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.
Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations 20393

FOR FURTHER INFORMATION CONTACT:

LeAnn Oliver, (202) 205–6485.

SUPPLEMENTARY INFORMATION: Public

Law 103–403, enacted October 22, 1994,

established a Premier Certified Lenders

Program (PCLP) for Certified

Development Companies (CDCs). The

law provides that, on a three-year pilot

program basis, SBA may establish the

PCLP for not more than 15 CDCs. The

PCLP is intended to emulate the

successful Preferred Lender Program for

the SBA’s General Business Loan

Program and to transfer that experience

to the development company loan

program. This recognizes the maturity of

individual local certified development

companies and the favorable track

record of the overall development

company loan program. In this way, it

will enable SBA to increase

responsiveness to small business

borrowers by taking the partnership role

it normally maintains with the certified

development companies to a higher

level with CDCs that are designated as

PCLP/CDCs.

The concept of a PCLP/CDC is based

on the PLP designation for lenders

participating with the SBA 7(a) General

Business Loan Program. In

consideration for a PCLP/CDC agreeing

to share in the risk of loan making, the

SBA will delegate authority to the

PCLP/CDC for the purpose of

authorizing, closing and servicing

development company loans. Similar to

the work of the preferred participating

lender in the General Business Loan

Program, a PCLP/CDC will be required

to obtain SBA’s final approval of the

eligibility of a debenture for guaranty,

but will not be required to obtain SBA’s

approval for underlying decisions

regarding creditworthiness of the

borrower, loan closing, or legal

requirements imposed by law or

regulation. Both PCLP and PLP loans

will be processed through the same

centralized SBA processing center.

The Premier Certified Lender Program

responds to the significant increase in

development company loan program

activity and recognizes the growing

strength and capability of CDCs. A

PCLP/CDC will be designated based on

a high level of 504 loan activity, a

history of submitting adequately

analyzed debenture guarantee

application packages to SBA, and a

favorable recommendation from the

SBA field office with which the CDC

works. Also as a condition of

designation, a PCLP/CDC will commit to

establish and maintain a loss reserve

equal to the greater of the company’s

historic loss rate on guaranteed

debentures or 1% of the outstanding

amount of debentures issued by the

company and guaranteed by SBA under

the PLCP Program.

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 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

with the standards set forth in Section

2 of Executive Order 12778.

List of Subjects in 13 CFR Part 108

Loan programs—business, Small

businesses.

For the reasons set forth above, SBA

amends 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: ‘‘Premier Certified Lender’’ and

‘‘PCLP’’ to read as follows:

§ 108.2 Definitions.

* * * * *

PCLP means the Premier Certified

Lenders Program as provided for in

§ 108–509.

Premier Certified Lender means a 503

Company which has met the eligibility

requirements of § 108.509–3 and which

has executed with SBA the PCLP

Agreement.

* * * * *

3. A new undesignated center heading

and §§ 108.509–1 through 108.509–5 are

added to read as follows:

Premier Certified Lenders Program

§ 108.509–1 Objectives and characteristics

of premier certified lenders program.

(a) Purpose. The purpose of this

subpart is to implement section 217 of

Public Law 103–403 which authorizes

SBA to delegate authority to designated

503 companies, hereinafter called

Premier Certified Lenders, to undertake

processing, approval, closing and

servicing of loans made with the

proceeds of SBA guaranteed debentures.

(b) Characteristics. SBA will solicit

and approve qualified 503 companies to

serve as Premier Certified Lenders. Each

Premier Certified Lender will be

delegated authority to approve loans

that are funded with the proceeds of

debentures issued by such company.

SBA will retain the responsibility to

guarantee any such debenture. All rules

in this part 108 relating to the

operations of participating 503

companies shall apply to Premier

Certified Lenders.

(c) Approval. The approval of a loan

by a Premier Certified Lender shall be

subject to final approval by SBA as to

eligibility of the guarantee of a

debenture, the proceeds of which will

fund the loan. Such final approval shall

not include a detailed review of

decisions by the Lender relative to the

loan involving creditworthiness, loan

closing, or compliance with legal

requirements imposed by law or

regulation, provided that SBA will

satisfy itself that its guarantee of any

debenture issued by a Premier Certified

Lender is fully supportable under

applicable laws and regulations as to the

eligibility of the guaranty of a debenture

before it approves any such guarantee.

(d) Pilot Program Period. On a pilot

program basis, SBA may designate not

more than fifteen Premier Certified

Lenders. Effective on October 1, 1997,

the pilot program ends and sections

108–509–1 thru 108–509–5 of part 108

are repealed.

§ 108.509–2 Application procedure.

Upon the request of a 503 company to

participate in the Premier Certified

Lender program, the SBA branch or

district office with which the 503

Company has had its most significant

activity shall review the 503 company’s

application and prepare its

recommendation. The District Director

or Branch Manager of that district or

branch office shall transmit all requests,

accompanied by the district or branch

office recommendation, to SBA Central

Office where the Director of the Office

of Rural Affairs and Economic

Development shall make the final

decision on all such requests. After a
20394 Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations

favorable decision, the district director

will designate the lender by executing

with the 503 Company the PCLP

Agreement. Before it can operate as a

Premier Certified Lender, the 503

company must execute such PCLP

Agreement.

