[Federal Register Volume 65, Number 157 (Monday, August 14, 2000)]
[Rules and Regulations]
[Page 49481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19339]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 120


Business Loan Programs

AGENCY: Small Business Administration.

ACTION: Final rule; correcting amendment.

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SUMMARY: The U.S. Small Business Administration (SBA) published a final 
rule governing 7(a) loan securitizations on February 10, 1999. In that 
rule, SBA inadvertently omitted a sentence in the section covering 
capital requirements for securitizing institutions (``securitizers''). 
This document adds that sentence.

DATES: Effective on August 14, 2000.

FOR FURTHER INFORMATION CONTACT: James W. Hammersley, Director, 
Secondary Market Sales, (202) 205-7505.

SUPPLEMENTARY INFORMATION: SBA published a final rule in the Federal 
Register on February 10, 1999, (64 FR 6503), governing 7(a) loan 
securitizations. This correction adds a sentence to Sec. 120.425(a), on 
capital requirements, that was inadvertently omitted. Section 
120.425(a) provides that all ``securitizers must be considered to be 
`well capitalized' by their regulator.'' It further states that ``SBA, 
as the regulator, will consider a nondepository institution to be `well 
capitalized' if it maintains a minimum unencumbered paid in capital and 
paid in surplus equal to at least 10 percent of its assets, excluding 
the guaranteed portion of 7(a) loans.'' This correction adds that 
``[t]he capital charge applies to the remaining balance outstanding on 
the unguaranteed portion of the securitizer's 7(a) loans in its 
portfolio and in any securitization pools.''
    This correction is consistent with notice provided in the preamble 
to the final rule published on February 10, 1999 (64 FR 6503). That 
preamble stated that commenters requested SBA to clarify that ``the 
capital charge applies not only to the unguaranteed portion of the 
securitizer's 7(a) loans in the portfolio but also to the remaining 
balance outstanding in the securitization pools'' and that SBA 
``incorporated'' this clarification ``into the final rule.''
    By making this correction, SBA is incorporating the clarification, 
as intended, into the final rule.

List of Subjects in 13 CFR Part 120

    Loan programs--business, Small businesses.
    Accordingly, SBA amends 13 CFR part 120 by making the following 
correcting amendment:

PART 120--[CORRECTED]

    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. In Sec. 120.425, amend paragraph (a) by adding a new sentence 
after the fourth sentence to read as follows:


Sec. 120.425  What are the minimum elements that SBA will require 
before consenting to a securitization?

* * * * *
    (a) * * * The capital charge applies to the remaining balance 
outstanding on the unguaranteed portion of the securitizer's 7(a) loans 
in its portfolio and in any securitization pools. * * *
* * * * *

Aida Alvarez,
Administrator.
[FR Doc. 00-19339 Filed 8-11-00; 8:45 am]
BILLING CODE 8025-01-P