912 Regulations

Pertinent Statutes, Regulations and other Guidance in effect on February 12, 2013:

15 U.S.C. § 636(a)(1)(B)

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(B) Background checks

Prior to the approval of any loan made pursuant to this subsection, or section 697 of this title, the Administrator may verify the applicant's criminal background, or lack thereof, through the best available means, including, if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation.

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15 U.S.C. § 634(b)(11)

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(b) Powers of Administrator

In the performance of, and with respect to, the functions, powers, and duties vested in him by this chapter the Administrator may—

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(11) make such investigations as he deems necessary to determine whether a recipient of or participant in any assistance under this chapter or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this chapter, or of any rule or regulation under this chapter, or of any order issued under this chapter. The Administration shall permit any person to file with it a statement in writing, under oath or otherwise as the Administration shall determine, as to all the facts and circumstances concerning the matter to be investigated. For the purpose of any investigation, the Administration is empowered to administer oaths and affirmations, subpena [sic] witnesses, compel their attendance, take evidence, and require the production of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpena issued to, any person, including a recipient or participant, the Administration may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, and documents; and such court may issue an order requiring such person to appear before the Administration, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found;

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15 U.S.C. § 687b(a)

(a) Investigation of violations

The Administration may make such investigations as it deems necessary to determine whether a licensee or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this chapter, or of any rule or regulation under this chapter, or of any order issued under this chapter. The Administration shall permit any person to file with it a statement in writing, under oath or otherwise as the Administration shall determine, as to all the facts and circumstances concerning the matter to be investigated. For the purpose of any investigation, the Administration is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpena issued to, any person, including a licensee, the Administration may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, and documents; and such court may issue an order requiring such person to appear before the Administration, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found.

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13 C.F.R. § 115.18(c) (Surety Bond Program)

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(c) Notification requirement. The Prior Approval or PSB Surety must promptly notify SBA of the occurrence of any event in paragraphs (b) (1) through (5) of this section, or if any of the Persons described in paragraph (b) of this section does not, or ceases to, qualify as a Surety. SBA may require submission of a Statement of Personal History (SBA Form 912) from any of these Persons.

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13 C.F.R. § 120.110(n) (Guaranteed Lending Program)

The following types of businesses are ineligible:

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(n) Businesses with an Associate who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude;

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13 C.F.R. § 120.150(a) (Guaranteed Lending Program)

The applicant (including an Operating Company) must be creditworthy. Loans must be so sound as to reasonably assure repayment. SBA will consider:

(a) Character, reputation, and credit history of the applicant (and the Operating Company, if applicable), its Associates, and guarantors;
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13 C.F.R. § 124.203 (Section 8(a) Business Development Program)

Each 8(a) BD applicant concern must submit those forms and attachments required by SBA when applying for admission to the 8(a) BD program. These forms and attachments may include, but not be limited to, financial statements, copies of signed Federal personal and business tax returns, individual and business bank statements, and personal history statements. An applicant must also submit a signed IRS Form 4506T, Request for Copy or Transcript of Tax Form, to SBA. In all cases, the applicant must provide a wet signature from each individual claiming social and economic disadvantage status.

SBA Standard Operating Procedures (SOP) 50 10 5(D) Chapter 2(III)(D)(3)(n)(4) (Guaranteed Lending Program, referencing 13 C.F.R. 120.110(n))

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(4) To determine eligibility under this section, the Agency requires that every proprietor, general partner, officer, director, managing member of a limited liability company (LLC), owner of 20% or more of the equity of the Applicant, Trustor (if the Small Business Applicant is owned by a trust), and any person hired by the Applicant to manage day-to-day operations (―Subject Individual) must be of good character. The completion of an SBA Form 912, Statement of Personal History (―912), by each Subject Individual is required as part of the character evaluation process and the form must be completed within 90 days of submission of the application to SBA. Every person completing a 912 must answer each question fully giving details about any ―yes response. NOTE: A ―yes is required even when the applicant believes the record is sealed, expunged or otherwise unavailable. (This information must be kept private and confidential.) There are no exceptions to or waivers of this policy.

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SOP 50 45, Chapter 4(3)(a)(1) (Surety Bond Program)

3. What Factors Determine “Good Character” of the Contractor?

To be eligible for SBG assistance, the contractor must possess good character and reputation.

a. Determination of Character

(1) Presence of Good Character

A contractor possesses good character and reputation if each owner of 20 percent or more of its equity, and each of its officers, directors, or general partners possesses good character and reputation. This includes managers that have authority to speak for or commit the company. In applying for SBG assistance, each such owner, officer, director, or manager must complete an SBA Form 912, “Statement of Personal History” (Appendix 6). Processing instructions are found in Chapter 6, “SBG Application Procedures.”

SOP 80 05 3, Chapter 2A(12)(c) (Section 8(a) Business Development Program)

c. SBA Form 912, "Statement of Personal History." Each individual upon whom eligibility is based, each proprietor, each partner, each management member, each officer, each director, each owner of more than 10 percent of the stock in the applicant concern, and any other person, including a hired manager, who has authority to speak for and commit the concern in the management of the business, must complete this form. If there are reasons to question the participation of any Advisory Board members or Executive Committee members, SBA may also require those individuals to complete an SBA Form 912.

SOP 50 30 6, at Paragraph 74 (Disaster Loan Program)

74. CHARACTER DETERMINATION: POLICY AND PROCEDURE

It is not in the public interest for SBA to extend financial assistance to persons who are

not of good character. If any adverse information develops concerning the character or

background of a disaster loan applicant, as disclosed on SBA Form 912, "Statement of

Personal History," or from any other source, you must follow the procedures specified in

this paragraph. In some cases, you must obtain ODA clearance before a loan may be

approved. The response to a specific question on the Forms 5 and 5C determines

whether an SBA Form 912 is needed. When received, we must forward all SBA Form

912s to the Office of Security Operations (OSO) in OIG.