FedGovContracts.com

Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: January 10, 2000

FROM: Barry McVay, CPCM

SUBJECT: Small Business Administration; Liquidation of Collateral and Sale of Disaster Assistance Loans

SOURCE: Federal Register, January 10, 2000, Vol. 65, No. 6, page 1349

AGENCIES: Small Business Administration (SBA)

ACTION: Proposed Rule

SYNOPSIS: SBA is proposing to amend its regulations regarding the liquidation and sale of Disaster Assistance Loans to comply with a governmentwide Office of Management and Budget (OMB) initiative which directs federal credit agencies to sell their loan portfolios. This follows the August 13, 1999, amendment of SBA's regulations to permit the sale of direct and purchased loans made under the authorities of the 7(a) and 501, 502, 503, and 504 programs.

EDITOR'S NOTE: The SBA's regulations are in Title 13 of the Code of Federal Regulations. The SBA regulations that would be affected by this final rule are under "Chapter 1, Small Business Administration," "Part 120, Business Loans," "Subpart E. Loan Administration," "Liquidation of Collateral," then "Section 120.540, What are SBA's policies concerning liquidation of collateral?" (Section 120.540 would be retitled "What are SBA's policies concerning the liquidation of collateral and the sale of business loans and physical disaster assistance loans, physical disaster business loans and economic injury disaster loans?").

DATES: Submit comments on or before February 9, 2000.

ADDRESS: Send comments to Arnold S. Rosenthal, Assistant Administrator for Portfolio Management, Small Business Administration, 409 Third Street, SW, Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Richard Blewett, 202-205-4202.

SUPPLEMENTAL INFORMATION: Section 120.540 of SBA's regulations establishes SBA's policy for the liquidation of collateral and the sale of commercial loans. To comply with OMB's direction to sell loan portfolios, and in accordance with the statutory authority provided by the Debt Collection Improvement Act of 1996 (Public Law 104-134) and the Small Business Act, SBA amended Section 120.540 on August 13, 1999, to established an asset sales program to sell portions of its direct and participation loan portfolios that were made under the authorities of the 7(a) and 501, 502, 503, and 504 programs. Now, SBA is proposing to further expand Section 120.540 to include the sale of Disaster Assistance Loans in asset sales.

Paragraph (b) of Section 120.540, What are SBA's policies concerning liquidation of collateral?, addresses the actions SBA may take in the sale and conversion of loans. The August 13, 1999, final rule added the following as paragraph (b)(4) of Section 120.540: "Sell direct and purchased 7(a) and 501, 502, 503 and 504 loans in asset sales. SBA will offer these loans for sale to qualified bidders by means of competitive procedures at publicly advertised sales. Bidder qualifications will be set for each sale in accordance with the terms and conditions of each sale." This proposed rule would revise the title of Section 120.540 to "What are SBA's policies concerning the liquidation of collateral and the sale of business loans and physical disaster assistance loans, physical disaster business loans and economic injury disaster loans?", and would revise the first sentence of paragraph (b)(4) to read: "Sell direct and purchased 7(a) and 501, 502, 503 and 504 loans and physical disaster home loans, physical disaster business loans and economic injury disaster loans in asset sales."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

Return to the Dispatches Library.

Return to the Main Page.