II 111th CONGRESS 2d Session S. 3432 IN THE SENATE OF THE UNITED STATES May 27 (legislative day, May 26), 2010 Mrs. Boxer introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To establish a temporary Working Capital Express loan guarantee program for small business concerns, and for other purposes.

1.

Short title

This Act may be cited as the Working Capital Express Act of 2010.

2.

Working Capital Express Program

(a)

Program established

(1)

Working capital express program

Section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31)) is amended by adding at the end the following: (G)

Working capital express program in response to economic crisis

(i)

Loan guarantees

The Administrator may guarantee loans for working capital under the Express Loan Program made by lenders designated in accordance with clause (iii)(I) to small business concerns that have been in business for not less than 2 years before the date on which the small business concern submits an application for a loan under this subparagraph. (ii)

Loan terms

(I)

Amount

Notwithstanding subparagraph (D), the Administrator may guarantee a loan of not more than $750,000 under this subparagraph. (II)

Guarantee rate

Notwithstanding subparagraph (A)(iii), the guarantee rate for a loan under this subparagraph shall be 80 percent. (iii)

Program safeguards

(I)

Eligibility

The Administrator shall, by rule, establish criteria for the designation of lenders that are eligible to make a loan guaranteed under this subparagraph. (II)

Underwriting standards

The Administrator shall, by rule, establish underwriting standards for loans guaranteed under this subparagraph, to ensure that the Administrator may guarantee new loans under this subparagraph until December 1, 2011. The standards established under this subclause shall require the borrower to submit income tax returns to provide verification of business income. (III)

Default and delinquency rates

The Administrator shall— (aa)by rule establish maximum default and delinquency rates permissible for loans made under this subparagraph; and (bb)suspend the eligibility to make a loan guaranteed under this subparagraph of any lender that has a default or delinquency rate grater than the rate established under item (aa). (IV)

Penalties for fraud

Notwithstanding section 16, a lender that knowingly makes a false statement with respect to the income, assets, or other qualifications of a small business concern in connection with a loan or application for a loan guaranteed under this subparagraph shall be fined not more than $500,000, imprisoned for not more than 5 years, or both. (iv)

Authority of participating lenders

A lender designated in accordance with clause (iii) shall have the same authority with respect to the underwriting and liquidation of a loan guaranteed under this subparagraph as a lender participating in the Certified Lenders Program under paragraph (19). (v)

Payment of claims by the Administrator

The Administrator shall pay a claim by a lender on a guarantee of a loan by the Administrator under this subparagraph, unless the Administrator determines that— (I)the lender has committed fraud with respect to the loan; or (II)there is a material error in the loan origination, servicing, or liquidation process. (vi)

Total amount of loans

Not more than 20 percent of the total dollar amount of all loans guaranteed under this subsection in any fiscal year may be loan guarantees under this subparagraph. (vii)

Default rate

The Administrator shall calculate the default rate for loans guaranteed under this subparagraph separately from the default rate for any other loans made or guaranteed by the Administration. (viii)

Self-screening website

The Administrator shall establish a website to allow the owners and operators of small business concerns to assess their eligibility to obtain loans guaranteed under this subparagraph. . (2)

Conforming amendment

Section 7(a)(25)(B) of the Small Business Act (15 U.S.C. 636(a)(25)(B)) is amended by inserting , and does not include loans under paragraph (31)(G) after by law. (b)

Prospective repeal

(1)

In general

Effective December 1, 2011, section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended— (A)in paragraph (25)(B), by striking , and does not include loans under paragraph (31)(G); and (B)in paragraph (31), by striking subparagraph (G). (2)

Penalties

Notwithstanding paragraph (1), subclause (IV) of section 7(a)(31)(G)(iii) of the Small Business Act, as added by this Act, shall continue to apply on and after December 1, 2011, to loans guaranteed under section 7(a)(31)(G) of the Small Business Act.