[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2017 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2017

To amend the Indian Financing Act of 1974 to improve the effectiveness 
          of the Indian loan guarantee and insurance program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 14, 2002

  Mr. Campbell (for himself and Mr. Inouye) introduced the following 
  bill; which was read twice and referred to the Committee on Indian 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
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 Act Amendments 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 capital sources that, but for that Act, 
        would not be available through loans guaranteed by the 
        Secretary of the Interior;
            (2) although the Secretary of the Interior has made loan 
        guarantees available, acceptance of loan guarantees by lenders 
        to benefit Native American business borrowers has been limited;
            (3) 27 years after enactment of the Act, the promotion and 
        development of Native American-owned business remains an 
        essential foundation for growth of economic and social 
        stability of Native Americans;
            (4) acceptance by lenders of the loan guarantees may be 
        limited by liquidity and other capital market-driven concerns; 
        and
            (5) it is in the best interest of the guaranteed loan 
        program to--
                    (A) encourage the orderly development and expansion 
                of a secondary market for loans guaranteed by the 
                Secretary; and
                    (B) expand the number of lenders originating loans 
                under that Act.
    (b) Purposes.--The purposes of this Act are--
            (1) to stimulate the use by lenders of secondary market 
        investors for loans guaranteed by the Secretary of the 
        Interior;
            (2) to preserve the authority of the Secretary to 
        administer the program and regulate lenders;
            (3) to clarify that a good faith investor in loans 
        guaranteed by the Secretary will receive appropriate payments;
            (4) to provide for the appointment by the Secretary of a 
        qualified fiscal transfer agent to administer a system for the 
        orderly transfer of the loans;
            (5) to authorize the Secretary to--
                    (A) promulgate regulations to encourage and expand 
                a secondary market program for loans guaranteed by the 
                Secretary; and
                    (B) allow the pooling of the loans as the secondary 
                market develops; and
            (6) to authorize the Secretary to establish a schedule for 
        assessing lenders and investors for the necessary costs of the 
        fiscal transfer agent and system.

SEC. 3. LOAN GUARANTEES.

    Section 205 of the Indian Financing Act of 1974 (25 U.S.C. 1485) is 
amended--
            (1) by inserting ``(a) In General.--'' before ``Any loan''; 
        and
            (2) by adding at the end the following:
    ``(b) Transfer of Loans and Unguaranteed Portions of Loans.--
            ``(1) Transfer.--
                    ``(A) In general.--The lender of a loan guaranteed 
                under this title may transfer to any person--
                            ``(i) all of the rights and obligations of 
                        the lender under the loan, or in an 
                        unguaranteed portion of the loan; and
                            ``(ii) the security given for the loan or 
                        unguaranteed portion.
                    ``(B) Regulations.--A transfer under subparagraph 
                (A) shall be consistent with such regulations as the 
Secretary shall promulgate under subsection (g).
                    ``(C) Notice.--A lender that completes a transfer 
                under subparagraph (A) shall give notice of the 
                transfer to the Secretary (or a designee of the 
                Secretary).
            ``(2) Effect of transfer.--On any transfer under this 
        subsection, the transferee shall--
                    ``(A) be considered to be the lender under 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 or portion of the 
                        loan, as appropriate, in accordance with the 
                        terms of guarantee of the Secretary of the loan 
                        or portion of the loan.
    ``(c) Transfer of Guaranteed Portions of Loans.--
            ``(1) Transfer.--
                    ``(A) In general.--The lender of a loan guaranteed 
                under this title, and any subsequent transferee of all 
                or part of the guaranteed portion of the loan, may 
                transfer to any person--
                            ``(i) all or part of the guaranteed portion 
                        of the loan; and
                            ``(ii) the security given for the 
                        guaranteed portion transferred.
                    ``(B) Regulations.--A transfer under subparagraph 
                (A) shall be consistent with such regulations as the 
                Secretary shall promulgate under subsection (g).
                    ``(C) Notice.--A lender that completes a transfer 
                under subparagraph (A) shall give notice of the 
                transfer to the Secretary (or a designee of the 
                Secretary).
                    ``(D) Acknowledgement.--On receipt of notice of a 
                transfer under subparagraph (C), the Secretary (or a 
                designee of the Secretary) shall issue to the 
                transferee the acknowledgement of the Secretary of--
                            ``(i) the transfer; and
                            ``(ii) the interest of the transferee in 
                        the guaranteed portion of a loan that was 
                        transferred.
            ``(2) Effect.--Notwithstanding any other provision of law, 
        with respect to any transfer under this subsection, the lender 
        shall--
                    ``(A) remain obligated under the guarantee 
                agreement between the lender and the Secretary;
                    ``(B) continue to be responsible for servicing the 
                loan in a manner consistent with the guarantee 
                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 made 
        under this title.
            ``(2) Validity.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the validity of a guarantee of a loan 
                under this title shall be incontestable if the 
                guarantee is held by a transferee of a guaranteed 
                obligation whose interest in a guaranteed loan has been 
                acknowledged by the Secretary (or a designee of the 
                Secretary) under subsection (c)(1)(D).
                    ``(B) Fraud or misrepresentation.--Subparagraph (A) 
                shall not apply in a case in which the Secretary 
                determines that a transferee of a loan or portion of a 
                loan transferred under this section has actual 
                knowledge of fraud or misrepresentation, or 
                participates in or condones fraud or misrepresentation, 
                in connection with the loan.
    ``(e) Damages.--The Secretary may recover from a lender any damages 
suffered by the Secretary as a result of a material breach of an 
obligation of the lender under the guarantee of the loan.
    ``(f) Fee.--The Secretary may collect a fee for any loan or 
guaranteed portion of a loan transferred in accordance with subsection 
(b) or (c).
    ``(g) Regulations.--Not later than 180 days after the date of 
enactment of this subsection, the Secretary shall promulgate such 
regulations as are necessary to facilitate, administer, and promote the 
transfer of loans and guaranteed portions of loans under this section.
    ``(h) Central Registration.--On promulgation of final regulations 
under subsection (g), the Secretary shall--
            ``(1) provide for the central registration of all loans and 
        portions of loans transferred under this section; and
            ``(2) contract with a fiscal transfer agent--
                    ``(A) to act as a designee of the Secretary; and
                    ``(B) on behalf of the Secretary--
                            ``(i) to carry out the central registration 
                        and paying agent functions; and
                            ``(ii) to issue acknowledgements of the 
                        Secretary under subsection (c)(1)(D).
    ``(i) Pooling.--
            ``(1) In general.--Nothing in this title prohibits the 
        pooling of whole loans, or portions of loans, transferred under 
        this section.
            ``(2) Regulations.--The Secretary may promulgate 
        regulations to effect orderly and efficient pooling procedures 
        under this title.''.
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