§ 108.509–3 Eligibility.

In making the determination of

whether a 503 company may become a

Premier Certified Lender, SBA shall

consider, but is not limited to, the

following factors:

(a) Whether the 503 company has

been an active participant in the

Accredited Lenders Program under

§ 108.508 for not less than the preceding

12 months, and whether the 503

company has demonstrated ability to

work with the local SBA office in a

cooperative and constructive manner.

Prior to January 1, 1996, SBA may waive

the requirement for prior activity in the

Accredited Lenders Program if such

company is otherwise qualified to

participate in that program;

(b) Whether the 503 company has a

history of submitting to SBA complete,

accurate and adequately analyzed

debenture guaranty application

packages;

(c) Whether the 503 company agrees

to assume and to reimburse SBA for 10

percent of any loss sustained by the

SBA as a result of a default by the

company in the payment of principal or

interest on a debenture issued by such

company and guaranteed by SBA under

the PCLP Program; and

Whether the 503 company has a

historical loss rate acceptable to SBA.

§ 108.509–4 Loss reserve.

Each Premier Certified Lender shall

establish a loss reserve for financings

approved pursuant to the PCL Program.

(a) Amount. The amount of the loss

reserve shall be the greater of:

(1) The historic loss rate on all

debentures issued by such company; or

(2) 10 percent of the amount of the

company’s exposure on debentures

issued under the PCL Program.

(b) Assets. The loss reserve shall be

comprised of segregated assets of the

company which shall be securitized in

favor of the SBA.

(c) Contributions. For each debenture

issued by a Premier Certified Lender,

the company shall make a contribution

proportionate to the total amount of loss

reserve required in the following

amounts and at the following intervals:

(1) 50 percent when the debenture is

funded,

(2) 25 percent not later than one year after

the debenture is funded, and

(3) 25 percent not later than two years after

the debenture is funded.

§ 108.509–5 Suspension or revocation.

(a) Cause. The designation of a 503

Company as a Premier Certified Lender

may be suspended or revoked if the SBA

determines that:

(1) The 503 company has not continued to

meet the criteria for eligibility under

§ 108.509–3; or

(2) The 503 company has not established

or maintained the loss reserve required under

§ 108.509–4; or

(3) The 503 company has failed to adhere

to the SBA’s rules and regulations or has

violated any other applicable provision of

law.

(b) Review. At intervals not greater

than 12 months, SBA shall review the

financings made by each Premier

Certified Lender. The review shall

include the lender’s credit decisions

and general compliance with the

eligibility requirements for each

financing approved under the program

authorized by this section.

(c) Procedure. SBA reserves the

unilateral right to suspend or revoke the

designation of any Premier Certified

Lender as a result of any violation of

SBA regulations, any breach of any

agreement with SBA, or any change of

circumstance resulting in the Lender’s

inability to meet the operational

requirements set forth herein: Provided,

however, that such suspension or

revocation shall not invalidate any

guaranty previously entered into by

SBA. Proceedings for such purposes

will be initiated by a determination to

suspend or revoke issued by the

Director of the Office of Rural Affairs

and Economic Development. Such

determination may be appealed to the

Associate Deputy Administrator for

Economic Development whose decision

on any appeal shall be the final decision

of SBA.

Catalog of Federal Domestic Assistance

59.036 Certified Development Company

Loans (503 Loans); 59.041 Certified

Development Company Loans (504 Loans).

Dated: March 17, 1995.

Philip Lader,

Administrator.

[FR Doc. 95–10178 Filed 4–25–95; 8:45 am]

BILLING CODE 8025–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 94–NM–158–AD; Amendment

39–9205; AD 95–09–01]

Airworthiness Directives; Boeing

Model 737–300, –400, and –500 Series

Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to certain Boeing Model 737–

300, –400, and –500 series airplanes,

that requires an inspection to determine

the type of topcoat material currently on

the insulation of the inner wall of the

fan duct cowl (the firewall) of the thrust

reversers, and application of an

improved topcoat material, if necessary.

This amendment is prompted by tests,

which demonstrated that flames can

penetrate the firewall if certain

combinations of insulation and topcoat

materials are used. The actions specified

by this AD are intended to prevent

failure of the fireproof insulation top

coat installed on the firewalls of the

thrust reverser fan cowls, which could

result in degradation or loss of the

firewall and lead to an uncontained

engine fire.

DATES: Effective May 26, 1995.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of May 26,

1995.

ADDRESSES: The service information

referenced in this AD may be obtained

from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Stephen Bray, Aerospace Engineer,

Propulsion Branch, ANM–140S, Seattle

Aircraft Certification Office, FAA,

Transport Airplane Directorate, 1601

Lind Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2681;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)