Community Advantage Pilot Program, 12369-12370 [2020-03241]
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Federal Register / Vol. 85, No. 41 / Monday, March 2, 2020 / Notices
SMALL BUSINESS ADMINISTRATION
[Docket No. SBA–2020–0006]
Community Advantage Pilot Program
U.S. Small Business
Administration.
ACTION: Notice of changes to Community
Advantage Pilot Program and request for
comments.
AGENCY:
The Community Advantage
(‘‘CA’’) Pilot Program is a pilot program
to increase SBA-guaranteed loans to
small businesses in underserved areas.
The Small Business Administration
(‘‘SBA’’ or ‘‘Agency’’) continues to
refine and improve the design of the CA
Pilot Program. To support SBA’s
commitment to expanding access to
capital for small businesses and
entrepreneurs in underserved markets,
SBA is issuing this Notice to revise the
requirements for refinancing non-SBA
guaranteed, same institution debt in
certain circumstances. Further, SBA is
revising the number of loans a CA
Lender must make before it can begin
processing loans under its delegated
authority. Finally, SBA is providing
guidance on the expiration and process
for renewal of CA Lenders’ Loan
Guaranty Agreements (SBA Form
750CA).
SUMMARY:
The changes take effect March 2,
2020. The CA Pilot Program will remain
in effect until September 30, 2022.
Comment Date: Comments must be
received on or before April 1, 2020.
ADDRESSES: You may submit comments,
identified by SBA docket number SBA–
2020–0006, by any of the following
methods:
• Federal eRulemaking Portal:
https://www.regulations.gov/. Follow
the instructions for submitting
comments.
• Mail: Daniel Upham, Chief,
Microenterprise Development Division,
Office of Financial Assistance, U.S.
Small Business Administration, 409
Third Street SW, Washington, DC
20416.
• Hand Delivery/Courier: Daniel
Upham, Chief, Microenterprise
Development Division, Office of
Financial Assistance, U.S. Small
Business Administration, 409 Third
Street SW, Washington, DC 20416.
SBA will post all comments on
https://www.regulations.gov. If you wish
to submit confidential business
information (‘‘CBI’’) as defined in the
User Notice at https://
www.regulations.gov, please submit the
information to Daniel Upham, Chief,
Microenterprise Development Division,
Office of Financial Assistance, U.S.
khammond on DSKJM1Z7X2PROD with NOTICES
DATES:
VerDate Sep<11>2014
18:10 Feb 28, 2020
Jkt 250001
Small Business Administration, 409
Third Street SW, Washington, DC
20416; or send an email to
communityadvantage@sba.gov.
Highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination as to whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT:
Daniel Upham, Chief, Microenterprise
Development Division, Office of
Financial Assistance, U.S. Small
Business Administration, 409 Third
Street SW, Washington, DC 20416, (202)
205–7001, daniel.upham@sba.gov.
SUPPLEMENTARY INFORMATION:
1. Background
As part of its efforts to increase the
number of SBA-guaranteed 7(a) loans
made to small businesses in
underserved markets, on February 18,
2011, SBA issued a notice and request
for comments introducing the CA Pilot
Program (76 FR 9626). That notice
provided an overview of the CA Pilot
Program requirements and, pursuant to
the authority provided to SBA under 13
CFR 120.3 to suspend, modify or waive
certain regulations in establishing and
testing pilot loan initiatives, SBA
modified or waived as appropriate
certain regulations which otherwise
apply to 7(a) loans for the CA Pilot
Program.
Subsequent notices have made
changes to the CA Pilot Program to
improve the program experience for
participants, improve their ability to
deliver capital to underserved markets,
and appropriately manage risk to the
Agency. These notices were issued on
the following dates: September 12, 2011
(76 FR 56262), February 8, 2012 (77 FR
6619), November 9, 2012 (77 FR 67433),
December 28, 2015 (80 FR 80872), and
September 12, 2018 (83 FR 46237). In
the notice published September 12,
2018 (the ‘‘September 2018 Notice’’),
SBA extended the pilot program to
September 30, 2022, placed a
moratorium on the acceptance of
applications for new Community
Advantage Lenders (‘‘CA Lenders’’),
modified the requirements for
refinancing non-SBA guaranteed, same
institution debt, and revised other
program requirements. SBA is issuing
this Notice to further revise program
requirements as described more fully
below.
