[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]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
Reporting and Recordkeeping Requirements Under OMB Review
AGENCY: Small Business Administration.
ACTION: 30-Day notice.
-----------------------------------------------------------------------
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
[[Page 46988]]
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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
[[Page 46989]]
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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