[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
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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.

-----------------------------------------------------------------------

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