I
103D CONGRESS
1ST SESSION
H. R. 1788
To amend the Small Business Act to promote lending to small business
concerns in States in which there are a declining number of federally
insured financial institutions.
IN THE HOUSE OF REPRESENTATIVES
APRIL 21, 1993
Mr. MACHTLEY (for himself and Mr. NEAL of Massachusetts) introduced the
following bill; which was referred to the Committee on Small Business
A BILL
To amend the Small Business Act to promote lending to
small business concerns in States in which there are
a declining number of federally insured financial institu-
tions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Small Business Lend-
ing and Credit Availability Act of 1993’’.
SEC. 2. LOAN GUARANTEES IN QUALIFIED STATES.
(a) PARTICIPATION AUTHORITY.—Section 7(a) of the
Small Business Act (15 U.S.C. 636(a)) is amended by
adding at the end the following new paragraph:
‘‘(22) 
LOAN
GUARANTEES
IN
QUALIFIED
STATES.—
‘‘(A) IN
GENERAL.—The Administration
shall, in accordance with the requirements of
this paragraph, participate on a guaranteed
basis in loans under this subsection to small
business concerns in qualified States.
‘‘(B) GUARANTEE
AMOUNTS.—In agree-
ments to participate on a guaranteed basis in
loans described in subparagraph (A), such par-
ticipation by the Administration shall be—
‘‘(i) not less than 90 percent of the
balance of the loan outstanding at the time
of disbursement, if the loan is not less
than $200,000, nor more than $500,000;
and
‘‘(ii) not less than 95 percent of the
balance of the loan outstanding at the time
of disbursement, if the loan is less than
$200,000.
‘‘(C) TEMPORARY WAIVER OF GUARANTEE
FEES.—
‘‘(i) FIRST 2 FISCAL YEARS.—In each
of the first 2 fiscal years beginning after
the date of the enactment of this para-
graph, the Administration shall waive any
guarantee fee in connection with a loan de-
scribed in subparagraph (A).
‘‘(ii) REMAINING FISCAL YEARS.—In
the 3rd, 4th, and 5th fiscal years begin-
ning after the date of the enactment of
this paragraph, the Administration may
collect a guarantee fee in connection with
a loan described in subparagraph (A) in an
amount equal to not more than 1 percent
of the outstanding balance of the guaran-
teed amount of the loan. Any such fee
shall be payable by the participating lend-
ing institution and may be charged to the
borrower.
‘‘(D) RETENTION OF FEE PERCENTAGE BY
LENDERS.—In order to encourage lending insti-
tutions to make loans to small business con-
cerns in qualified States, the Administration
shall permit lending institutions to retain, on
loans 
described 
in 
subparagraph 
(A) 
of
$200,000 or less, 1⁄2 of any fee to be paid to
the Administration under subparagraph (C)(ii).
‘‘(E) PRESUMPTION.—For a loan de-
scribed in subparagraph (A), any reasonable
doubt as to the ability of an applicant to repay
the loan shall be resolved in favor of the appli-
cant.
‘‘(F) APPLICABILITY.—The provisions of
this paragraph shall be in effect in each of the
first 5 fiscal years beginning after the date of
the enactment of this paragraph. For such pe-
riod, provisions of this section which are incon-
sistent with this paragraph shall not apply.
‘‘(G) DEFINITIONS.—For purposes of this
paragraph, the following definitions apply:
‘‘(i) INSURED
DEPOSITORY
INSTITU-
TION.—The term ‘insured depository insti-
tution’—
‘‘(I) has the same meaning as in
section 3 of the Federal Deposit In-
surance Act; and
‘‘(II) includes an insured credit
union, as defined in section 101 of the
Federal Credit Union Act.
‘‘(ii) STATE.—The term ‘State’ means
each of the several States and the District
of Columbia.
‘‘(iii) QUALIFIED
STATE.—The term
‘qualified State’ means any State in
which—
‘‘(I) during the 12-month period
ending on the date of enactment of
this paragraph, 1 or more insured de-
pository institutions having combined
total 
assets 
of 
not 
less 
than
$100,000,000 closed due to an inabil-
ity to meet the demands of depositors;
or
‘‘(II) during the 12-month period
ending on the date of enactment of
this paragraph, 2 or more insured de-
pository institutions having combined
total 
assets 
of 
not 
less 
than
$150,000,000 closed due to an inabil-
ity to meet the demands of deposi-
tors.’’.
Æ