SBI Act 687

§ 687

TITLE 15—COMMERCE AND TRADE

that was approved by the Administrator at the
time of the grant of the company’s license.
(b) Repealed. Pub. L. 92–595, § 2(f), Oct. 27, 1972,
86 Stat. 1316
(c) Application of provisions to commitments incurred prior to effective date of section
With respect to obligations or securities acquired prior to the effective date of the Small
Business Investment Act Amendments of 1967,
and with respect to legally binding commitments issued prior to such date, the provisions
of this section as in effect immediately prior to
such effective date shall continue to apply.
(Pub. L. 85–699, title III, § 306, Aug. 21, 1958, 72
Stat. 694; Pub. L. 87–341, § 7(a), Oct. 3, 1961, 75
Stat. 753; Pub. L. 88–273, § 4, Feb. 28, 1964, 78 Stat.
146; Pub. L. 90–104, title II, § 207, Oct. 11, 1967, 81
Stat. 271; Pub. L. 92–595, § 2(f), Oct. 27, 1972, 86
Stat. 1316; Pub. L. 102–366, title IV, § 408(a), Sept.
4, 1992, 106 Stat. 1016; Pub. L. 111–5, div. A, title
V, § 505(b), Feb. 17, 2009, 123 Stat. 156.)
REFERENCES IN TEXT
For effective date of the Small Business Investment
Act Amendments of 1967, referred to in subsec. (c), see
Effective Date of 1967 Amendment note set out under
section 681 of this title.
AMENDMENTS
2009—Subsec. (a). Pub. L. 111–5 amended subsec. (a)
generally. Prior to amendment, text read as follows: ‘‘If
any small business investment company has obtained
financing from the Administration and such financing
remains outstanding, the aggregate amount of obligations and securities acquired and for which commitments may be issued by such company under the provisions of this subchapter for any single enterprise shall
not exceed 20 per centum of the private capital of such
company, without the approval of the Administration.’’
1992—Subsec. (a). Pub. L. 102–366 amended subsec. (a)
generally. Prior to amendment, subsec. (a) read as follows: ‘‘Without the approval of the Administration, the
aggregate amount of obligations and securities acquired and for which commitments may be issued by
any small business investment company under the provisions of this chapter for any single enterprise shall
not exceed 20 percent of the combined private paid-in
capital and paid-in surplus of such company.’’
1972—Subsec. (a). Pub. L. 92–595, § 2(f)(1), substituted
‘‘combined private paid-in capital’’ for ‘‘combined paidin capital’’.
Subsec. (b). Pub. L. 92–595, § 2(f)(2), repealed subsec.
(b) which enumerated the items making up the combined paid-in capital and paid-in surplus of companies
licensed prior to January 1, 1968.
1967—Subsec. (a). Pub. L. 90–104 substituted ‘‘paid-in
capital and paid-in surplus of such company’’ for ‘‘capital and surplus of such small business investment company authorized by this chapter’’.
Subsecs. (b), (c). Pub. L. 90–104 added subsecs. (b) and
(c).
1964—Pub. L. 88–273 struck out the $500,000 limitation
on amount of assistance to any single enterprise.
1961—Pub. L. 87–341 inserted ‘‘or (2) $500,000, whichever is the lesser’’.
EFFECTIVE DATE OF 1967 AMENDMENT
Amendment by Pub. L. 90–104 effective Jan. 1, 1968,
see section 211 of Pub. L. 90–104, set out as a note under
section 681 of this title.
EFFECTIVE DATE OF 1961 AMENDMENT
Pub. L. 87–341, § 7(b), Oct. 3, 1961, 75 Stat. 753, provided
that: ‘‘The amendment made by subsection (a) [amend-

Page 952

ing this section] shall apply only with respect to obligations and securities acquired by a small business investment company on or after the date of the enactment of this Act [Oct. 3, 1961]; except that such amendment shall not apply with respect to any obligations or
securities so acquired pursuant to a commitment issued before such date.’’
EFFECT OF SMALL BUSINESS EQUITY ENHANCEMENT ACT
OF 1992 ON SECURITIES LAWS
Nothing in amendment by Pub. L. 102–366 to be construed to affect applicability of securities laws or to
otherwise supersede or limit jurisdiction of Securities
and Exchange Commission, see section 418 of Pub. L.
102–366, set out as a note under section 661 of this title.

