Premier Certified Lenders Program Improvement Act of 2004

Bill: 108-hr-923
Sponsor: Rep. Doolittle, John T. [R-CA-4]
Introduced: 2003-02-26 in the House
Policy area: Commerce
Subjects: Auditing
Bank reserves
Community development banking
Congress
Congressional reporting requirements
Corporate finance
Economics and Public Finance
Executive reorganization
Federally-guaranteed loans
Finance and Financial Sector
Government Operations and Politics
Governmental investigations
Loan defaults
Loans
Losses
Small Business Administration
Small business

Summary:
action_date: 2003-02-26
text: Premier Certified Lenders Program Improvement Act of 2002 (sic) - Amends the Small Business Investment Act of 1958 to make loss reserve requirements of lenders under the premier certified lenders (PCL) program inapplicable to PCLs that ensure that the amount of their loss reserve is: (1) not less than $25,000; and (2) sufficient, as determined by a third-party auditor, to protect the Government from the risk of loss associated with the PCL's portfolio of loans. Designates such PCLs as qualified high loss reserve PCLs. Provides related loss reserve requirements.
action_date: 2003-06-12
text: Premier Certified Lenders Program Improvement Act of 2003 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to allow a certified development company to withdraw from its loss reserve amounts in excess of one percent of the aggregate outstanding balances of debentures to which such loss reserve relates (with an exception).
Makes loss reserve requirements of lenders under the premier certified lenders (PCL) program inapplicable to PCLs that ensure that the amount of their loss reserve is: (1) not less than $100,000; and (2) sufficient, as determined by an independent auditor, for the PCL to meet its obligations to protect the Federal Government from risk of loss. Designates such PCLs as qualified high loss reserve PCLs. Requires such PCLs to certify quarterly to the SBA Administrator as to the sufficiency of such reserves. Requires: (1) the Administrator to allow the qualified high loss reserve PCL to withdraw funds in excess of the required reserve; (2) PCL recontribution when the reserve does not meet such minimum requirements; and (3) the PCL to meet specified SBA risk management benchmarks when not qualified as a high loss reserve PCL.
Establishes in the SBA the Bureau of PCLP Oversight to carry out PCL Program functions designated by the Administrator.
Increases the reimbursement required from a PCL to the Administrator for losses sustained by the SBA as a result of PCL default on debentures issued by the PCL and guaranteed by the SBA during any period in which the PCL elects to operate under the alternative loss reserve requirements of this Act to 15 percent of the total principal and interest on such debentures. (Currently, ten percent reimbursement is required when a PCL is operating under normal loss reserve requirements.)
Directs the Administrator to contract with either a Federal agency experienced in community development lending and financial regulation or a member of the Federal Financial Institutions Examination Council to study and prepare a report regarding: (1) the extent to which statutory requirements have caused overcapitalization in the loss reserves maintained by certified PCLs participating in the PCL Program; and (2) alternatives for establishing and maintaining loss reserves sufficient to protect the Federal Government from the risk of loss associated with loans guaranteed under the Program. Requires the report to be transmitted to the congressional small business committees.
action_date: 2003-06-24
text: 

(This measure has not been amended since it was reported to the House on June 12, 2003. The summary of that version is repeated here.)

 
Premier Certified Lenders Program Improvement Act of 2003 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to allow a certified development company to withdraw from its loss reserve amounts in excess of one percent of the aggregate outstanding balances of debentures to which such loss reserve relates (with an exception).
 
