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.

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

20391

Vol. 60, No. 80

Wednesday, April 26, 1995

SMALL BUSINESS ADMINISTRATION

13 CFR Part 108

Loans to State and Local Development

Companies Accredited Lenders

Program for Certified Development

Companies

AGENCY: Small Business Administration

(SBA).

ACTION: Final rule.

SUMMARY: On October 22, 1994, the

President signed Public Law 103–403,

The Small Business Administration

Amendments Act of 1994. Section 212

of that act added a new section 507 of

the Small Business Investment act, 15

U.S.C. 695 et seq. That new section

authorizes the Small Business

Administration (SBA) to establish an

Accredited Lenders Program. This final

rule, published in accordance with

Public Law 103–403, implements this

new program.

EFFECTIVE DATE: This rule is effective on

April 26, 1995.

FOR FURTHER INFORMATION CONTACT:

LeAnn Oliver, Acting Director, Office of

Rural Affairs and Economic

Development Small Business

Administration, 409 3rd Street S.W.,

Suite 8300 Washington, D.C. 20416,

202–205–6485.

SUPPLEMENTARY INFORMATION: Public

Law 103–403, enacted October 22, 1994,

required SBA to establish an Accredited

Lenders Program for Certified

Development Companies, which

provides for expedited processing of

loan applications and servicing actions

by SBA field offices for qualified

development companies. The

Accredited Lender Program (ALP) is

intended to build upon the successful

Certified Lenders Program (CLP) for the

SBA’s General Business Loan program

and the pilot Accredited Lenders

Program for Certified Development

Companies which has been

administered by SBA since 1991.

During 1991, SBA established an

‘‘Accredited Lender Program’’ for

Certified Development Companies

(CDCs) on a demonstration program

basis with selected development

companies through the United States.

During the Demonstration program, SBA

Field Offices worked with the selected

development companies to expedite

processing of requests for guarantee

approval and servicing actions

submitted by them. The program was

premised upon rewarding CDCs which

have developed a good partnership with

their SBA Field Office in promoting

local economic development and have

demonstrated a good track record in the

submission of documentation needed

for making and servicing of sound loans.

The positive experience of the

demonstration program led to its

statutory authorization which makes the

Accredited Lender Program a permanent

tool for the improvement of the

program.

The concept of the ALP

demonstration program was based on a

similar program developed for lenders

participating with the SBA 7(a) General

Business Loan program (CLP) which has

also been authorized by statute. Under

that program, CLP lenders are required

to submit a complete loan package as

well as a draft loan authorization ready

for SBA review of eligibility, credit

analysis and legal sufficiency. In

consideration for the receipt of a

completed loan application package,

SBA agrees to issue an approved loan

authorization to a CLP lender within

three working days.

Similar to the CLP lender in the

General Business Loan program, under

these regulations if adopted in final

form, an ALP–CDC will be required to

submit complete loan applications and

draft loan authorizations to SBA in

order to expedite SBA’s review of

eligibility, credit analysis and legal

sufficiency and enable SBA to quickly

authorize a guaranty; and completely

documented requests for a loan

servicing action which will enable SBA

to expedite processing of such a request.

In exchange SBA will agree to provide

three business day processing for such

submissions. Notwithstanding a

requester’s ALP status, SBA will retain

the right to reject incomplete packages

or requests, thereby denying ALP

consideration to individual actions on a

case by case basis.

In order to attain ALP status a CDC

will be required to meet minimum

standards with regard to lending activity

and demonstrated proficiency in quality

of its loan packaging, closing and

servicing. An ALP–CDC and an SBA

field office will function as a team for

purposes of the ALP program. SBA’s

agreement to expedite approval of loans

and servicing actions will be premised

upon the SBA confidence in the

judgment and quality of work of the

ALP–CDC which is based upon a good

relationship and good communication

between the SBA field office and ALP–

CDC staffs.

In that regard, under these

regulations, if adopted, SBA field offices

will nominate CDCs for ALP status.

SBA’s Director of Economic

Development and Rural Affairs will be

the deciding official for admission to the

program and for suspension or

revocation of the status of a company

once admitted. Criteria for nomination

which are expressed in the proposed

regulations reflect the intent that only

successful CDCs which demonstrate a

high degree of program proficiency will

attain ALP status. ALP status will be

granted for periods of two years and will

be renewable based on request by the

CDC and favorable review by SBA.

Compliance With Executive Orders

12612, 12778, and 12866, the

Regulatory Flexibility Act and the

Paperwork Reduction Act

For purposes of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., SBA

certifies that this rule will not have a

significant economic impact on a

substantial number of small entities.

SBA certifies that this rule will not

constitute a significant regulatory action

for purposes of Executive Order 12866,

since the change is not likely to result

in an annual effect on the economy of

$100 million or more.

SBA certifies that this rule will not

impose additional reporting or

recordkeeping requirements which

would be subject to the Paperwork

Reduction Act, 44 U.S.C. Ch. 35.

SBA certifies that this rule will not

have Federalism implications

warranting the preparation of a

Federalism Assessment in accordance

with Executive Order 12612.

SBA certifies that this rule is drafted,

to the extent practicable, in accordance
20392 Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations

with the standards set forth in Section

2 of Executive Order 12778.

This rule is published as a final rule

in conformity with the statutory

deadline established in section 212 of

Public Law 103–403.

(Catalog of Federal Domestic Assistance

Program Nos. 59.036, Certified Development

Company Loans (503 Loans); 59.041,

Certified Development Company Loans (504

Loans).

