Regulation 13 CFR 120

§ 120.972

13 CFR Ch. I (1–1–14 Edition)

§ 120.972 Third Party Lender participation fee and CDC fee.
(a) Participation fee. For loans approved by SBA after September 30,
1996, SBA must collect a one-time fee
equal to 50 basis points on the Third
Party Lender’s participation in a
Project when the Third Party Lender
occupies a senior credit position to
SBA in the Project.
(b) CDC fee. For loans approved by
SBA after September 30, 1996, SBA
must collect an annual fee from the
CDC equal to 0.125 percent of the outstanding principal balance of the Debenture. The fee must be paid from the
servicing fees collected by the CDC and
cannot be paid from any additional fees
imposed on the Borrower.
[68 FR 57988, Oct. 7, 2003]

AUTHORITY OF CDCS TO PERFORM LIQUIDATION AND DEBT COLLECTION LITIGATION

ehiers on DSK2VPTVN1PROD with CFR

§ 120.975 CDC Liquidation of loans and
debt collection litigation.
(a) PCLP CDCs. If a CDC is designated
as a PCLP CDC under § 120.845, the CDC
must liquidate and handle debt collection litigation with respect to all
PCLP Loans in its portfolio on behalf
of SBA as required by § 120.848(f), in accordance with subpart E of this part.
With respect to all other 504 loans that
a PCLP CDC makes, the PCLP CDC is
an Authorized CDC Liquidator and
must exercise its delegated authority
to liquidate and handle debt-collection
litigation in accordance with subpart E
of this part for such loans, if the PCLP
CDC is notified by SBA that it meets
either of the following requirements to
be an Authorized CDC Liquidator, as
determined by SBA:
(1) The PCLP CDC has one or more
employees who have not less than two
years of substantive, decision-making
experience in administering the liquidation and workout of defaulted or
problem loans secured in a manner substantially similar to loans funded with
504 loan program debentures, and who
have completed a training program on
loan liquidation developed by the
Agency in conjunction with qualified
CDCs that meet the requirements of
this section; or

(2) The PCLP CDC has entered into a
contract with a qualified third party
for the performance of its liquidation
responsibilities and obtains the approval of SBA with respect to the
qualifications of the contractor and the
terms and conditions of the contract.
(b) All other CDCs. A CDC that is not
authorized under paragraph (a) of this
section may apply to become an Authorized CDC Liquidator with authority to liquidate and handle debt collection litigation with respect to 504 loans
on behalf of SBA, in accordance with
subpart E of this part, if the CDC
meets the following requirements:
(1) The CDC meets either of the following criteria:
(i) The CDC participated in the loan
liquidation pilot program established
by the Small Business Programs Improvement Act of 1996 prior to October
1, 2006; or
(ii) During the three fiscal years immediately prior to seeking such authority, the CDC made an average of
not less than ten 504 loans per year;
and
(2) The CDC meets either of the following requirements:
(i) The CDC has one or more employees who have not less than two years of
substantive, decision-making experience in administering the liquidation
and workout of defaulted or problem
loans secured in a manner substantially similar to loans funded with 504
loan program debentures, and who have
completed a training program on loan
liquidation developed by the Agency in
conjunction with qualified CDCs that
meet the requirements of this section;
or
(ii) The CDC has entered into a contract with a qualified third party for
the performance of its liquidation responsibilities and obtains the approval
of SBA with respect to the qualifications of the contractor and the terms
and conditions of the contract.
(c) CDC counsel. To perform debt collection litigation under paragraphs (a)
or (b) of this section, a CDC must also
have either in-house counsel with adequate experience as approved by SBA
or entered into a contract for the performance of debt collection litigation
with an experienced attorney or law
firm as approved by SBA.

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