SBA Finalizes Rule to Increase Oversight of 7(a) Loan Program

The Small Business Administration has issued a final rule implementing American Bankers Association-supported legislation to strengthen the agency’s oversight of its loan programs and increase its maximum lending authority.

The final rule strengthens and clarifies the SBA’s Office of Credit Risk Management’s role in performing formal and informal enforcement actions; enhances the SBA’s lender oversight review process; and clarifies factors that must be considered under the “credit elsewhere” test that lenders perform before applying for 7(a) financing.

Based on comments, the final rule included clear time frames for reports due back to 7(a) lenders from SBA. The rule also includes several technical and clarifying corrections.