2. Comments
Although the changes are effective
March 2, 2020, comments are solicited
PO 00000
Frm 00120
Fmt 4703
Sfmt 4703
12369
from interested members of the public
on all aspects of the CA Pilot Program.
Comments must be submitted on or
before the deadline for comments listed
in the DATES section. SBA will consider
these comments and the need for
making any revisions as a result of these
comments.
3. Changes to the Community
Advantage Pilot Program
(a) Non-SBA Guaranteed, Same
Institution Debt Refinancing
Requirements
Based on comments received in
response to the September 2018 Notice,
SBA is modifying the requirements for
refinancing non-SBA guaranteed, same
institution debt. SBA has learned that
the applicants for refinancing are often
small businesses that, for one reason or
another, have obtained financing with
terms that are onerous and
unsustainable for the applicant, such as
loans with high compound interest
rates, draw fees, late fees, and/or
substantial prepayment penalties. When
a CA Lender receives such an
application for refinancing, the CA
Lender may opt to make an interim,
non-SBA guaranteed loan to
immediately restructure the financing
on more reasonable terms, in
anticipation of providing a permanent
solution. SBA recognizes the
importance of improving cash flow to a
small business as soon as possible with
a loan on more reasonable terms, and of
providing a small business applicant
with the additional time and technical
assistance it may need to complete a
successful SBA-guaranteed loan
application. Therefore, SBA is
modifying the restrictions on
refinancing non-SBA guaranteed, same
institution debt to permit the CA Lender
to pay off certain interim loans with an
SBA-guaranteed CA loan when
beneficial to the small business
applicant under certain circumstances.
(It is important to note, however, that
extension of an interim loan by a CA
Lender is made entirely at the CA
Lender’s risk as there is no assurance
that the interim loan will be eligible to
be refinanced with a CA loan.)
In order to refinance its own interim,
non-SBA guaranteed same institution
loan with a CA loan, the CA Lender
must comply with all of the following:
i. The sole purpose of the interim loan
must have been to refinance debt that
was on onerous terms (e.g., the
refinancing will improve the
Applicant’s cash flow by at least 15%),
including necessary out-of-pocket costs.
ii. The Annual Percentage Rate
(‘‘APR’’) on the interim loan must not
E:\FR\FM\02MRN1.SGM
02MRN1
12370
Federal Register / Vol. 85, No. 41 / Monday, March 2, 2020 / Notices
exceed the maximum interest rate
allowable under the CA Pilot Program.
iii. The interim loan must not have
been made more than 6 months prior to
the submission in E–TRAN of the SBAguaranteed CA loan application.
iv. The CA Lender must provide a
transcript showing the due dates and
when payments were received for the
entire term of the interim loan. If there
are any late payments and/or late
charges on the interim loan, the CA
Lender must explain in its credit
memorandum the late payments and
late charges and substantiate how the
CA Lender has determined that SBA
will not be in a position to sustain a loss
from refinancing the interim loan.
v. The CA Lender may not charge any
fees on the interim loan except for
necessary out-of-pocket costs associated
with closing the loan, such as filing or
recording fees. There must be no
prepayment penalty or other charge for
prepayment of the interim loan.
vi. The CA loan that refinances the
interim loan must be submitted to SBA
for non-delegated processing and may
not be approved under a CA Lender’s
delegated authority.
vii. The CA Lender must address in
its credit memorandum how the original
debt meets the requirements set forth in
SOP 50 10 for debt refinancing
(currently, Subpart B, Chapter 2,
Paragraph V.E.).
khammond on DSKJM1Z7X2PROD with NOTICES
(b) Delegated Authority
Currently, a CA Lender that is
determined to be eligible for delegated
authority may not process loans using
its delegated authority until (i) it closes
and makes an initial disbursement on at
least seven non-delegated CA loans, and
(ii) the Office of Credit Risk
Management (‘‘OCRM’’) determines, in
consultation with the Loan Guaranty
Processing Center (‘‘LGPC’’), that it has
satisfactory knowledge of SBA Loan
Program Requirements. SBA is
increasing the number of CA loans that
must be initially disbursed before a CA
Lender may receive approval to process
applications under delegated authority.
