[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2017 Engrossed in Senate (ES)]
107th CONGRESS
2d Session
S. 2017
_______________________________________________________________________
AN ACT
To amend the Indian Financing Act of 1974 to improve the effectiveness
of the Indian loan guarantee and insurance program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Indian Financing Amendments Act of
2002''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that--
(1) the Indian Financing Act of 1974 (25 U.S.C. 1451 et
seq.) was intended to provide Native American borrowers with
access to commercial sources of capital that otherwise would
not be available through the guarantee or insurance of loans by
the Secretary of the Interior;
(2) although the Secretary of the Interior has made loan
guarantees and insurance available, use of those guarantees and
that insurance by lenders to benefit Native American business
borrowers has been limited;
(3) 27 years after the date of enactment of the Indian
Financing Act of 1974 (25 U.S.C. 1451 et seq.), the promotion
and development of Native American-owned business remains an
essential foundation for growth of economic and social
stability of Native Americans;
(4) use by commercial lenders of the available loan
insurance and guarantees may be limited by liquidity and other
capital market-driven concerns; and
(5) it is in the best interest of the insured and
guaranteed loan program of the Department of the Interior--
(A) to encourage the orderly development and
expansion of a secondary market for loans guaranteed or
insured by the Secretary of the Interior; and
(B) to expand the number of lenders originating
loans under the Indian Financing Act of 1974 (25 U.S.C.
1451 et seq.).
(b) Purpose.--The purpose of this Act is to reform and clarify the
Indian Financing Act of 1974 (25 U.S.C. 1451 et seq.) in order to--
(1) stimulate the use by lenders of secondary market
investors for loans guaranteed or insured under a program
administered by the Secretary of the Interior;
(2) preserve the authority of the Secretary to administer
the program and regulate lenders;
(3) clarify that a good faith investor in loans insured or
guaranteed by the Secretary will receive appropriate payments;
(4) provide for the appointment by the Secretary of a
qualified fiscal transfer agent to establish and administer a
system for the orderly transfer of those loans; and
(5)(A) authorize the Secretary to promulgate regulations to
encourage and expand a secondary market program for loans
guaranteed or insured by the Secretary; and
(B) allow the pooling of those loans as the secondary
market develops.
SEC. 3. AMENDMENTS TO INDIAN FINANCING ACT.
(a) Limitation on Loan Amounts Without Prior Approval.--Section 204
of the Indian Financing Act of 1974 (25 U.S.C. 1484) is amended in the
last sentence by striking ``$100,000'' and inserting ``$250,000''.
(b) Sale or Assignment of Loans and Underlying Security.--Section
205 of the Indian Financing Act of 1974 (25 U.S.C. 1485) is amended--
(1) by striking ``Any loan guaranteed'' and inserting the
following:
``(a) In General.--Any loan guaranteed or insured''; and
(2) by adding at the end the following:
``(b) Initial Transfers.--
``(1) In general.--The lender of a loan guaranteed or
insured under this title may transfer to any individual or
legal entity--
``(A) all rights and obligations of the lender in
the loan or in the unguaranteed or uninsured portion of
the loan; and
``(B) any security given for the loan.
``(2) Additional requirements.--With respect to a transfer
described in paragraph (1)--
``(A) the transfer shall be consistent with such
regulations as the Secretary shall promulgate under
subsection (i); and
``(B) the lender shall give notice of the transfer
to the Secretary.
``(3) Responsibilities of transferee.--On any transfer
under paragraph (1), the transferee shall--
``(A) be deemed to be the lender for the purpose of
this title;
``(B) become the secured party of record; and
``(C) be responsible for--
``(i) performing the duties of the lender;
and
``(ii) servicing the loan in accordance
with the terms of the guarantee by the
Secretary of the loan.
``(c) Secondary Transfers.--
``(1) In general.--Any transferee under subsection (b) of a
loan guaranteed or insured under this title may transfer to any
individual or legal entity--
``(A) all rights and obligations of the transferee
in the loan or in the unguaranteed or uninsured portion
of the loan; and
``(B) any security given for the loan.
``(2) Additional requirements.--With respect to a transfer
described in paragraph (1)--
``(A) the transfer shall be consistent with such
regulations as the Secretary shall promulgate under
subsection (i); and
``(B) the transferor shall give notice of the
transfer to the Secretary.
``(3) Acknowledgment by secretary.--On receipt of a notice
of a transfer under paragraph (2)(B), the Secretary shall issue
to the transferee an acknowledgement by the Secretary of--
``(A) the transfer; and
``(B) the interest of the transferee in the
guaranteed or insured portion of the loan.
``(4) Responsibilities of lender.--Notwithstanding any
transfer permitted by this subsection, the lender shall--
``(A) remain obligated on the guarantee agreement
or insurance agreement between the lender and the
Secretary;
``(B) continue to be responsible for servicing the
loan in a manner consistent with that guarantee
agreement or insurance agreement; and
``(C) remain the secured creditor of record.
``(d) Full Faith and Credit.--
``(1) In general.--The full faith and credit of the United
States is pledged to the payment of all loan guarantees and
loan insurance made under this title after the date of
enactment of this subsection.
``(2) Validity.--
``(A) In general.--Except as provided in
subparagraph (B), the validity of a guarantee or
insurance of a loan under this title shall be
incontestable if the obligations of the guarantee or
insurance held by a transferee have been acknowledged
under subsection (c)(3).
``(B) Exception for fraud or misrepresentation.--
Subparagraph (A) shall not apply in a case in which a
transferee has actual knowledge of fraud or
misrepresentation, or participates in or condones fraud
or misrepresentation, in connection with a loan.
``(e) Damages.--Notwithstanding section 3302 of title 31, United
States Code, the Secretary may recover from a lender of a loan under
this title any damages suffered by the Secretary as a result of a
material breach of the obligations of the lender with respect to a
guarantee or insurance by the Secretary of the loan.
``(f) Fees.--The Secretary may collect a fee for any loan or
guaranteed or insured portion of a loan that is transferred in
accordance with this section.
``(g) Central Registration of Loans.--On promulgation of final
regulations under subsection (i), the Secretary shall--
``(1) provide for a central registration of all guaranteed
or insured loans transferred under this section; and
``(2) enter into 1 or more contracts with a fiscal transfer
agent--
``(A) to act as the designee of the Secretary under
this section; and
``(B) to carry out on behalf of the Secretary the
central registration and fiscal transfer agent
functions, and issuance of acknowledgements, under this
section.
``(h) Pooling of Loans.--
``(1) In general.--Nothing in this title prohibits the
pooling of whole loans or interests in loans transferred under
this section.
``(2) Regulations.--In promulgating regulations under
subsection (i), the Secretary may include such regulations to
effect orderly and efficient pooling procedures as the
Secretary determines to be necessary.
``(i) Regulations.--Not later than 180 days after the date of
enactment of this subsection, the Secretary shall develop such
procedures and promulgate such regulations as are necessary to
facilitate, administer, and promote transfers of loans and guaranteed
and insured portions of loans under this section.''.
Passed the Senate September 17, 2002.
Attest:
Secretary.
107th CONGRESS
2d Session
S. 2017
_______________________________________________________________________
AN ACT
To amend the Indian Financing Act of 1974 to improve the effectiveness
of the Indian loan guarantee and insurance program.