regulation

Bureau of Indian Affairs, Interior

§ 103.12

(2) Capable of evaluating and servicing loans in accordance with reasonable and prudent industry standards;
and
(3) Otherwise reasonably acceptable
to BIA.
(b) The following lenders are not
qualified to issue loans under the Program:
(1) An agency or instrumentality of
the Federal Government;
(2) A lender that borrows money from
any Federal Government source, other
than the Federal Reserve Bank System, for purposes of relending;
(3) A lender that does not include the
interest on loans it makes in gross income, for purposes of chapter 1, title 26
of the United States Code; and
(4) A lender that does not keep any
ownership interest in loans it originates.
§ 103.11 How does BIA approve lenders
for the Program?
(a) BIA approves each lender by entering into a loan guaranty agreement
and/or a loan insurance agreement with
it. BIA may provide up to three different levels of approval for a lender
making guaranteed loans, depending on
factors such as:
(1) The number of loans the lender
makes under the Program;
(2) The total principal balance of the
lender’s Program loans;
(3) The number of years the lender
has been involved with the Program;
(4) The relative benefits and opportunities the lender has given to Indian
business efforts through the Program;
and
(5) The lender’s historical compliance
with Program requirements.
(b) BIA will consider a lender’s loan
guaranty agreement and/or loan insurance agreement suspended as of:
(1) The effective date of a change in
the lender’s corporate structure;
(2) The effective date of a merger between the lender and any other entity,
when the lender is not the surviving
entity; or
(3) The start of any legal proceeding
in which substantially all of the lender’s assets may be subject to disposition through laws governing bankruptcy, insolvency, or receivership.

(c) A change in a lender’s name, without any other change specified under
paragraph (b) of this section, will not
cause a suspension of the lender’s loan
guaranty agreement and/or loan insurance agreement. The lender should notify BIA of its name change as soon as
possible.
(d) If a lender’s loan guaranty agreement and/or loan insurance agreement
is suspended under paragraph (b) of
this section, the lender, or its successor in interest, must enter into a
new loan guaranty agreement and/or
loan insurance agreement with BIA in
order to secure any new BIA loan guarantees or insurance coverage.
(e) The suspension of a loan guaranty
agreement and/or loan insurance agreement does not affect the validity of
any guaranty certificate or insurance
coverage in effect before the date of
the suspension. Any such certificate or
insurance coverage will remain governed by applicable terms of the suspended loan guaranty agreement and/or
loan insurance agreement.
§ 103.12 How does a lender apply for a
loan guaranty?
To apply for a loan guaranty, a BIAapproved lender must submit to BIA a
loan guaranty application request
form, together with each of the following:
(a) A written explanation from the
lender indicating why it needs a BIA
guaranty for the loan, and the minimum loan guarantee percentage it
will accept;
(b) A copy of the borrower’s complete
loan application;
(c) A description of the borrower’s equity in the business being financed;
(d) A copy of the lender’s independent
credit analysis of the borrower’s business, repayment ability, and loan collateral (including insurance);
(e) An original report from a nationally-recognized credit bureau, dated
within 90 days of the date of the lender’s loan guaranty application package,
outlining the credit history of the borrower, and to the extent permitted by
law, each co-maker or guarantor of the
loan (if any);
(f) A copy of the lender’s loan commitment letter to the borrower, showing at a minimum the proposed loan

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