One commenter objected to SBA's requirement in the interim final rule that a letter of credit comprising any portion of a Premier CDC's loss reserve must have a term ``equal to or longer than the term of the financings it secures''. In order to eliminate any possible confusion, SBA will use the term ``loan'' or ``PCLP loan'' in place of ``financing'' throughout this preamble and the final rule. The commenter noted that in certain other sections of SBA regulations the term ``financing'' or ``504 financing'' refers to the combination of the CDC loan, the Third Party Lender's loan, and the Borrower's equity injection and not just the CDC loan.
One commenter suggested that we substitute the term ``loan'' in place of ``financing'' in several places in the rule. SBA agrees with the commenters but believes that the issue should be addressed in a new procedural notice and not in SBA regulations. The commenters noted that SBA stated in an internal procedural notice that a Premier CDC was ``required'' to process 50% of its 504 loans under PCLP rather than correctly stating that the 50% level is a goal. Two commenters suggested that SBA make it clear in the regulation that it is a goal and not a requirement. The 1997 legislation established a goal of the PCLP to have each Premier CDC process 50% of its loans made under Section 504 of the Act (``504 loans'') under PCLP procedures.
These comments addressed several issues, each of which is discussed below. SBA received 4 timely comments on its interim final rule. SBA promulgated the regulation in interim final rule form to enable qualified CDCs to participate in the PCLP Program as soon as possible. 105-135, the ``Small Business Reauthorization Act of 1997'' (1997 legislation), enacted on December 2, 1997, which amends Section 504 of the Small Business Investment Act of 1958 ( 15 U.S.C. SUPPLEMENTARY INFORMATION: On (63 FR 24739), SBA published in the Federal Register an interim final rule in order to implement Pub. The final rule extends the authority of a Certified Development Company (CDC) participating in the PCLP (Premier CDC).ĭATES: This rule is effective on May 14, 1999.įOR FURTHER INFORMATION CONTACT: LeAnn M. SUMMARY: This final rule implements the Small Business Reauthorization Act of 1997, enacted on December 2, 1997, with respect to SBA financing in the pilot Premier Certified Lenders Program (PCLP). If an application is declined, SBA will notify the CDC of the reasons for the decision.From the Federal Register Online via GPO Access ĪGENCY: Small Business Administration (SBA). SBA will notify the CDC in writing of an approval or decline of a PCLP application. If the SBA approves the CDC's application, the PCLP CDC may exercise its PCLP authority in its entire Area of Operations. However, if SBA deems it appropriate, it may confer PCLP status for a period of less than two years. If approved, SBA generally will confer PCLP status for a period of two years. (5) Any other documentation required by SBA. (4) Documentation of any SBA required insurance. (3) Name, address and summary of experience of Designated Attorney. (2) Summary of the experience of each of the CDC's loan processing, closing, servicing and liquidation staff members with significant authority. (1) Certified copy of the CDC's Board of Directors' resolution authorizing the application for PCLP status. The application must include the following: (2) The CDC can adequately comply with SBA liquidation and litigation requirements. (1) The CDC must be an ALP CDC in substantial compliance with Loan Program Requirements or meet the criteria to be an ALP CDC set forth in § 120.841(a) through (h). In order for a CDC to be eligible to receive PCLP status, its application must show that it meets the following criteria: The PCLP Loan Processing Center will review these materials and forward them to the appropriate Office of Capital Access official in accordance with Delegations of Authority for final determination. The Lead SBA Office will send its written recommendation and the application to SBA's PCLP Loan Processing Center. A CDC must apply for PCLP status to the Lead SBA Office. SBA also may give PCLP CDCs increased authority to litigate 504 loans. Under the PCLP, SBA designates qualified CDCs as PCLP CDCs and delegates to them increased authority to process, close, service, and liquidate 504 loans.