[Federal Register Volume 87, Number 122 (Monday, June 27, 2022)]
[Notices]
[Pages 38250-38251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13597]


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

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 seeking approval 
from the Office of Management and Budget (OMB) for the information 
collection described below. In accordance with the Paperwork Reduction 
Act and OMB procedures, SBA is publishing this notice to allow all 
interested members of the public an additional 30 days to provide 
comments on the proposed collection of information.

DATES: Submit comments on or before July 27, 2022.

ADDRESSES: Written comments and recommendations for this information 
collection request should be sent within 30 days of publication of this 
notice to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection request by selecting ``Small Business 
Administration''; ``Currently Under Review,'' then select the ``Only 
Show ICR for Public Comment'' checkbox. This information collection can 
be identified by title and/or OMB Control Number.

FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the 
information collection and supporting documents from the Agency 
Clearance Office at [email protected], (202) 205-7030, or from 
www.reginfo.gov/public/do/PRAMain.

SUPPLEMENTARY INFORMATION: SBA's Office of Credit Risk Management 
(OCRM) is responsible for the oversight and supervision of the SBA 
operations of over 3100 7(a) Lenders, Certified Development Companies 
(``CDCs''), and Microloan Intermediaries (``Intermediaries'') that 
participate in SBA's business loan programs and is responsible for 
enforcement of the applicable rules and regulations. Currently, the 
Agency guarantees more than $110 billion dollars in small business 
loans through these programs.\1\ The information collection described 
in detail below helps OCRM protect the safety and soundness of the 
business loan programs and taxpayer dollars.
---------------------------------------------------------------------------

    \1\ These numbers do not include over 5,000 lenders that 
participated in the Paycheck Protection Program (PPP) that issued 
approximately 11.8 million guaranteed, forgivable loans for $800 
billion.
---------------------------------------------------------------------------

    In general, SBA collects information in connection with reviews for 
Federally-regulated 7(a) Lenders, CDCs, and SBA Supervised Lenders 
including Small Business Lending Companies (SBLCs) and Non-Federally 
Regulated Lenders (NFRLs).\2\ SBA also requests certain information 
when it conducts 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.
---------------------------------------------------------------------------

    \2\ SBLCs and NFRLs are defined in 15 U.S.C. 632(r) and 13 CFR 
120.10.
---------------------------------------------------------------------------

I. 7(a) Lender Diagnostic, Limited Scope, Limited Scope (Targeted) 
Reviews; CDC SMART Analytical and Full Reviews; and Supervised Lender 
Safety and Soundness Exams

A. Common Information Collected

    For all reviews, and Safety and Soundness examinations \3\ of 7(a) 
Lenders and CDCs, as applicable, in general, SBA requests information 
related to the 7(a) 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.
---------------------------------------------------------------------------

    \3\ 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 may request the Lender's or CDC's credit policies and procedures; 
servicing policies and procedures; loan sample files; independent loan 
reviews; underwriting, loan credit scoring, risk rating methodologies; 
and information on loans approved as exceptions to policy.
    3. Compliance with Loan Program Requirements: Here, SBA generally 
collects information on services and fees charged for Lenders' third-
party vendors,\4\ Lender's FTA \5\ trust account, and Lender's use of 
the System for Awards Management to perform agent due diligence. For 
CDCs, SBA collects additional information related to Loan Program 
Requirements as described below in Section I.C.
---------------------------------------------------------------------------

    \4\ 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.
    \5\ 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 may request 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 may also request that lenders provide an explanation 
for risks identified (e.g., identified by higher risk metrics or PARRiS 
flags triggered).
    Further detail on the information SBA collects in reviews, and 
Safety and Soundness Exams is contained in the SBA Supervised Lender 
Safety and Soundness Examination/Full Review Information Request; 7(a) 
Lender Diagnostic Review Request; 7(a) Lender Limited Scope Review 
Request; 7(a) Lender Limited Scope (Targeted) Review Request; CDC SMART 
Analytical 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.\6\ 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

[[Page 38251]]

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.
---------------------------------------------------------------------------

    \6\ SBA Supervised Lenders are a relatively small subset of 7(a) 
Lenders. 7(a) Lenders include SBA Supervised Lenders and 7(a) 
Lenders with a Federal Financial Institution Regulator as defined by 
13 CFR 120.10 (i.e., lenders regulated by the Federal Deposit 
Insurance Corporation, the Office of the Comptroller of the 
Currency, the Federal Reserve Board, the National Credit Union 
Administration, and/or 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 Lenders' 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 Information Request for more details on this supplemental 
information request.

II. 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. Delegated Authority programs include for 
example; the Preferred Lender Program (PLP) for 7(a) Lenders and 
Accredited Lender Program (ALP) or PCLP for CDCs.\7\ If a lender is 
scheduled to receive a 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.
---------------------------------------------------------------------------

    \7\ 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 may request information 
on (for example) 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 and Renewal for Delegated 
Authority Information Requests and/or the ALP/PCLP Renewal Guide and 
Information Request.

III. Microloan Intermediary Reviews

    For Microloan Program Intermediary oversight, SBA District Offices 
perform an annual site visit for active Intermediaries. SBA requests 
information, for example, on SBA program management and operations 
including organizational chart with responsibilities, contact 
information, Promissory notes, and credit policies and procedures. 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.

IV. 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,\8\ 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 
conduct reviews of higher risk lenders that utilize Lender Service 
Providers or Loan Agents requesting information for example on fees, 
service agreements, and activities performed. 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.
---------------------------------------------------------------------------

    \8\ 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.
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.
    OMB Control No.: 3245-0365.
    Title: SBA Lender and Microloan Intermediary Reporting 
Requirements.
    Description of Respondents: 7(a) Lenders (including SBA Supervised 
Lenders), Certified Development Companies, and Microloan 
Intermediaries.
    Estimated Number of Respondents: 1,985.
    Estimated Annual Responses: 2,083.
    Estimated Annual Hour Burden: 17,279.

Curtis B. Rich,
Agency Clearance Officer.
[FR Doc. 2022-13597 Filed 6-24-22; 8:45 am]
BILLING CODE 8026-09-P