Paperwork Reduction Act Submission
Quarterly Loan Loss Reserve Report and PCLP Guarantee
OMB Control # 3245-0346
A. Justification
With this submission, SBA is revising Form 2233, PCLP Quarterly Loan Loss Reserve Report, to clarify that the Loan Loss Reserve Fund amount must match the required amount calculated by SBA’s Loan Analysis Management System for the 504 Loan Portfolio (LAMP). Additionally, SBA is placing the CDC Certification in a separate section, requiring that the certification be signed by the CDC’s Chief Executive Officer, and requiring that the CDC certify that it is in compliance with SBA’s Loan Program Requirements and Control Agreements for the CDC’s Loan Loss Reserve Fund. SBA has also added a warning regarding penalties for false certifications. SBA believes that these changes will aid in monitoring and enforcing PCLP CDC compliance with applicable Loan Loss Reserve Fund requirements.
In addition, since the debt refinancing authority provided by the Small Business Jobs Act expired on September 30, 2012, SBA also revised Form 2234 (C) to remove references to that financing option. This revision helps to avoid public confusion as to the availability of this temporary financing vehicle.
Circumstances Necessitating the Collection of Information
Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the applicable section of each statute and regulation that mandates or authorizes the collection of information.
The PCLP program was designed to further the Agency’s transformation from the transactional oversight of individual loans to the management of loan portfolios processed by appropriate qualified lenders. The PCLP lenders – Certified Development Companies (CDCs) in this instance, are authorized to process, approve, close and service SBA 504 loans, subject to only a brief eligibility review and assignment of a loan number by SBA. This program is similar to the PLP process for obtaining a 7(a) guaranty.
SBA has a responsibility to monitor and evaluate the efficiency and effectiveness of the SBA PCLP Program consistent with Section (4)(b)(3) of the Small Business Act (15 U.S.C. § 633(b)(3)) (Risk Management Database), the Federal Managers Financial Integrity Act (FMFIA) codified at 31 U.S.C. Section 3512 et. seq., and OMB Circulars A-123 (Management’s Responsibility for Internal Control) and A-129 (Policies for Federal Credit Programs and Non-tax Receivables). This collection of information facilitates SBA’s ability to carry out this responsibility.
How, By Whom, and For What Purpose Information Will Be Used
Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.
The information collected is used by program managers, top Agency management, and government entities with oversight authority over SBA. This data is used primarily for loan monitoring, portfolio risk management, and lender oversight. The data is also used to determine how effectively SBA’s loan programs are meeting the needs of various geographical, demographical, and industry markets and segments; the safety and soundness of SBA’s loan policies and procedures; and to set program fees consistent with the subsidy rate model. SBA also uses the information to report to its various oversight authorities regarding the number, dollar volume, and demographic characteristics of its 504 loan guaranty recipients.
Technological Collection Techniques
Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce the burden.
PCLP Lenders (CDCs) submit the collected information via fax, regular mail, or E-Tran to a centralized and highly automated SBA processing center. The collection process generally works as follows:
PCLP Lender A with a high level of technological capability, extracts data from its indigenous origination systems and transfers an XML data package electronically to SBA via the Internet.
PCLP Lender B, less sophisticated but with Internet capability, enters data directly into an electronic application provided through the Internet.
PCLP Lender C, unwilling or unable to transmit electronically, continues to fax the streamlined applications to the processing center.
4. Avoidance of Duplication
Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in item 2 above.
The information collected is unique to the individual applicant and the circumstances and conditions of its business operation, so there are no other sources of the information. In developing the forms, SBA sought to minimize burdens by primarily considering for collection data that a PCLP lender already collects and maintains in its files. One of the cornerstones of the PCLP concept was for the program to fit as seamlessly as possible with lenders’ normal business practices and data collection. This reduces lender processing costs, particularly for very small loans.
5. Impact on Small Businesses or Other Small Entities
If the collection of information impacts small businesses or other small entities (Item 5 of OMB Form 83-I), describe any methods used to minimize burden.
This information collection impacts prospective small business borrowers, and PCLP lenders, some of which are small. However, in developing this information collection, SBA worked very carefully with the PCLP lenders to streamline the data collection and minimize the burden on both lenders and small business borrowers without sacrificing the usefulness of the information collected.
6. Consequences If Information Is Not Collected
Describe the consequence to the Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.
SBA is responsible for providing small business access to capital in an efficient and timely manner, while maintaining its fiduciary responsibility to the taxpayer. This information collection facilitates SBA’s ability to fulfill those responsibilities by providing the critical information needed by SBA to monitor and analyze loan and lender data trends and risks. This minimal reporting is a critical means of controlling the additional risk that SBA assumes in delegating authorities such as PCLP and expediting processing. SBA collects data to allow lenders and borrowers to modify significant loan terms as needed after the loan is approved. Such changes (e.g., loan term modifications) can significantly modify SBA’s position and increase the potential for loss. Real-time monitoring allows for early warning triggers that indicate an increase in risks, and assist the Agency to identify where its resources should be employed to mitigate risks and ultimately reduce potential loan losses.
7. Existence of Special Circumstances
Explain any special circumstances that would cause an information collection to be conducted in a manner, etc.
