[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Rules and Regulations]
[Pages 75833-75834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25555]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 85, No. 229 / Friday, November 27, 2020 /
Rules and Regulations
[[Page 75833]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 109
RIN 3245-AH15
Regulatory Reform Initiative: Intermediary Lending Pilot Program
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
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SUMMARY: The U.S. Small Business Administration (SBA) is removing three
regulations governing the application and selection process for
Intermediary Lending Pilot (ILP) program Intermediaries. These
regulations are no longer necessary because SBA is no longer authorized
to select new ILP Intermediaries. The removal of these regulations will
assist the public by simplifying SBA's regulations. SBA is also making
two conforming amendments to avoid confusion.
DATES: This rule is effective December 28, 2020.
FOR FURTHER INFORMATION CONTACT: Daniel Upham, Chief, Microenterprise
Development Division, Office of Financial Assistance (202) 205-7001 or
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
Part 109, Intermediary Lending Pilot Program
The Intermediary Lending Pilot (ILP) program was authorized by
Congress as a 3-year pilot program in the Small Business Jobs Act of
2010, Public Law 111-240, enacted September 27, 2010. Under the ILP
program, SBA provided loans to selected nonprofit intermediaries (ILP
Intermediaries) for the purpose of providing loans to small businesses.
Currently, there are 33 lenders participating in the ILP program. SBA
was authorized to make loans to ILP Intermediaries in fiscal years
2011, 2012, and 2013. SBA published a proposed rule on March 5, 2020,
proposing to remove three regulations from the Code of Federal
Regulations (CFR) that are no longer necessary because SBA is no longer
authorized to select new ILP Intermediaries. 85 FR 12875 (March 5,
2020). The proposed rule also contained two conforming amendments. SBA
received no comments to these proposed ILP changes. Therefore, SBA is
proceeding with the changes as proposed.
II. Section by Section Analysis
A. Section 109.200, Application To Become an ILP Intermediary
This section describes the application process to become an ILP
Intermediary, including publication of a Notice of Funds Availability
(NOFA) in the Federal Register to announce the availability of funds
for the program and specify any special rules, procedures, and
restrictions for a particular funding round. This section also includes
the requirements for an ILP Intermediary application.
B. Section 109.210, Evaluation and Selection of ILP Intermediaries
This section describes the process by which SBA evaluates ILP
Intermediary applications. The rule specifies that SBA will make loans
to not more than 20 selected ILP Intermediaries, and that applications
will be evaluated and scored based on the criteria specified in the
NOFA.
C. Section 109.220, Loan Limits--Loans to ILP Intermediaries
Section 109.220 states that no ILP Intermediary may receive more
than $1 million in ILP Loans.
SBA's authority to make loans to ILP Intermediaries has expired;
therefore, SBA is not accepting any new ILP Intermediary applications.
Since the program no longer allows for new ILP Intermediaries, the
removal of these three regulations will reduce confusion and regulatory
burden. Requirements for current ILP Intermediaries are found in the
remaining provisions of part 109.
D. Conforming Amendments
In addition to removing the three regulations described above, the
final rule also makes two conforming amendments. First, SBA is revising
the definition of ILP Intermediary in section 109.20 to remove
reference to the competitive application process. Because the
regulations describing the application process (sections 109.200 and
109.210) have been removed, this revision is necessary to avoid
confusion. Second, SBA is removing the cross-reference to section
120.173, Lead-based paint, in section 109.440. Section 109.440 states
that loans made by an ILP Intermediary must comply with all applicable
laws, including SBA's Lead-based paint regulation in section 120.173.
In a separate rulemaking, SBA is proposing to remove section 120.173
because it is no longer necessary--16 CFR part 1303 already bans paint
containing a concentration of lead in excess of 0.009% (90 parts per
million) for use in residences, schools, hospitals, parks, playgrounds,
and public buildings or other areas where consumers will have direct
access to the painted surface. Therefore, SBA is removing the cross-
reference in part 109 as well.
III. Compliance With Executive Orders 12866, 13771, 12988, and 13132,
the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612)
A. Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule does not constitute a significant regulatory action for purposes
of Executive Order 12866 and is not a major rule under the
Congressional Review Act, 5 U.S.C. 801, et seq.