§ 687. Operation and regulation of companies
(a) Cooperation with banks and other financial
institutions
Wherever practicable the operations of a small
business investment company, including the
generation of business, may be undertaken in
cooperation with banks or other investors or
lenders, incorporated or unincorporated, and
any servicing or initial investigation required
for loans or acquisitions of securities by the
company under the provisions of this chapter
may be handled through such banks or other investors or lenders on a fee basis. Any small business investment company may receive fees for
services rendered to such banks and other investors and lenders.
(b) Use of advisory services; depository or fiscal
agents; investment of funds
Each small business investment company may
make use, wherever practicable, of the advisory
services of the Federal Reserve System and of
the Department of Commerce which are available for and useful to industrial and commercial
businesses, and may provide consulting and advisory services on a fee basis and have on its
staff persons competent to provide such services. Any Federal Reserve bank is authorized to
act as a depository or fiscal agent for any company operating under provisions of this chapter.
Any such company that is licensed before October 1, 2004 and has outstanding financings is authorized to invest funds not needed for its operations—
(1) in direct obligations of, or obligations
guaranteed as to principal and interest by, the
United States;
(2) in certificates of deposit or other accounts of federally insured banks or other federally insured depository institutions, if the
certificates or other accounts mature or are
otherwise fully available not more than 1 year
after the date of the investment; or
(3) in mutual funds, securities, or other instruments that consist of, or represent pooled
assets of, investments described in paragraphs
(1) or (2).
(c) Rules and regulations
The Administration is authorized to prescribe
regulations governing the operations of small
business investment companies, and to carry
out the provisions of this chapter, in accordance
with the purposes of this chapter.
(d) Forfeiture of rights, privileges, and franchises; jurisdiction
Should any small business investment company violate or fail to comply with any of the

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TITLE 15—COMMERCE AND TRADE

provisions of this chapter or of regulations prescribed hereunder, all of its rights, privileges,
and franchises derived therefrom may thereby
be forfeited. Before any such company shall be
declared dissolved, or its rights, privileges, and
franchises forfeited, any noncompliance with or
violation of this chapter shall be determined and
adjudged by a court of the United States of competent jurisdiction in a suit brought for that
purpose in the district, territory, or other place
subject to the jurisdiction of the United States,
in which the principal office of such company is
located. Any such suit shall be brought by the
United States at the instance of the Administration or the Attorney General.
(e) Liability of United States
Except as expressly provided otherwise in this
chapter, nothing in this chapter or in any other
provision of law shall be deemed to impose any
liability on the United States with respect to
any obligation entered into, or stocks issued, or
commitments made, by any company operating
under the provisions of this chapter.
(f) Performance of functions, powers, and duties
by Administration and Administrator
In the performance of, and with respect to the
functions, powers, and duties vested by this
chapter, the Administrator and the Administration shall (in addition to any authority otherwise vested by this chapter) have the functions,
powers, and duties set forth in the Small Business Act [15 U.S.C. 631 et seq.], and the provisions of sections 13 and 16 of that Act [15 U.S.C.
642, 645], insofar as applicable, are extended to
the functions of the Administrator and the Administration under this chapter.
(g) Annual report on Small Business Investment
activities
(1) The Administration shall include in its annual report, made pursuant to section 10(a) of
the Small Business Act [15 U.S.C. 639(a)], a full
and detailed account of its operations under this
chapter. Such report shall set forth the amount
of losses sustained by the Government as a result of such operations during the preceding fiscal year, together with an estimate of the total
losses which the Government can reasonably expect to incur as a result of such operations during the then current fiscal year.
(2) In its annual report for the year ending December 31, 1967, and in each succeeding annual
report made pursuant to section 10(a) of the
Small Business Act [15 U.S.C. 639(a)], the Administration shall include full and detailed accounts relative to the following matters:
(A) The Administration’s recommendations
with respect to the feasibility and organization of a small business capital bank to encourage private financing of small business investment companies to replace Government financing of such companies.
(B) The Administration’s plans to insure the
provision of small business investment company financing to all areas of the country and
to all eligible small business concerns including steps taken to accomplish same.
(C) Steps taken by the Administration to
maximize recoupment of Government funds incident to the inauguration and administration

§ 687

of the small business investment company
program and to insure compliance with statutory and regulatory standards relating thereto.
(D) An accounting by the Office of Management and Budget with respect to Federal expenditures to business by executive agencies,
specifying the proportion of said expenditures
going to business concerns falling above and
below small business size standards applicable
to small business investment companies.
(E) An accounting by the Treasury Department with respect to tax revenues accruing to
the Government from business concerns, incorporated and unincorporated, specifying the
source of such revenues by concerns falling
above and below the small business size standards applicable to small business investment
companies.
(F) An accounting by the Treasury Department with respect to both tax losses and increased tax revenues related to small business
investment company financing of both individual and corporate business taxpayers.
(G) Recommendations of the Treasury Department with respect to additional tax incentives to improve and facilitate the operations
of small business investment companies and to
encourage the use of their financing facilities
by eligible small business concerns.
(H) A report from the Securities and Exchange Commission enumerating actions
undertaken by that agency to simplify and
minimize the regulatory requirements governing small business investment companies
under the Federal securities laws and to eliminate overlapping regulation and jurisdiction
as between the Securities and Exchange Commission, the Administration, and other agencies of the executive branch.
(I) A report from the Securities and Exchange Commission with respect to actions
taken to facilitate and stabilize the access of
small business concerns to the securities markets.
(J) Actions undertaken by the Securities and
Exchange Commission to simplify compliance
by small business investment companies with
the requirements of the Investment Company
Act of 1940 [15 U.S.C. 80a–1 et seq.] and to facilitate the election to be taxed as regulated
investment companies pursuant to section 851
of title 26.
(3) In its annual report for the year ending on
December 31, 1993, and in each succeeding annual report made pursuant to section 10(a) of the
Small Business Act [15 U.S.C. 639(a)], the Administration shall include a full and detailed description or account relating to—
(A) the number of small business investment
companies the Administration licensed, the
number of licensees that have been placed in
liquidation, and the number of licensees that
have surrendered their licenses in the previous
year, identifying the amount of government
leverage each has received and the type of leverage instruments each has used;
(B) the amount of government leverage that
each licensee received in the previous year and
the types of leverage instruments each licensee used;