Effective March 2, 2020, the number of
loans is increased to ten.
(c) Loan Guaranty Agreement (SBA
Form 750CA) Expiration and Renewal
On September 12, 2018, SBA
extended the Community Advantage
Pilot Program from March 31, 2020, to
September 30, 2022. Currently, most CA
Lenders have a Loan Guaranty
Agreement (SBA Form 750CA) that
expires on March 31, 2020. As set forth
in the CA Participant Guide, OCRM will
conduct a review of each CA Lender
prior to March 31, 2020. The review will
VerDate Sep<11>2014
18:10 Feb 28, 2020
Jkt 250001
include, but not be limited to, an
assessment of the CA Lender’s
compliance with SBA Loan Program
Requirements, including the
requirement to make 60 percent of its
loans to small businesses in the CA
underserved markets, satisfactory SBA
performance as determined by SBA in
its discretion, and other risk-related
criteria. Based on the results of a CA
Lender’s review, OCRM may: (1) Renew
the CA Lender’s SBA Form 750CA until
the expiration date of the pilot program
(September 30, 2022); (2) renew the CA
Lender’s SBA Form 750CA for a shorter
period; or (3) not renew the CA Lender’s
SBA Form 750CA beyond March 31,
2020. In the latter two cases, OCRM will
provide an explanation for the
shortened renewal or non-renewal, as
appropriate.
(d) Limited Moratorium Exception
As stated in the September 2018
Notice, SBA believes there are a
sufficient number of CA Lenders for
SBA to perform a proper evaluation of
the pilot program. In order to maintain
a sufficient number of CA Lenders, SBA
will accept new applications from
qualified eligible entities to replace CA
Lenders that voluntarily withdraw from
the program, are not renewed, or are
otherwise removed from the pilot
program. SBA will provide further
information on this process after March
31, 2020, when it expects to know the
number of CA Lenders that will not be
continuing in the pilot program. In
accordance with the September 2018
Notice, SBA is not increasing the total
number of CA Lenders.
4. General Information
The changes in this Notice are limited
to the CA Pilot Program only. All other
SBA Loan Program Requirements and
regulatory waivers or modifications
related to the CA Pilot Program remain
unchanged.
SBA has provided more detailed
guidance in the form of a Participant
Guide, which will be updated to reflect
these changes and will be available on
SBA’s website at https://www.sba.gov.
SBA may provide additional guidance,
through SBA notices, which may also be
published on SBA’s website at https://
www.sba.gov/category/lendernavigation/forms-notices-sops/notices.
Questions regarding the CA Pilot
Program may be directed to the Lender
Relations Specialist in the local SBA
district office. The local SBA district
office may be found at https://
www.sba.gov/about-offices-list/2.
Authority: 15 U.S.C. 636(a)(25) and 13 CFR
120.3.
PO 00000
Frm 00121
Fmt 4703
Sfmt 4703
Dated: February 11, 2020.
Jovita Carranza,
Administrator.
[FR Doc. 2020–03241 Filed 2–28–20; 8:45 am]
BILLING CODE P
SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA–2020–0005]
Notice Announcing Addresses for
Service of Process
Social Security Administration.
Notice announcing addresses for
summons and complaints.
