[Federal Register Volume 64, Number 156 (Friday, August 13, 1999)]
[Rules and Regulations]
[Pages 44109-44110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21062]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
Liquidation of Collateral And Sale of Commercial Loans
AGENCY: Small Business Administration.
ACTION: Final rule.
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SUMMARY: With this rule, SBA amends its regulation regarding the
liquidation and sale of loans. As part of a government-wide initiative,
federal credit agencies are being directed by the Office of Management
and Budget (OMB) to sell their loan portfolios. Initially, SBA intends
to sell its portfolio of direct and purchased loans made under the
authorities of the 7(a) and 501, 502, 503, and 504 programs. This will
include both secured and unsecured loans in performing and non-
performing status. The loans will be sold to qualified bidders by means
of competitive procedures at publicly advertised sales. Bidder
qualifications will be set for each sale in accordance with the terms
and conditions of each sale. SBA also intends to sell its disaster home
loans and disaster business loans, but will publish separate
regulations regarding these sales.
DATES: This rule is effective August 13, 1999.
FOR FURTHER INFORMATION CONTACT: Richard Blewett, 202-205-4202.
SUPPLEMENTARY INFORMATION: SBA promulgates, without change, a rule
which it proposed on June 29, 1999 (64 FR 34745). SBA received no
comments to the proposed rule.
13 CFR 120.540 sets forth SBA's policy for the liquidation of
collateral and the sale of commercial loans. SBA amends and expands
this rule to include the sale of direct and purchased loans in asset
sales. Pub. L. 104-134, the ``Debt Collection Improvement Act of
1996,'' enacted on April 26, 1996, provides that, ``the head of an
executive * * * agency may sell, subject to section 504(b) of the
Federal Credit Reform Act of 1990 and using competitive procedures, any
non-tax debt owed to the United States that is delinquent for more than
90 days.'' 31 U.S.C. 3711(i)(1).
The Small Business Act, 15 U.S.C. 634(b)(2), provides in pertinent
part that ``(The Administrator) may sell at public or private sale * *
* in (her) discretion any evidence of debt * * * personal property, or
security * * *'' It further provides, in 15 U.S.C. 634(b)(7) that the
Administrator may ``take any and all actions * * * when [she]
determines such actions are necessary or desirable in * * * liquidating
or otherwise dealing with or realizing on loans * * *''
Pursuant to this statutory authority, SBA is establishing an Asset
Sales Program to sell portions of its direct and participation loan
portfolios. Under the new regulation, SBA may sell its direct and
participation loans in bulk through competitive procedures at publicly
advertised sales.
Compliance With Executive Orders 12612, 12988, and 12866, the
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork
Reduction Act (44 U.S.C. Ch. 35)
SBA certifies that this final rule is not a significant rule within
the meaning of Executive Order 12866, since it is not likely to have an
annual economic effect of $100 million or more, result in a major
increase in costs or prices, or have a significant adverse effect on
competition or the U.S. economy.
SBA certifies that this final rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.
SBA certifies that this final rule does not impose any additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act, 44 U.S.C., chapter 35.
For purposes of Executive Order 12612, SBA certifies that this
final rule has no federalism implications warranting preparation of a
Federalism Assessment. For purposes of Executive Order 12988, SBA
certifies that this final rule is drafted, to the extent practicable,
to accord with the standards set forth in paragraph 2 of that Order.
List of Subjects in 13 CFR Part 120
Loan programs--business.
For the reasons stated in the preamble, the Small Business
Administration amends 13 CFR part 120 as follows:
PART 120--BUSINESS LOANS
1. The authority citation for part 120 continues to read as
follows:
Authority: 15 U.S.C. 634 (b)(6) and 636(a) and (h).
2. In Sec. 120.540, revise the section heading, add paragraph
(b)(4), and revise paragraph (d) to read as follows:
[[Page 44110]]
Sec. 120.540 What are SBA's policies concerning the liquidation of
collateral and the sale of business loans?
* * * * *
(b) * * *
(4) Sell direct and purchased 7(a) and 501, 502, 503 and 504 loans
in asset sales. SBA will offer these loans for sale to qualified
bidders by means of competitive procedures at publicly advertised
sales. Bidder qualifications will be set for each sale in accordance
with the terms and conditions of each sale.
* * * * *
(d) Recoveries and security interests shared. SBA and the Lender
will share pro rata (in accordance with their respective interests in a
loan) all loan payments or recoveries, including proceeds from asset
sales, all reasonable expenses (including advances for the care,
preservation, and maintenance of collateral securing the loan and the
payment of senior lienholders), and any security interest or guarantee
(excluding SBA's guarantee) which the Lender or SBA may hold or receive
in connection with a loan.
* * * * *
Dated: August 10, 1999.
Aida Alvarez,
Administrator.
[FR Doc. 99-21062 Filed 8-12-99; 8:45 am]
BILLING CODE 8025-01-P