15 ‘‘(ii) other regional or local develop16 ment organization selected by the Adminis17 tration.

18 ‘‘(F) REGULATIONS.—The Administration

19 shall promulgate such regulations as may be

20 necessary to carry out this paragraph.

21 ‘‘(G) SUNSET.—The Program shall termi22 nate 3 years after the date of enactment of this

23 paragraph.’’.

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