AGENCY:
ACTION:
Our Office of the General
Counsel (OGC) is responsible for
processing and handling summonses
and complaints in lawsuits involving
judicial review of our final decisions on
individual claims for benefits under
titles II, VIII, and XVI of the Social
Security Act (Act), and individual
claims for a Medicare Part D subsidy
under title XVIII of the Act. This notice
sets out the names and current
addresses of those offices and the
jurisdictions for which each office has
responsibility.
FOR FURTHER INFORMATION CONTACT:
Michael Haar, Office of the General
Counsel, Office of Program Law, Social
Security Administration, 6401 Security
Boulevard, Baltimore, MD 21235–6404,
(410) 965–2521. For information on
eligibility or filing for benefits, call our
national toll-free number, 1–800–772–
1213 or TTY 1–800–325–0778, or visit
our internet site, Social Security Online,
at https://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION: You
should mail summonses and complaints
in cases involving judicial review of our
final decisions on individual claims for
benefits under titles II, VIII, and XVI of
the Act and individual claims for a
Medicare Part D subsidy under title
XVIII of the Act directly to the OGC
location responsible for the jurisdiction
in which the complaint has been filed.
This notice replaces the notice we
published on October 28, 2019 (84 FR
57799), and reflects the jurisdictional
assignments for our Regional Chief
Counsels’ Offices and our Office of
Program Law for cases filed on or after
January 1, 2020. The changes in this
notice from our 2019 notice reflect that
the Office of the Regional Chief Counsel,
Region I will assume responsibility for
the District of Vermont and the
Northern District of New York, and the
Office of the Regional Chief Counsel,
Region VII will assume responsibility
for the District of Connecticut and the
Eastern District of New York. The
SUMMARY:
E:\FR\FM\02MRN1.SGM
02MRN1
]]>Agencies
[Federal Register Volume 85, Number 41 (Monday, March 2, 2020)]
[Notices]
[Pages 12369-12370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03241]
[[Page 12369]]
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SMALL BUSINESS ADMINISTRATION
[Docket No. SBA-2020-0006]
Community Advantage Pilot Program
AGENCY: U.S. Small Business Administration.
ACTION: Notice of changes to Community Advantage Pilot Program and
request for comments.
-----------------------------------------------------------------------
SUMMARY: The Community Advantage (``CA'') Pilot Program is a pilot
program to increase SBA-guaranteed loans to small businesses in
underserved areas. The Small Business Administration (``SBA'' or
``Agency'') continues to refine and improve the design of the CA Pilot
Program. To support SBA's commitment to expanding access to capital for
small businesses and entrepreneurs in underserved markets, SBA is
issuing this Notice to revise the requirements for refinancing non-SBA
guaranteed, same institution debt in certain circumstances. Further,
SBA is revising the number of loans a CA Lender must make before it can
begin processing loans under its delegated authority. Finally, SBA is
providing guidance on the expiration and process for renewal of CA
Lenders' Loan Guaranty Agreements (SBA Form 750CA).
DATES: The changes take effect March 2, 2020. The CA Pilot Program will
remain in effect until September 30, 2022.
Comment Date: Comments must be received on or before April 1, 2020.
ADDRESSES: You may submit comments, identified by SBA docket number
SBA-2020-0006, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov/.
Follow the instructions for submitting comments.
Mail: Daniel Upham, Chief, Microenterprise Development
Division, Office of Financial Assistance, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416.
Hand Delivery/Courier: Daniel Upham, Chief,
Microenterprise Development Division, Office of Financial Assistance,
U.S. Small Business Administration, 409 Third Street SW, Washington, DC
20416.
SBA will post all comments on https://www.regulations.gov. If you
wish to submit confidential business information (``CBI'') as defined
in the User Notice at https://www.regulations.gov, please submit the
information to Daniel Upham, Chief, Microenterprise Development
Division, Office of Financial Assistance, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416; or send an
email to [email protected]. Highlight the information that you
consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review the information and make
the final determination as to whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Daniel Upham, Chief, Microenterprise
Development Division, Office of Financial Assistance, U.S. Small
Business Administration, 409 Third Street SW, Washington, DC 20416,
(202) 205-7001, [email protected].
