[Federal Register Volume 65, Number 6 (Monday, January 10, 2000)]
[Proposed Rules]
[Pages 1349-1350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-426]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
Liquidation of Collateral
AGENCY: Small Business Administration (SBA).
ACTION: Proposed rule.
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SUMMARY: SBA proposes to amend 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. Previously, SBA amended its
regulations to permit the sale of direct and purchased loans made under
the authorities of the 7(a) and 501, 502, 503, and 504 programs (64 FR
44109). SBA now proposes to sell its physical disaster home loans,
physical disaster business loans and economic injury disaster loans
(collectively referred to as Disaster Assistance Loans). This will
include sales of both secured and unsecured Disaster Assistance Loans
in performing and non-performing status. The Disaster Assistance 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.
DATES: Submit comments on or before February 9, 2000.
ADDRESSES: Comments should be mailed to Arnold S. Rosenthal, Assistant
Administrator for Portfolio Management, Small Business Administration,
409 Third Street, SW, Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT: Richard Blewett, 202-205-4202.
SUPPLEMENTARY INFORMATION: 13 CFR 120.540 sets forth SBA's policy for
the liquidation of collateral and the sale of commercial loans. SBA now
proposes to amend and expand this rule to include the sale of Disaster
Assistance Loans in asset sales.
Public Law 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 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.
Compliance With Executive Orders 13132, 12988, and 12866, the
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork
Reduction Act (44 U.S.C. Ch. 35).
This proposed rule is not a significant rule within the meaning of
Executive
[[Page 1350]]
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 proposed 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.
This regulation concerns the ability of SBA to sell disaster loans
as part of SBA's Asset Sales Programs. There will be no economic impact
upon the small businesses that received those loans because the loans
that will be sold are merely changing ownership, so no new funding is
involved. The purchaser of the loans will be bound by the terms of the
loan documents in the same manner as SBA. The Agency does not
anticipate that any additional costs will placed upon small entities.
Therefore, SBA believes that there will be no economic impact on small
businesses.
Nevertheless, even if it is assumed that there is an economic
impact, this rule would still only have a minimal effect on an
insubstantial number of small businesses. This is because SBA's total
disaster business loan portfolio at the end of FY 1999 was 64,832
loans, as contrasted with an estimated total of 24 million small
businesses in the United States (as estimated by SBA's Office of
Advocacy).
SBA certifies that this proposed 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 13132, SBA certifies that this
proposed rule has no federalism implications warranting preparation of
a Federalism Assessment.
For purposes of Executive Order 12988, SBA certifies that this
proposed rule is drafted, to the extent practicable, to accord with the
standards set forth in paragraph 3 of that Order.
List of Subjects in 13 CFR Part 120
Loan programs--business.
For the reasons stated in the preamble, SBA proposes to amend 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. Revise the section heading in Sec. 120.540 and amend the first
sentence of paragraph (b)(4) as follows:
Sec. 120.540 What are SBA's policies concerning the liquidation of
collateral and the sale of business loans and physical disaster
assistance loans, physical disaster business loans and economic injury
disaster loans?
* * * * *
(b) * * *
(4) Sell direct and purchased 7(a) and 501, 502, 503 and 504 loans
and physical disaster home loans, physical disaster business loans and
economic injury disaster loans in asset sales. * * *
* * * * *
Dated: December 23, 1999.
Aida Alvarez,
Administrator.
[FR Doc. 00-426 Filed 1-7-00; 8:45 am]
BILLING CODE 8025-01-P