Makes loss reserve requirements of lenders under the premier certified lenders (PCL) program inapplicable to PCLs that ensure that the amount of their loss reserve is: (1) not less than $100,000; and (2) sufficient, as determined by an independent auditor, for the PCL to meet its obligations to protect the Federal Government from risk of loss. Designates such PCLs as qualified high loss reserve PCLs. Requires such PCLs to certify quarterly to the SBA Administrator as to the sufficiency of such reserves. Requires: (1) the Administrator to allow the qualified high loss reserve PCL to withdraw funds in excess of the required reserve; (2) PCL recontribution when the reserve does not meet such minimum requirements; and (3) the PCL to meet specified SBA risk management benchmarks when not qualified as a high loss reserve PCL.
Establishes in the SBA the Bureau of PCLP Oversight to carry out PCL Program functions designated by the Administrator.
Increases the reimbursement required from a PCL to the Administrator for losses sustained by the SBA as a result of PCL default on debentures issued by the PCL and guaranteed by the SBA during any period in which the PCL elects to operate under the alternative loss reserve requirements of this Act to 15 percent of the total principal and interest on such debentures. (Currently, ten percent reimbursement is required when a PCL is operating under normal loss reserve requirements.)
Directs the Administrator to contract with either a Federal agency experienced in community development lending and financial regulation or a member of the Federal Financial Institutions Examination Council to study and prepare a report regarding: (1) the extent to which statutory requirements have caused overcapitalization in the loss reserves maintained by certified PCLs participating in the PCL Program; and (2) alternatives for establishing and maintaining loss reserves sufficient to protect the Federal Government from the risk of loss associated with loans guaranteed under the Program. Requires the report to be transmitted to the congressional small business committees.
action_date: 2004-05-18
text: 

(This measure has not been amended since it was reported to the House on June 12, 2003. The summary of that version is repeated here.)

 
Premier Certified Lenders Program Improvement Act of 2003 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to allow a certified development company to withdraw from its loss reserve amounts in excess of one percent of the aggregate outstanding balances of debentures to which such loss reserve relates (with an exception).
 
Makes loss reserve requirements of lenders under the premier certified lenders (PCL) program inapplicable to PCLs that ensure that the amount of their loss reserve is: (1) not less than $100,000; and (2) sufficient, as determined by an independent auditor, for the PCL to meet its obligations to protect the Federal Government from risk of loss. Designates such PCLs as qualified high loss reserve PCLs. Requires such PCLs to certify quarterly to the SBA Administrator as to the sufficiency of such reserves. Requires: (1) the Administrator to allow the qualified high loss reserve PCL to withdraw funds in excess of the required reserve; (2) PCL recontribution when the reserve does not meet such minimum requirements; and (3) the PCL to meet specified SBA risk management benchmarks when not qualified as a high loss reserve PCL.
Establishes in the SBA the Bureau of PCLP Oversight to carry out PCL Program functions designated by the Administrator.
Increases the reimbursement required from a PCL to the Administrator for losses sustained by the SBA as a result of PCL default on debentures issued by the PCL and guaranteed by the SBA during any period in which the PCL elects to operate under the alternative loss reserve requirements of this Act to 15 percent of the total principal and interest on such debentures. (Currently, ten percent reimbursement is required when a PCL is operating under normal loss reserve requirements.)
Directs the Administrator to contract with either a Federal agency experienced in community development lending and financial regulation or a member of the Federal Financial Institutions Examination Council to study and prepare a report regarding: (1) the extent to which statutory requirements have caused overcapitalization in the loss reserves maintained by certified PCLs participating in the PCL Program; and (2) alternatives for establishing and maintaining loss reserves sufficient to protect the Federal Government from the risk of loss associated with loans guaranteed under the Program. Requires the report to be transmitted to the congressional small business committees.
action_date: 2004-05-28
text: 

(This measure has not been amended since it was reported to the House on June 12, 2003. The summary of that version is repeated here.)

 
Premier Certified Lenders Program Improvement Act of 2003 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to allow a certified development company to withdraw from its loss reserve amounts in excess of one percent of the aggregate outstanding balances of debentures to which such loss reserve relates (with an exception).
 