SUPPLEMENTARY INFORMATION:
1. Background
As part of its efforts to increase the number of SBA-guaranteed
7(a) loans made to small businesses in underserved markets, on February
18, 2011, SBA issued a notice and request for comments introducing the
CA Pilot Program (76 FR 9626). That notice provided an overview of the
CA Pilot Program requirements and, pursuant to the authority provided
to SBA under 13 CFR 120.3 to suspend, modify or waive certain
regulations in establishing and testing pilot loan initiatives, SBA
modified or waived as appropriate certain regulations which otherwise
apply to 7(a) loans for the CA Pilot Program.
Subsequent notices have made changes to the CA Pilot Program to
improve the program experience for participants, improve their ability
to deliver capital to underserved markets, and appropriately manage
risk to the Agency. These notices were issued on the following dates:
September 12, 2011 (76 FR 56262), February 8, 2012 (77 FR 6619),
November 9, 2012 (77 FR 67433), December 28, 2015 (80 FR 80872), and
September 12, 2018 (83 FR 46237). In the notice published September 12,
2018 (the ``September 2018 Notice''), SBA extended the pilot program to
September 30, 2022, placed a moratorium on the acceptance of
applications for new Community Advantage Lenders (``CA Lenders''),
modified the requirements for refinancing non-SBA guaranteed, same
institution debt, and revised other program requirements. SBA is
issuing this Notice to further revise program requirements as described
more fully below.
2. Comments
Although the changes are effective March 2, 2020, comments are
solicited from interested members of the public on all aspects of the
CA Pilot Program. Comments must be submitted on or before the deadline
for comments listed in the DATES section. SBA will consider these
comments and the need for making any revisions as a result of these
comments.
3. Changes to the Community Advantage Pilot Program
(a) Non-SBA Guaranteed, Same Institution Debt Refinancing Requirements
Based on comments received in response to the September 2018
Notice, SBA is modifying the requirements for refinancing non-SBA
guaranteed, same institution debt. SBA has learned that the applicants
for refinancing are often small businesses that, for one reason or
another, have obtained financing with terms that are onerous and
unsustainable for the applicant, such as loans with high compound
interest rates, draw fees, late fees, and/or substantial prepayment
penalties. When a CA Lender receives such an application for
refinancing, the CA Lender may opt to make an interim, non-SBA
guaranteed loan to immediately restructure the financing on more
reasonable terms, in anticipation of providing a permanent solution.
SBA recognizes the importance of improving cash flow to a small
business as soon as possible with a loan on more reasonable terms, and
of providing a small business applicant with the additional time and
technical assistance it may need to complete a successful SBA-
guaranteed loan application. Therefore, SBA is modifying the
restrictions on refinancing non-SBA guaranteed, same institution debt
to permit the CA Lender to pay off certain interim loans with an SBA-
guaranteed CA loan when beneficial to the small business applicant
under certain circumstances. (It is important to note, however, that
extension of an interim loan by a CA Lender is made entirely at the CA
Lender's risk as there is no assurance that the interim loan will be
eligible to be refinanced with a CA loan.)
In order to refinance its own interim, non-SBA guaranteed same
institution loan with a CA loan, the CA Lender must comply with all of
the following:
i. The sole purpose of the interim loan must have been to refinance
debt that was on onerous terms (e.g., the refinancing will improve the
Applicant's cash flow by at least 15%), including necessary out-of-
pocket costs.
ii. The Annual Percentage Rate (``APR'') on the interim loan must
not
[[Page 12370]]
exceed the maximum interest rate allowable under the CA Pilot Program.
iii. The interim loan must not have been made more than 6 months
prior to the submission in E-TRAN of the SBA-guaranteed CA loan
application.
iv. The CA Lender must provide a transcript showing the due dates
and when payments were received for the entire term of the interim
loan. If there are any late payments and/or late charges on the interim
loan, the CA Lender must explain in its credit memorandum the late
payments and late charges and substantiate how the CA Lender has
determined that SBA will not be in a position to sustain a loss from
refinancing the interim loan.