List of Subjects in 13 CFR Part 108

Loan programs—business, Small

businesses.

For the reasons set forth above, SBA

is amending part 108 of title 13 of the

Code of Federal Regulations as follows:

PART 108—[AMENDED]

1. The authority citation for part 108

continues to read as follows:

Authority: 15 U.S.C. 687(c), 695, 696, 697a,

697b, 697c.

2. Section 108.2 is amended by

adding definitions of the following

terms in the appropriate alphabetical

order: ‘‘Accredited Lender’’ and ‘‘ALP’’

to read as follows:

§ 108.2 Definitions.

* * * * *

Accredited Lender means a 503

Company which has met the eligibility

requirements of § 108.508–3 and which

has executed with SBA the ALP

Agreement.

ALP means the Accredited Lenders

Program as provided for in § 108.508.

* * * * *

3. A new undesignated center heading

and §§ 108.508–1 through 108.508–5 are

added to read as follows:

Accredited Lenders Program

§ 108.508–1 Objective and characteristics

of Certified Lenders Program.

(a) Purpose. The purpose of this

subpart is to authorize for designated

503 companies, hereinafter called

Accredited Lenders, expedited approval

by SBA of loan processing, closing and

servicing functions on specified terms

and conditions.

(b) Objective of Accredited Lender

Status. SBA will process an application

for authorization of a guarantee or a loan

servicing action submitted by an

Accredited Lender within three

business days from receipt of a complete

application for authorization or a fully

documented request for a loan servicing

action, as the case may be. SBA reserves

the right to reject any such application

or request for incompleteness or other

regulatory deficiency.

§ 108.508–2 Application procedure.

In order to be designated an

Accredited Lender, a 503 company shall

apply for designation to the SBA District

or Branch Office where responsible for

the area in which its headquarters is

located by submitting a statement of its

eligibility demonstrating satisfaction of

the criteria contained in § 108.508–3.

The relevant District or Branch Office

will review all such applications using

SBA’s ‘‘rule of two procedure’’ and

forward only favorable

recommendations to the Director, Office

of Rural Affairs and Economic

Development for final determination.

The Director will advise all relevant

District or Branch Office of his or her

final decision on any such

recommendation. Favorable decisions

by the Director will be followed by

accreditations by the relevant District or

Branch Office. Unfavorable decisions by

the Director will be communicated to

the applicant by the Director.

§ 108.508–3 Eligibility.

In evaluating the application of a 503

Company to become an Accredited

Lender, SBA must make a favorable

determination based upon its

consideration of the following factors:

(a) The 503 Company must have been

an active participant in the development

company loan program for not less than

the preceding 12 months;

(b) The 503 Company must have welltrained, qualified loan officers who are

knowledgeable concerning SBA’s

lending policies and procedures for the

development company loan program;

(c) The 503 Company must have

demonstrated the ability to process,

close, and service loans under the

development company program;

(d) The 503 Company must have had

a loss rate on its portfolio of loans made

under the development company

program that is reasonable and

acceptable to the SBA;

(e) The 503 Company must have

demonstrated to SBA’s satisfaction a

history of submitting to SBA complete

and accurate debenture guaranty

application packages;

(f) The 503 Company must have

demonstrated the ability to work with

the sponsoring SBA office in a

cooperative and constructive manner;

and

(g) The 503 Company must have

demonstrated to SBA’s satisfaction the

ability to serve small business credit

needs through the development

company program.

§ 108.508–4 Term of designation.

Any designation of a 503 Company to

be an Accredited Lender shall be for a

term of two years, renewable for

additional two year terms at the

discretion of SBA upon the application

of the 503 Company.

§ 108.508–5 Suspension or revocation.

The Director may suspend or revoke

the accreditation of an Accredited

Lender for good cause by forwarding a

written statement of suspension or

revocation to the Accredited Lender.

Such statement shall specify the nature

of the sanction and the reasons

therefore. The decision to suspend or

revoke accreditation may be appealed to

the Associate Deputy Administrator for

Economic Development whose decision

on any such appeal shall be the final

decision of SBA. Examples of good

cause for purposes of these regulations

include but are not limited to:

(a) The 503 Company has not continued to

meet the criteria for eligibility under

§ 108.508–3; or

(b) The 503 Company has failed to adhere

to the SBA’s rules and regulations or is

violating any other applicable provision of

law.

Dated: March 2, 1995.

Philip Lader,

Administrator.

[FR Doc. 95–10179 Filed 4–25–95; 8:45 am]

BILLING CODE 8025–01–M

13 CFR Part 108

Loans to State and Local Development

Companies; Premier Certified Lenders

Program for Certified Development

Companies

AGENCY: Small Business Administration

(SBA).

ACTION: Interim final rule.

SUMMARY: On October 22, 1994, the

President signed Public Law 103–403,

the Small Business Administration

Reauthorization and Amendments Act

of 1994. Section 217 of that Act added

a new section 508 to the Small Business

Investment Act, 15 U.S.C. 695 et seq.

This new section authorizes the Small

Business Administration (SBA) to

establish a Premier Certified Lenders

Program. This rule, published in

accordance with Public Law 103–403, is

intended to implement this new

program.

DATES: This rule is effective on April 26,

1995; however, SBA will accept

comments submitted by May 26, 1995.

ADDRESSES: Comments should be sent to

LeAnn M. Oliver, Acting Director,

Office of Rural Affairs & Economic

Development, Small Business

Administration, 409 Third Street SW.,

suite 8300, Washington, DC 20416.