Makes loss reserve requirements of lenders under the premier certified lenders (PCL) program inapplicable to PCLs that ensure that the amount of their loss reserve is: (1) not less than $100,000; and (2) sufficient, as determined by an independent auditor, for the PCL to meet its obligations to protect the Federal Government from risk of loss. Designates such PCLs as qualified high loss reserve PCLs. Requires such PCLs to certify quarterly to the SBA Administrator as to the sufficiency of such reserves. Requires: (1) the Administrator to allow the qualified high loss reserve PCL to withdraw funds in excess of the required reserve; (2) PCL recontribution when the reserve does not meet such minimum requirements; and (3) the PCL to meet specified SBA risk management benchmarks when not qualified as a high loss reserve PCL.
Establishes in the SBA the Bureau of PCLP Oversight to carry out PCL Program functions designated by the Administrator.
Increases the reimbursement required from a PCL to the Administrator for losses sustained by the SBA as a result of PCL default on debentures issued by the PCL and guaranteed by the SBA during any period in which the PCL elects to operate under the alternative loss reserve requirements of this Act to 15 percent of the total principal and interest on such debentures. (Currently, ten percent reimbursement is required when a PCL is operating under normal loss reserve requirements.)
Directs the Administrator to contract with either a Federal agency experienced in community development lending and financial regulation or a member of the Federal Financial Institutions Examination Council to study and prepare a report regarding: (1) the extent to which statutory requirements have caused overcapitalization in the loss reserves maintained by certified PCLs participating in the PCL Program; and (2) alternatives for establishing and maintaining loss reserves sufficient to protect the Federal Government from the risk of loss associated with loans guaranteed under the Program. Requires the report to be transmitted to the congressional small business committees.

Legislative actions:
action_date: 2004-05-28
text: Became Public Law No: 108-232.
action_date: 2004-05-28
text: Became Public Law No: 108-232.
action_date: 2004-05-28
text: Signed by President.
action_date: 2004-05-28
text: Signed by President.
action_date: 2004-05-20
text: Presented to President.
action_date: 2004-05-20
text: Presented to President.
action_date: 2004-05-19
text: Message on Senate action sent to the House.
action_date: 2004-05-18
text: Passed Senate without amendment by Unanimous Consent.
action_date: 2004-05-18
text: Passed/agreed to in Senate: Passed Senate without amendment by Unanimous Consent.
action_date: 2004-05-18
text: Senate Committee on Small Business and Entrepreneurship discharged by Unanimous Consent. (consideration: CR S5726-5727)
action_date: 2004-05-18
text: Senate Committee on Small Business and Entrepreneurship discharged by Unanimous Consent.(consideration: CR S5726-5727)
action_date: 2003-06-25
text: Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
action_date: 2003-06-24
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2003-06-24
text: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 416 - 3 (Roll no. 303). (text: CR H5724-5725)
action_date: 2003-06-24
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 416 - 3 (Roll no. 303).(text: CR H5724-5725)
action_date: 2003-06-24
text: Considered as unfinished business. (consideration: CR H5742-5743)
action_date: 2003-06-24
text: At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
action_date: 2003-06-24
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 923.
action_date: 2003-06-24
text: Considered under suspension of the rules. (consideration: CR H5724-5727)
action_date: 2003-06-24
text: Mr. Manzullo moved to suspend the rules and pass the bill, as amended.
action_date: 2003-06-12
text: Placed on the Union Calendar, Calendar No. 75.
action_date: 2003-06-12
text: Reported (Amended) by the Committee on Small Business. H. Rept. 108-153.
action_date: 2003-06-12
text: Reported (Amended) by the Committee on Small Business. H. Rept. 108-153.
action_date: 2003-05-22
text: Ordered to be Reported (Amended) by Voice Vote.
action_date: 2003-05-22
text: Committee Consideration and Mark-up Session Held.
action_date: 2003-02-26
text: Referred to the House Committee on Small Business.
action_date: 2003-02-26
text: Introduced in House
action_date: 2003-02-26
text: Introduced in House

Enacted as: number: 108-232