[Federal Register Volume 83, Number 180 (Monday, September 17, 2018)]
[Notices]
[Pages 46987-46989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20180]


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SMALL BUSINESS ADMINISTRATION


Reporting and Recordkeeping Requirements Under OMB Review

AGENCY: Small Business Administration.

ACTION: 30-Day notice.

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SUMMARY: The Small Business Administration (SBA) is publishing this 
notice to comply with requirements of the Paperwork Reduction Act 
(PRA), which requires agencies to submit proposed reporting and 
recordkeeping requirements to OMB for review and approval, and to 
publish a notice in the Federal Register notifying the public of that 
submission.

DATES: Submit comments on or before October 17, 2018.

ADDRESSES: Comments should refer to the information collection by name 
and/or OMB Control Number and should be sent to: Agency Clearance 
Officer, Curtis Rich, Small Business Administration, 409 3rd Street SW, 
5th Floor, Washington, DC 20416; and SBA Desk Officer, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
New Executive Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Curtis Rich, Agency Clearance Officer, 
(202) 205-7030 [email protected].
    Copies: A copy of the Form OMB 83-1, supporting statement, and 
other documents submitted to OMB for

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review may be obtained from the Agency Clearance Officer.

SUPPLEMENTARY INFORMATION: SBA's Office of Credit Risk Management 
(OCRM) is responsible for the oversight and supervision of the SBA 
operations of approximately 4000 7(a) Lenders, Certified Development 
Companies (``CDCs''), and Microloan Intermediaries 
(``Intermediaries''), that participate in SBA's business loan programs 
and, for enforcement of the applicable rules and regulations. 
Currently, the agency guarantees more than $90 billion dollars in small 
business loans through these programs. The information collection 
described in detail below helps OCRM protect the safety and soundness 
of the business loan programs and taxpayer dollars.
    In general, SBA collects information in connection with PARRiS \1\ 
reviews for 7(a) Federally-regulated Lenders, SMART \2\ reviews for 
CDCs, and PARRiS Safety and Soundness Examinations for SBA Supervised 
Lenders including Small Business Lending Companies (SBLCs) and Non-
Federally Regulated Lenders (NFRLs).\3\ SBA also requests certain 
information when it conducts Delegated Authority Reviews of 7(a) 
Lenders and CDCs, and Microloan Intermediary Site Visits. The 
discussion below identifies the nature of the information to be 
collected for each type of lender and the related review or 
examination. In addition, SBA has created separate lists, which are 
also discussed below, to clearly identify the information to be 
collected.
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    \1\ PARRiS refers to the specific risk components reviewed for 
7(a) Lenders: (i) Portfolio Performance; (ii) Asset Management; 
(iii) Regulatory Compliance; (iv) Risk Management; and (v) Special 
Items.
    \2\ SMART refers to the specific risk components reviewed for 
Certified Development Companies: (i) Solvency and Financial 
Condition; (ii) Management and Board Governance; (iii) Asset Quality 
and Servicing; (iv) Regulatory Compliance; and (v) Technical Issues 
and Mission.
    \3\ SBLCs and NFRLs are defined in 15 U.S.C. 632(r) and 13 CFR 
120.10.
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I. 7(a) Lender and CDC PARRIS and SMART Analytical and Full Reviews and 
Safety and Soundness Exams

