H. R. 4818—651
‘‘(2) with respect to small business lending companies to
set capital standards to regulate, to examine, and to enforce
laws governing such companies, in accordance with the pur-
poses of this Act; and
‘‘(3) with respect to non-Federally regulated lenders to regu-
late, to examine, and to enforce laws governing the lending
activities of such lenders under section 7(a) in accordance with
the purposes of this Act.
‘‘(b) CAPITAL DIRECTIVE.—
‘‘(1) IN GENERAL.—If the Administrator determines that
a small business lending company is being operated in an
imprudent manner, the Administrator may, in addition to any
other action authorized by law, issue a directive to such com-
pany to increase capital to such level as the Administrator
determines will result in the safe and sound operation of such
company.
‘‘(2) DELEGATION.—The Administrator may not delegate the
authority granted under paragraph (1) except to an Associate
Deputy Administrator.
‘‘(3) REGULATIONS.—The Administrator shall issue regula-
tions outlining the conditions under which the Administrator
may determine the level of capital pursuant to paragraph (1).
‘‘(c) CIVIL ACTION.—If a small business lending company vio-
lates this Act, the Administrator may institute a civil action in
an appropriate district court to terminate the rights, privileges,
and franchises of the company under this Act.
‘‘(d) REVOCATION OR SUSPENSION OF LOAN AUTHORITY.—
‘‘(1) The Administrator may revoke or suspend the
authority of a small business lending company or a non-Feder-
ally regulated lender to make, service or liquidate business
loans authorized by section 7(a) of this Act—
‘‘(A) for false statements knowingly made in any writ-
ten submission required under this Act;
‘‘(B) for omission of a material fact from any written
submission required under this Act;
‘‘(C) for willful or repeated violation of this Act;
‘‘(D) for willful or repeated violation of any condition
imposed by the Administrator with respect to any applica-
tion, request, or agreement under this Act; or
‘‘(E) for violation of any cease and desist order of the
Administrator under this section.
‘‘(2) The Administrator may revoke or suspend authority
under paragraph (1) only after a hearing under subsection
(f). The Administrator may delegate power to revoke or suspend
authority under paragraph (1) only to the Deputy Administrator
and only if the Administrator is unavailable to take such action.
‘‘(A) The Administrator, after finding extraordinary cir-
cumstances and in order to protect the financial or legal
position of the United States, may issue a suspension order
without conducting a hearing pursuant to subsection (f).
If the Administrator issues a suspension under the pre-
ceding sentence, the Administrator shall within two busi-
ness days follow the procedures set forth in subsection
(f).
‘‘(B) Any suspension under paragraph (1) shall remain
in effect until the Administrator makes a decision pursuant
to subparagraph (4) to permanently revoke the authority
H. R. 4818—652
of the small business lending company or non-Federally
regulated lender, suspend the authority for a time certain,
or terminate the suspension.
‘‘(3) The small business lending company or non-Federally
regulated lender must notify borrowers of a revocation and
that a new entity has been appointed to service their loans.
The Administrator or an employee of the Administration des-
ignated by the Administrator may provide such notice to the
borrower.
‘‘(4) Any revocation or suspension under paragraph (1) shall
be made by the Administrator except that the Administrator
shall delegate to an administrative law judge as that term
is used in section 3105 of title 5, United States Code, the
authority to conduct any hearing required under subsection
(f). The Administrator shall base the decision to revoke on
the record of the hearing.
‘‘(e) CEASE AND DESIST ORDER.—
‘‘(1) Where a small business lending company, a non-Feder-
ally regulated lender, or other person violates this Act or is
engaging or is about to engage in any acts or practices which
constitute or will constitute a violation of this Act, the Adminis-
trator may order, after the opportunity for hearing pursuant
to subsection (f), the company, lender, or other person to cease
and desist from such action or failure to act. The Administrator
may delegate the authority under the preceding sentence only
to the Deputy Administrator and only if the Administrator
is unavailable to take such action.
‘‘(2) The Administrator, after finding extraordinary cir-
cumstances and in order to protect the financial or legal position
of the United States, may issue a cease and desist order without
conducting a hearing pursuant to subsection (f). If the Adminis-
trator issues a cease and desist order under the preceding
sentence, the Administrator shall within two business days
follow the procedures set forth in subsection (f).
‘‘(3) The Administrator may further order such small busi-
ness lending company or non-Federally regulated lender or
other person to take such action or to refrain from such action
as the Administrator deems necessary to insure compliance
with this Act.
‘‘(4) A cease and desist order under this subsection may
also provide for the suspension of authority to lend in subsection
(d).
‘‘(f) PROCEDURE
FOR REVOCATION
OR SUSPENSION
OF LOAN
AUTHORITY AND FOR CEASE AND DESIST ORDER.—
‘‘(1) Before revoking or suspending authority under sub-
section (d) or issuing a cease and desist order under subsection
(e), the Administrator shall serve an order to show cause upon
the small business lending company, non-Federally regulated
lender, or other person why an order revoking or suspending
the authority or a cease and desist order should not be issued.
The order to show cause shall contain a statement of the
matters of fact and law asserted by the Administrator and
the legal authority and jurisdiction under which a hearing
is to be held, and shall set forth that a hearing will be held
before an administrative law judge at a time and place stated
in the order. Such hearing shall be conducted pursuant to
the provisions of sections 554, 556, and 557 of title 5, United