[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]
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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 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.
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\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.
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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.
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\2\ 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 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.
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\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.
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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 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.
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\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.
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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.
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\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).
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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 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.
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\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.
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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.
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\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.
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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.
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