A. Common Information Collected

    For all Analytical Reviews, Full Reviews, and Safety and Soundness 
examinations \4\ of 7(a) lenders and CDCs, as applicable, in general, 
SBA requests information related to the lender's or CDC's management 
and operation, eligibility of its SBA loans for SBA guaranty, 
compliance with SBA Loan Program Requirements, credit administration, 
and performance of its SBA loan portfolio.
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    \4\ Safety and Soundness Examinations are only performed on SBA 
Supervised Lenders in the 7(a) program. SBA Supervised Lenders 
include SBA licensed Small Business Lending Companies and Non-
Federally Regulated Lenders as defined in 13 CFR 120.10. Analytical 
Reviews and Full Reviews are performed on 7(a) Lenders and CDCs.
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    1. Management and Operations: The information requested generally 
includes the SBA program organization chart with responsibilities, 
business plan, financial and program audits, evidence of lender 
compliance with regulatory orders and agreements (if applicable and as 
appropriate), and staff training on SBA lending.
    2. Eligibility and Credit Administration: In reviewing these areas, 
SBA primarily requests lender's or CDC's policies, loan sample files; 
independent loan reviews; loan credit scoring and risk rating 
methodologies; and information on loans approved as exceptions to 
policy.
    3. Compliance with Loan Program Requirements: Here, SBA collects 
information on services and fees charged for Third-party vendors,\5\ 
lender's FTA\6\ trust account, and lender's use of the System of Awards 
Management to perform agent due diligence.
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    \5\ For purposes of this notice, Third-party vendors include, 
for example, Loan Agents (e.g., Packagers and Lender Service 
Providers) and Professional Managers with management contracts.
    \6\ FTA refers to SBA's Fiscal and Transfer Agent. 7(a) Lenders 
that sell SBA loans in the Secondary Market are required by the 
terms of the Form 1086, Secondary Participation Guaranty Agreement, 
to deposit the guaranteed portion of loan payments in a segregated 
account for the benefit of investors.
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    4. Portfolio Performance: In considering lender or CDC portfolio 
performance, SBA requests that lenders provide a listing of loans 
indicating those past due, those with servicing actions, individual 
risk ratings, and those in liquidation or purchased for SBA to compare 
with SBA data. SBA also requests that lenders provide an explanation 
for risks identified (e.g., identified by high risk metrics or PARRiS 
flags triggered).
    Further detail on the information SBA collects in Analytical and 
Full Reviews and Safety and Soundness Exams is contained in the SBA 
Supervised Lender Safety and Soundness Examination/Full Review 
Information Request; 7(a) Lender PARRiS Analytical Review Information 
Request; CDC SMART Analytical Review Information Request; 7(a) Lender 
PARRiS Full Review Information Request; and, CDC SMART Full Review 
Information Request. Each Information Request document is available 
upon request.

B. SBA Supervised Lender Supplemental Information for Safety and 
Soundness Exams

    SBA is the primary federal regulator for SBA licensed SBLCs and 
NFRLs that participate in the 7(a) program.\7\ Because SBA is the 
primary federal regulator, SBA performs comprehensive exams that 
require information in addition to that referenced in Section I.A. 
Specifically, for SBA Supervised Lender examinations, SBA additionally 
requests corporate governance documents and information on the lender's 
financial condition, internal controls and risk mitigation. SBA also 
requests information on higher risk loans, payments related to loans in 
loan sample, fidelity insurance, credit scoring model validation and 
lender self-testing for compliance with SBA Loan Program Requirements. 
SBA Supervised Lender safety and soundness examinations include review 
of capital, earnings, and liquidity in accordance with 13 CFR 
120.1050(b) and accordingly, SBA requests information on the lender's 
financing, asset account calculations, and dividend policy. Further 
detail on the information that SBA requests for SBA Supervised Lender 
examinations is contained in SBA Supervised Lender Safety and Soundness 
Examination/Full Review Information Request. This document is available 
upon request.
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    \7\ SBA Supervised Lenders are a relatively small subset of 7(a) 
Lenders. 7(a) Lenders include SBA Supervised Lenders and Federally 
Regulated 7(a) Lenders (i.e., those lenders regulated by the federal 
bank regulators--Federal Deposit Insurance Corporation, the Office 
of the Comptroller of the Currency, the Federal Reserve Board, the 
National Credit Union Administration, and the Farm Credit 
Administration).
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C. CDC Supplemental Information

    SBA is also the primary federal regulator for CDCs. SBA guarantees 
100% of 504 program debentures. Therefore, SBA also requests additional 
information to prudently oversee CDCs, as it does for SBA Supervised 
Lenders. The additional information generally requested includes 
corporate governance documents and information on lender's financial 
condition, internal controls and risk mitigation practices, and the 
CDC's plan for investment in other local economic development. In 
addition, SBA requests, as applicable, information on a CDC's Premier 
Certified Lenders Program (PCLP) Loan Loss Reserve Account and loans 
that a CDC packages for other 7(a) lenders. You may request a copy of 
the CDC SMART Analytical Review Information Request and CDC SMART Full 
Review

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Information Request for more details on this supplemental information 
request.