B. Executive Order 13771
This final rule is expected to be an Executive Order 13771
deregulatory action with an annualized net savings of $8,980 and a net
present value of $128,285 in savings, both in 2016 dollars. This rule
will remove information about applying to the ILP program which will
save potential applicants time in reading and researching/inquiring
about this obsolete program and reduce confusion around whether
applications are being accepted.
SBA is aware of approximately 500 nonprofit lenders that could
potentially search for and read about applying for the ILP program.
Assuming that, each year, 20 percent of these nonprofit lenders would
review SBA's ILP regulations and that each would save one hour of
review time due to removal
[[Page 75834]]
of the regulations discussed in this rule, these nonprofits would be
relieved of 100 burden hours. Valuing this time at $124.90 per hour--
the wage of a financial manager based on 2019 BLS data and adding 100%
more for benefits and overhead, this produces total savings per year of
$12,450 in current dollars.
C. Executive Order 13777
On February 24, 2017, the President issued Executive Order 13777,
Enforcing the Regulatory Reform Agenda, which further emphasized the
goal of the Administration to alleviate the regulatory burdens placed
on the public. Under Executive Order 13777, agencies must evaluate
their existing regulations to determine which ones should be repealed,
replaced, or modified. In doing so, agencies should focus on
identifying regulations that, among other things: Eliminate jobs or
inhibit job creation; are outdated, unnecessary or ineffective; impose
costs that exceed benefits; create a serious inconsistency or otherwise
interfere with regulatory reform initiatives and policies; or are
associated with Executive orders or other Presidential directives that
have been rescinded or substantially modified. SBA has engaged in this
process and has identified the regulations in this rulemaking as
appropriate for removal in accordance with Executive Order 13777.
D. Executive Order 12988
This action meets applicable standards set forth in sec. 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
E. Executive Order 13132
This rule does not have federalism implications as defined in
Executive Order 13132. It will not have substantial direct effects on
the States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in the Executive order. As
such it does not warrant the preparation of a Federalism Assessment.
F. Paperwork Reduction Act
The SBA has determined that this final rule does not affect any
existing collection of information.
G. Regulatory Flexibility Act
When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (RFA) requires the agency to ``prepare and make
available for public comment an initial regulatory flexibility
analysis'' which will ``describe the impact of the proposed rule on
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an
agency to certify a rule, in lieu of preparing an analysis, if the
proposed rulemaking is not expected to have a significant economic
impact on a substantial number of small entities.
SBA is aware of approximately 500 nonprofit lenders that could
potentially search for and read about applying to the ILP program. The
removal of obsolete regulations related to the ILP program would reduce
confusion for these lenders and the time required to read and/or
inquire about obsolete regulations. The total annual savings to these
nonprofit lenders is $12,450 in current dollars, or about $25 per
nonprofit lender. More information on this estimate can be found in the
Executive Order 13771 discussion above.
Accordingly, the Administrator of the SBA hereby certifies that
this rule will not have a significant economic impact on a substantial
number of small entities.
List of Subjects in 13 CFR Part 109
Community development, Loan program--business, Reporting and
recordkeeping requirements, Small businesses.
Accordingly, for the reasons stated in the preamble, SBA amends 13
CFR part 109 as follows:
PART 109--INTERMEDIARY LENDING PILOT PROGRAM
0
1. The authority citation for part 109 continues to read as follows:
Authority: 15 U.S.C. 634(b)(6), (b)(7), and 636(l).
0
2. Amend Sec. 109.20 by revising the definition of ``ILP
Intermediary'' to read as follows:
Sec. 109.20 Definitions.
* * * * *
ILP Intermediary means a private, nonprofit entity that has
received an ILP Loan.
* * * * *
Sec. Sec. 109.200, 109.210, and 109.220 [Removed and reserved]
0
3. Remove and reserve Sec. Sec. 109.200, 109.210, and 109.220.
Sec. 109.440 [Amended]
0
4. Amend Sec. 109.440 by removing the words ``120.173 (Lead-based
paint),''.
Jovita Carranza,
Administrator.
[FR Doc. 2020-25555 Filed 11-25-20; 8:45 am]
BILLING CODE P