Public Law 111–5 111th Congress An Act - US Department of ...

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123 STAT. 160 PUBLIC LAW 111–5—FEB. 17, 2009
Regulations.
(A) ORGANIZATION.—
(i) The Administrator shall establish within the
SBA an office to provide loans to Systemically Important
Secondary Market Broker-dealers to be used for
the purpose of financing the inventory of the government
guaranteed portion of loans, originated, underwritten,
and closed under the Small Business Act or
pools of such loans.
(ii) The Administrator shall appoint a Director of
the Authority who shall report to the Administrator.
(iii) The Administrator is authorized to hire such
personnel as are necessary to operate the Authority.
(iv) The Administrator may contract such
Authority operations as he determines necessary to
qualified third-party companies or individuals.
(v) The Administrator is authorized to contract
with private sector fiduciary and custodial agents as
necessary to operate the Authority.
(B) LOANS.—
(i) The Administrator shall establish by rule a
process under which Systemically Important SBA Secondary
Market Broker-Dealers designated under paragraph
(1) may apply to the Administrator for loans
under this section.
(ii) The rule under clause (i) shall provide a process
for the Administrator to consider and make decisions
regarding whether or not to extend a loan applied
for under this section. Such rule shall include provisions
to assure each of the following:
(I) That loans made under this section are
for the sole purpose of financing the inventory
of the govern ment guaranteed portion of loans,
originated, underwritten, and closed under the
Small Business Act or pools of such loans.
(II) That loans made under this section are
fully collateralized to the satisfaction of the
Administrator.
(III) That there is no limit to the frequency
in which a borrower may borrow under this section
unless the Administrator determines that doing
so would create an undue risk of loss to the agency
or the United States.
(IV) That there is no limit on the size of a
loan, subject to the discretion of the Administrator.
(iii) Interest on loans under this section shall not
exceed the Federal Funds target rate as established
by the Federal Reserve Board of Governors plus 25
basis points.
(iv) The rule under this section shall provide for
such loan documents, legal covenants, collateral
requirements and other required documentation as necessary
to protect the interests of the agency, the United
States, and the taxpayer.
(v) The Administrator shall establish custodial
accounts to safeguard any collateral pledged to the
SBA in connection with a loan under this section.
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