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Proposed Rule

Business Loans and Development Company Loans; Liquidation and Litigation Procedures

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Small Business Administration (SBA).


Proposed rule; notice of reopening of the comment period.


On November 3, 2005, SBA published in the Federal Register a proposed rule which establishes procedures for Certified Development Companies (CDCs) that are eligible for, and that request, authority from SBA to handle liquidation and litigation of loans that are funded with the proceeds of debentures guaranteed by the SBA under the 504 business loan program, and rights of appeal from denied applications; provides for new liquidation and debt collection litigation procedures for authorized CDCs and for lenders participating in the 7(a) business loan program (Lenders); establishes procedures for, and restrictions on, the payment by SBA of legal fees and expenses to CDCs and Lenders; requires Lenders to complete all cost-effective debt recovery actions prior to requesting guaranty purchase by SBA; limits to 120 days the number of days of interest that SBA will pay Lenders on 7(a) loans that have gone into default; revises SBA regulations pertaining to loan servicing actions; states that for 7(a) loans approved after the effective date of the rule, a Lender's consent to SBA's sale of certain 7(a) loans after guaranty purchase is granted; and clarifies existing regulations regarding the applicability of SBA regulations and loan program requirements, and regarding SBA purchases of guaranties. The proposed rule provided a 60-day comment period closing on January 3, 2006. We are re-opening the comment period until February 24, 2006, because we have been informed that, given the time of year, the public needs more time to formulate comments.


Comments on the proposed rule published at 70 FR 66800, November 3, 2005, must be received on or before February 24, 2006.


You may submit written comments, identified by agency name and RIN 3245-AE83 for this rulemaking, by any of the following methods: Follow instructions for submitting electronic comments through the Federal eRulemaking Portal:;​ E-mail:, include RIN number in the subject line of the message; Fax: (202) 481-2381; Mail or Hand Delivery/Courier: James Hammersley, Acting Assistant Administrator, Office of Portfolio Management, Small Business Administration, 409 Third Street, SW., Washington, DC 20416.

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Dated: January 19, 2006.

Michael W. Hager,

Associate Deputy Administrator for Capital Access.

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[FR Doc. E6-881 Filed 1-24-06; 8:45 am]