I. 7(a) Lender and CDC Delegated Authority Reviews

    SBA collects information for Delegated Authority Reviews performed, 
in general, every two years for lenders applying or reapplying to SBA's 
Delegated Authority Programs (e.g., Preferred Lender Program for 7(a) 
Lenders and Accredited Lender Program or PCLP for CDCs).\8\ If a lender 
is scheduled to receive an Analytical or Full Review or a Safety and 
Soundness Examination during the same review cycle as a Delegated 
Authority Review, generally SBA will coordinate the timing of the 
reviews and the related information collections to lessen the burden.
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    \8\ Through SBA's Delegated Authority programs, qualified 
lenders may process SBA loans with further autonomy and reduced 
paperwork than through regular SBA loan processing.
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    For 7(a) delegated authority reviews, SBA requests information on 
organizational changes, staff training and experience, lender 
explanation for risk indicators triggered, lender risk mitigation 
efforts, lender's financial condition, lender's deficiencies underlying 
regulatory orders (if applicable and as appropriate), and loan sample 
files (as requested).
    For CDC delegated authority reviews, SBA requests corporate 
governance documents and additional information on organization/staff, 
financial condition, internal controls and risk mitigation. SBA also 
requests a CDC's policies including its no-adverse-change 
determination, loan reviews, and lender explanation for its higher risk 
metrics.
    For more detail on Delegated Authority Review collections, you may 
request a copy of the 7(a) Lender Nomination for Delegated Authority 
Information Request; and, the ALP/PCLP Renewal Guide and Information 
Request.

II. Microloan Intermediary Reviews

    For Microloan Program Intermediary oversight, SBA District Offices 
perform an annual site visit for active Intermediaries. SBA requests 
information on SBA program management and operations including 
organizational chart with responsibilities, business plan, staff 
training on SBA lending, and risk mitigation practices. SBA primarily 
reviews the Intermediary's credit administration through a loan sample 
file request. Specifics on the information collected are contained in 
SBA's Microloan Intermediary Site Visit/Review Information Request 
document, a copy of which is available upon request.

III. Other Reviews, Corrective Action Plans, and Increased Supervision 
for 7(a) Lenders, CDCs, and Intermediaries

    SBA may pose additional information requests for its Other 
Reviews,\9\ generally of higher risk lenders. For example, for 7(a) 
lenders under a public regulatory order or agreement, SBA may request 
information relating to the status of the underlying deficiencies, as 
appropriate, or request loan files for SBA to review to mitigate risk 
before the loan can be sold into the secondary market. SBA may also 
request corrective action plans from lenders following reviews where 
findings and deficiencies are identified. Finally, SBA may request 
additional information of lenders under increased supervision. However, 
information requests for increased supervision tend to be lender 
specific.
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    \9\ Other Reviews may include, for example, Secondary Market 
loan reviews, reviews of lender self-assessments, or Agreed Upon 
Procedures Reviews performed by third-party practitioners or an 
independent office within the Lender to which SBA and the Lender 
agree, that follow a review protocol as prescribed or approved by 
SBA.
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    In general, for information that has already been provided by a 
7(a) lender, a CDC, or a Microloan Intermediary but is unchanged, a 
lender may certify that the information was already provided and is 
unchanged in lieu of resubmitting the information. The certification 
must also state to whom and on what date the information was provided 
to SBA.

Summary of Information Collection

    Title: SBA Lender and Microloan Intermediary Reporting Requirements 
OMB Control Number: 3245-0365.
    Description of Respondents: SBA 7(A) Lenders, Certified Development 
Companies, and Microloan Intermediary lenders.
    Form Numbers: N/A.
    Total Estimated Annual Responses: 1,861.
    Total Estimated Annual Hour Burden: 14,573.

Solicitation of Public Comments

    Comments may be submitted on (a) whether the collection of 
information is necessary for the agency to properly perform its 
functions; (b) whether the burden estimates are accurate; (c) whether 
there are ways to minimize the burden, including through the use of 
automated techniques or other forms of information technology; and (d) 
whether there are ways to enhance the quality, utility, and clarity of 
the information.

Curtis Rich,
Management Analyst.
[FR Doc. 2018-20180 Filed 9-14-18; 8:45 am]
 BILLING CODE 8025-01-P