v. The CA Lender may not charge any fees on the interim loan except
for necessary out-of-pocket costs associated with closing the loan,
such as filing or recording fees. There must be no prepayment penalty
or other charge for prepayment of the interim loan.
vi. The CA loan that refinances the interim loan must be submitted
to SBA for non-delegated processing and may not be approved under a CA
Lender's delegated authority.
vii. The CA Lender must address in its credit memorandum how the
original debt meets the requirements set forth in SOP 50 10 for debt
refinancing (currently, Subpart B, Chapter 2, Paragraph V.E.).
(b) Delegated Authority
Currently, a CA Lender that is determined to be eligible for
delegated authority may not process loans using its delegated authority
until (i) it closes and makes an initial disbursement on at least seven
non-delegated CA loans, and (ii) the Office of Credit Risk Management
(``OCRM'') determines, in consultation with the Loan Guaranty
Processing Center (``LGPC''), that it has satisfactory knowledge of SBA
Loan Program Requirements. SBA is increasing the number of CA loans
that must be initially disbursed before a CA Lender may receive
approval to process applications under delegated authority. Effective
March 2, 2020, the number of loans is increased to ten.
(c) Loan Guaranty Agreement (SBA Form 750CA) Expiration and Renewal
On September 12, 2018, SBA extended the Community Advantage Pilot
Program from March 31, 2020, to September 30, 2022. Currently, most CA
Lenders have a Loan Guaranty Agreement (SBA Form 750CA) that expires on
March 31, 2020. As set forth in the CA Participant Guide, OCRM will
conduct a review of each CA Lender prior to March 31, 2020. The review
will include, but not be limited to, an assessment of the CA Lender's
compliance with SBA Loan Program Requirements, including the
requirement to make 60 percent of its loans to small businesses in the
CA underserved markets, satisfactory SBA performance as determined by
SBA in its discretion, and other risk-related criteria. Based on the
results of a CA Lender's review, OCRM may: (1) Renew the CA Lender's
SBA Form 750CA until the expiration date of the pilot program
(September 30, 2022); (2) renew the CA Lender's SBA Form 750CA for a
shorter period; or (3) not renew the CA Lender's SBA Form 750CA beyond
March 31, 2020. In the latter two cases, OCRM will provide an
explanation for the shortened renewal or non-renewal, as appropriate.
(d) Limited Moratorium Exception
As stated in the September 2018 Notice, SBA believes there are a
sufficient number of CA Lenders for SBA to perform a proper evaluation
of the pilot program. In order to maintain a sufficient number of CA
Lenders, SBA will accept new applications from qualified eligible
entities to replace CA Lenders that voluntarily withdraw from the
program, are not renewed, or are otherwise removed from the pilot
program. SBA will provide further information on this process after
March 31, 2020, when it expects to know the number of CA Lenders that
will not be continuing in the pilot program. In accordance with the
September 2018 Notice, SBA is not increasing the total number of CA
Lenders.
4. General Information
The changes in this Notice are limited to the CA Pilot Program
only. All other SBA Loan Program Requirements and regulatory waivers or
modifications related to the CA Pilot Program remain unchanged.
SBA has provided more detailed guidance in the form of a
Participant Guide, which will be updated to reflect these changes and
will be available on SBA's website at https://www.sba.gov. SBA may
provide additional guidance, through SBA notices, which may also be
published on SBA's website at https://www.sba.gov/category/lender-navigation/forms-notices-sops/notices. Questions regarding the CA Pilot
Program may be directed to the Lender Relations Specialist in the local
SBA district office. The local SBA district office may be found at
https://www.sba.gov/about-offices-list/2.
Authority: 15 U.S.C. 636(a)(25) and 13 CFR 120.3.
Dated: February 11, 2020.
Jovita Carranza,
Administrator.
[FR Doc. 2020-03241 Filed 2-28-20; 8:45 am]
BILLING CODE P
