Sba sop 51 00 On-Site Lender Reviews/Examinations Office of Lender Oversight
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- 2. Definitions for Risk-Based Lender Reviews and Examinations
Chapter 2Risk-Based Lender Reviews and Examinations1. OverviewThis SOP governs the on-site lender review and examination process to be conducted as part of a comprehensive program of lender oversight. This process applies to all SBA Lenders, with adjustments made as necessary to recognize unique program and sub-program requirements. This chapter of the SOP describes the general approach and process applicable to both SBA Lender and SBA Supervised Lender risk-based reviews and examinations. Subsequent chapters of this SOP address specific requirements for 7(a) Lender reviews, SBLC and NFRL examinations, and CDC reviews, respectively. The risk-based review/examination process allocates on-site review resources to those SBA Lenders with higher risk characteristics in terms of credit risk, portfolio performance, SBA exposure and/or compliance. The risk-based review assesses an SBA Lender’s SBA lending operations, taking into consideration: (i) portfolio performance; (ii) SBA management and operations; (iii) credit administration practices for both performing and non-performing loans; and (iv) compliance with SBA requirements. Safety and soundness examinations assess an SBLC’s and a NFRL’s: (i) capital adequacy (as allowed by statute); (ii) asset quality; (iii) management; (iv) earnings; (v); liquidity; and (vi) compliance with SBA requirements. Depending upon an SBA Lender’s performance in the identified components, a review/examination may concentrate more heavily in those specific components where more potential risk is identified. All SBA Lenders must employ prudent lending policies, procedures and practices, and comply with SBA rules, SBA Loan Program Requirements, policies and procedures. The established goal of the review/examination process is to make an informed assessment of the SBA Lender’s SBA lending operations and processes, including whether the SBA Lender exhibits prudent risk management. Review/examination results may have an impact on a lender’s SBA lending authority. When weaknesses are identified in a lender’s SBA lending operations, Corrective Actions to address deficiencies may be requested. Depending upon the severity of the situation, additional supervisory and enforcement actions may be considered. 2. Definitions for Risk-Based Lender Reviews and Examinationsa. For the purposes of this SOP and for all risk-based review and examination activity, the following definitions apply. 7(a) Lender. An institution that has executed a participation agreement with SBA under the guaranteed loan program. (13 CFR §120.10.) Active Purchase. A 7(a) loan that has been purchased by SBA (SBA has paid its share of the guaranty upon request by the 7(a) Lender) but has an outstanding balance. Catch-up Status. For 504 loan only, any loan where the monthly installment has been temporarily modified by agreement with CDC, as reflected in SBA’s 504LAMP database. Certified Development Company (CDC). An entity authorized by SBA to deliver 504 financing to small businesses. Current Loan Status. Any loan where the installment payment due date has not been missed by more than 29 days, as reflected in SBA’s loan accounting system database (SBA’s Management Information System (MIS) status). Corrective Action. A requirement placed upon an SBA Lender by SBA to implement, modify, alter, change or cease a component of its SBA lending activity. Deferred Loan Status. Any loan where the monthly installments have been temporarily suspended by active agreement or action by the SBA Lender, as reflected in SBA’s loan accounting system database (MIS status). Delinquent Loan Status. Any loan where the installment payment due date has been missed by 60 or more days, as reflected in SBA’s loan accounting system database (MIS status). Federal Financial Institution Regulator. The primary regulator of a Lender. This term includes the Federal Deposit Insurance Corporation, the Federal Reserve Board, Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration and the Farm Credit Administration. Finding. Any issue or characteristic identified for which SBA will require the SBA Lender to implement, modify, alter, change or cease conducting a defined action. Liquidation Loan Status. Any loan that has been determined by SBA Lender with concurrence of SBA, to require enforced collection measures, as reflected in the SBA’s loan accounting database (MIS status). Management Official. An officer, director, general partner, manager, employee, agent or other participant in the management of an SBA Supervised Lender. Material Deficiency. A loan file characteristic which calls into question the validity of part or the entire guaranty, if guaranty purchase is requested on the loan (e.g., missing collateral required by loan authorization), or which demonstrates increased financial risk to SBA in the handling of the loan e.g., failure by SBA Lender to monitor continued creditworthiness). (See SOP 50 51 2B, Chapter 13 for further guidance on materiality in guaranty purchase situations). Non-Federally Regulated Lender (NFRL). A business concern that is authorized by the Administrator to make loans under section 7(a) and is subject to regulation by a state but whose lending operations are not subject to regulation by a Federal regulatory agency (i.e., a Federal Financial Institution Regulator). Other Lender. All SBA Lenders except SBA Supervised Lenders. Past Due Loan Status. Any loan where the installment payment due date has not been missed by more than 30-59 days, as reflected in SBA’s loan accounting system database (MIS status). Purchase Pending Status. For 504 loan only, any loan that has been determined by CDC to require enforced collection measures and that SBA purchase the debenture, as reported in SBALAMP database. Risk-Based Review (Review). On-site lender assessment conducted by OLO covering (i) portfolio performance, (ii) SBA management and operations, (iii) credit administration and (iv) compliance components, and further described in Chapters 2, 3 and 5 of this SOP. Risk-Based Examination (Examination). On-site lender assessment conducted by OLO covering (i) capital, (ii) asset quality, (iii) management, (iv) earnings, (v) liquidation and (vi) compliance components, and which is further described in Chapters 2 and 4 of this SOP. Risk-based examinations are conducted on SBLCs and selected NFRLs. SBA Lender. A financial institution that participates in the 7(a) program or is a Certified Development Company that participates in the 504 program. This term includes SBA Supervised Lenders. SBA Loan Program Requirements: Requirements imposed upon Lenders or CDCs by statute, SBA Loan Program Requirements, any agreement the Lender or CDC has executed with SBA, SBA SOPs, official SBA notices and forms applicable to the 7(a) and 504 loan programs, and loan authorizations, as such requirements are issued and revised by SBA from time to time. For CDCs, this term also includes requirements imposed by Debentures, as that term is defined in §120.802. SBA Supervised Lender. Any 7(a) Lender that is either (1) an SBLC or (2) a NFRL. Small Business Lending Company (SBLC). A non-depository lending institution that is licensed and authorized by SBA to only make loans pursuant to section 7(a) of the Small Business Act and loans to Intermediaries in SBA’s Microloan Program. SBA has imposed a moratorium on licensing new SBLC’s since January 1982. Directory: sites -> default -> files files -> Answer True False 2 points Question 2 files -> Northern England’s set-jetting locations files -> Nstructions for Acquiring Excess Equipment online, through the 1033 Program files -> Occupational health and safety files -> The Black Panther Party’s Ten Point Program files -> International programs roel profile files -> Fermi Questions a guide for Teachers, Students, and Event Supervisors Lloyd Abrams, Ph. D. 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