13 CFR 120.1425 - Grounds for enforcement actions - Intermediaries participating in the Microloan Program and NTAPs.

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§ 120.1425 Grounds for enforcement actions - Intermediaries participating in the MicroloanProgram and NTAPs.

(a)Agreement. By participating in the SBAMicroloan or NTAP program, Intermediaries and NTAPs automatically agree to the terms, conditions, and remedies in this Part 120 as if fully set forth in their participation agreement and all other agreements jointly executed by the Intermediary or NTAP and SBA.

(b)Scope.SBA may undertake one or more of the enforcement actions listed in § 120.1540, or as otherwise authorized by law, if SBA determines that any of the grounds listed in paragraphs (c) through (e) of this section exist.

(c)Grounds in general - For any Intermediary or NTAP, grounds that may trigger enforcement action against the Intermediary or NTAP (regardless of its Risk Rating) include:

(1) Violation of any laws, regulations, or policies of the program; or

(2) Failure to meet any one of the following performance standards:

(i) Coverage of the service territory assigned by SBA, including honoring SBA's determined boundaries of neighboring intermediaries and NTAPs;

(ii) Fulfill reporting requirements;

(iii) Manage program funds and matching funds in a satisfactory and financially sound manner;

(iv) Communicate and file reports within six months after beginning participation in program;

(v) Maintain a currency rate of 85% or more for the Intermediary's SBAMicroloan portfolio (that is, loans that are no more than 30 days late in scheduled payments);

(vi) Maintain a default rate in the Intermediary's Microloan portfolio of 15% or less of the cumulative dollars loaned under the program;

(vii) Maintain a staff trained in Microloanprogram issues and requirements; or

(viii) Any other reason that SBA determines may increase SBA's financial or program risk (for example, repeated Less Than Acceptable Risk Ratings (generally in conjunction with other indicators of increased risk) or indictment on felony or fraud charges of an officer, key employee, or loan agent involved with SBAprograms for the Intermediary or NTAP).

(d)Additional grounds specific to Intermediaries. In addition to the grounds set forth in paragraph (c) of this section, SBA may take enforcement action against an Intermediary for:

(1) Failure to satisfactorily provide in-house technical assistance to Microloan clients and prospective Microloan clients; or

(2) Failure to close and fund the required number of microloans per year under § 120.716.

(e)Additional grounds specific to NTAPs. In addition to grounds set forth in paragraph (c) of this section, SBA may take enforcement action against an NTAP for failure to show that, for every 30 clients for which the NTAP provided technical assistance, at least one client received a loan from the private sector.

[73 FR 75521, Dec. 11, 2008, as amended at 80 FR 34047, June 15, 2015]

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United States Code
Statutes at Large

Title 13 published on 2015-10-16

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 13 CFR Part 120 after this date.

  • 2016-08-09; vol. 81 # 153 - Tuesday, August 9, 2016
    1. 81 FR 52595 - Miscellaneous Amendments to Business Loan Programs and Surety Bond Guarantee Program
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      Proposed rule.
      SBA must receive comments to the proposed rule on or before October 11, 2016.
      13 CFR Parts 115 and 120

Title 13 published on 2015-10-16.

The following are only the Rules published in the Federal Register after the published date of Title 13.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2016-06-27; vol. 81 # 123 - Monday, June 27, 2016
    1. 81 FR 41423 - Affiliation for Business Loan Programs and Surety Bond Guarantee Program
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      Final rule.
      This rule is effective July 27, 2016.
      13 CFR Parts 109, 115, 120, and 121