PCLP lenders submit loan data for SBA’s loan guarantee approval on a loan by loan basis. Because PCLP lenders want SBA to approve loans on a rolling basis, they submit this information more than once a quarter.
8. Solicitation of Public Comment
If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received. Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.
The Federal Register notice for comments was published on July 24, 2012, at 77 FR 43410. Comments were to be submitted on or before September 24, 2012. No comments were received.
9. Payments or Gifts
Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.
No gifts or payments are provided to any respondents.
10. Assurance of Confidentiality
Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.
The information collected will be protected to the extent permitted by law, including the Freedom of Information Act, 5 U.S.C. 552 and the Privacy Act 5 USC 552a. Access to the information is limited to those with a need to know [if access is password protected say so] and requires the approval of Technology Project Manager in SBA’s Office of Financial Assistance.
11. Questions of a Sensitive Nature
Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, specific uses to be made of the information, explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.
SBA collects social security numbers and information on ethnicity, race, and criminal records. The social security number is the unique identifier associating a person with a PCLP loan. SBA also uses social security numbers to facilitate critical credit searches in the federal databases listing defaulted loans, in consumer credit databases and in fraud detection systems. SBA collects demographic information to assess the extent to which SBA’s loan programs assist all demographics. We also note that SBA has a Privacy Act System of Records SBA-21, Loan System that covers this information. See attached Federal Register Notice at 74 FR 14890
(April 1, 2009) as amended by notices published at 77 FR 15835 (3/16, 2012) and 77 FR 61467 (10/9/2012).
12. Estimate of the Hourly Burden of the Collection of Information
Provide estimates of the hour burden of the collection of information, well as the hour cost burden. Indicate the number of respondents, frequency of response, annual hour and cost burden, and an explanation of how the burden was estimated.
The estimated burden for this collection of information is based on consultation with a sample of PCLP lenders. Currently only 18 SBA Lenders are PCLP lenders.
The total estimated responses for Form 2234 based on historical rates are 23 per year. The currently reported average time spent completing the 2234, Parts A, B, and C is 55 minutes. The estimated annual hourly burden for PCLP loan approval submissions is therefore approximately 21 hours (23 x 55 min. divided by 60 = 21 hours annually).
SBA collects Form 2233 only quarterly and estimates that it takes each of the 35 PCLPs with loan loss reporting requirements based on current or former PCLP loan activity approximately 30 minutes to respond to the information collection. The PCLP can report all of its loan loss reserve balances on the one page form. Therefore, SBA estimates that the total annual hourly burden for Form 2233 is 70 hours. (35 x 4 x 1/2 hour = hours annually).
The total estimated cost burden for this collection of information based on the equivalent of a GS-11 loan officer’s salary averaged at approximately $29 per hour. This cost is broken down as follows:
Form 2234 = 21 hours x $29.00 = $609. This cost is expected to decrease because of the potential decline in the use of this program.
Form 2233 = 70 hours x $29.00 per hour = $2,030.
13. Estimate of Total Annual Cost
Provide an estimate for the total annual cost burden to respondents or record keepers resulting from the collection of information. Do not include hour cost burden from above.
There are minimal start-up costs to our external partners.
14. Estimated Annualized Cost to the Federal Government
Provide estimates of annualized costs to the Federal Government. Also provide a description of the method used to estimate cost, including a quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information.
Because PCLP lenders have delegated authority to process, approve, and close loans associated with this collection of information, the immediate burden for the agency is primarily to review for completeness and input the data for submissions that are not done through E-Tran. Approximately 100% of PCLP loans are submitted using E-tran. Therefore, based on the cost of a GS-7 clerk ($19.56 per hour) taking approximately 30 minutes to perform these tasks, SBA estimates that the cost to the government would be approximately $4,987 annually (23 PCLP submissions x 30.0% x 30 minutes per application x $19.56 per hour = $4,048.92). As noted above, SBA uses the information to facilitate its analysis of loan trends and monitoring and assessment of risks in the program and lender operations. The burden related to those functions is an integral part of SBA's overall loan monitoring and risk assessment process, and would be incurred even without this collection.
15. Explanation of Program Changes in Items 13 or 14 on OMB Form 83-I
Explain reasons for any program changes or adjustments reported in Items 13 or 14 of the OMB Form 83-I.
There has been a decline in the use of this program.
16. Collection of Information Whose Results will be Published
For collection of information whose results will be published, outline plans for tabluation and publiaction. Address complex analytical techniques… Provide time schedules for the entire project…
Only aggregated or summary data that appears in various agency reports will be published.
17. Expiration Date for Collection of this Data
If seeking approval to not display the expiration date for OMB approval of the information collection, excplain the reasons why the display would be inappropriate.
Not applicable.
18. Exceptions to the Certification in Block 19 on OMB Form 83-I
Explain each exception to the certiifcation statement identified in Item 19, “Certfication for Paperwork Reduction Act Submission,” of OMB Form 83-I.
Not applicable.
B. Collection of Information Employing Statistical Methods.
Describe (including a numerical estimate) the potential respondent universe and any sampling or other respondent selection method to be used.
Not applicable.
| File Type | application/msword |
| File Title | Introduction |
| Author | dkwright |
| Last Modified By | Rich, Curtis B. |
| File Modified | 2013-02-28 |
| File Created | 2013-02-28 |