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TITLE 15—COMMERCE AND TRADE

(C) for each type of financing instrument,
the sizes, geographic locations, and other
characteristics of the small business investment companies using them, including the extent to which the investment companies have
used the leverage from each instrument to
make small business loans, equity investments, or both; and
(D) the frequency with which each type of
investment instrument has been used in the
current year and a comparison of the current
year with previous years.
(h) Certifications of eligibility
(1) Certification by small business concern
Prior to receiving financial assistance from
a company licensed pursuant to section 681 of
this title, a small business concern shall certify in writing that it meets the eligibility requirements of the Small Business Investment
Company Program or the Specialized Small
Business Investment Company Program, as
applicable.
(2) Certification by company
Prior to providing financial assistance to a
small business concern under this chapter, a
company licensed pursuant to section 681 of
this title shall certify in writing that it has
reviewed the application for assistance of the
small business concern and that all documentation and other information supports the
eligibility of the applicant.
(3) Retention of certifications
Certificates made pursuant to paragraphs (1)
and (2) shall be retained by the company licensed pursuant to section 681 of this title for
the duration of the financial assistance.
(i) Interest rates
(1) The purpose of this subsection is to facilitate the orderly and necessary flow of long-term
loans and equity funds from small business investment companies to small business concerns.
(2) In the case of a business loan, the small
business investment company making such loan
may charge interest on such loan at a rate
which does not exceed the maximum rate prescribed by regulation by the Administration for
loans made by any licensee (determined without
regard to any State rate incorporated by such
regulation). In this paragraph, the term ‘‘interest’’ includes only the maximum mandatory
sum, expressed in dollars or as a percentage
rate, that is payable with respect to the business
loan amount received by the small business concern, and does not include the value, if any, of
contingent obligations, including warrants, royalty, or conversion rights, granting the small
business investment company an ownership interest in the equity or increased future revenue
of the small business concern receiving the business loan.
(3) A State law or constitutional provision
shall be preempted for purposes of paragraph (2)
with respect to any loan if such loan is made before the date, on or after April 1, 1980, on which
such State adopts a law or certifies that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states
explicitly and by its terms that such State does

Page 954

not want the provisions of this subsection to
apply with respect to loans made in such State,
except that such State law or constitutional or
other provision shall be preempted in the case of
a loan made, on or after the date on which such
law is adopted or such certification is made,
pursuant to a commitment to make such loan
which was entered into on or after April 1, 1980,
and prior to the date on which such law is adopted or such certification is made.
(4)(A) If the maximum rate of interest authorized under paragraph (2) on any loan made by a
small business investment company exceeds the
rate which would be authorized by applicable
State law if such State law were not preempted
for purposes of this subsection, the charging of
interest at any rate in excess of the rate authorized by paragraph (2) shall be deemed a forfeiture of the greater of (i) all interest which the
loan carries with it, or (ii) all interest which has
been agreed to be paid thereon.
(B) In the case of any loan with respect to
which there is a forfeiture of interest under subparagraph (A), the person who paid the interest
may recover from a small business investment
company making such loan an amount equal to
twice the amount of the interest paid on such
loan. Such interest may be recovered in a civil
action commenced in a court of appropriate jurisdiction not later than two years after the
most recent payment of interest.
(Pub. L. 85–699, title III, § 308, Aug. 21, 1958, 72
Stat. 694; Pub. L. 87–341, §§ 8, 11(c)(d), Oct. 3, 1961,
75 Stat. 753, 756; Pub. L. 88–273, § 5, Feb. 28, 1964,
78 Stat. 147; Pub. L. 89–779, § 3, Nov. 6, 1966, 80
Stat. 1359; Pub. L. 90–104, title II, § 210, Oct. 11,
1967, 81 Stat. 271; 1970 Reorg. Plan No. 2, § 102, eff.
July 1, 1970, 35 F.R. 7959, 84 Stat. 2085; Pub. L.
93–501, title II, § 204, Oct. 29, 1974, 88 Stat. 1559;
Pub. L. 95–507, title I, § 102, Oct. 24, 1978, 92 Stat.
1757; Pub. L. 96–104, title I, § 104, Nov. 5, 1979, 93
Stat. 790; Pub. L. 96–161, title II, § 204, Dec. 28,
1979, 93 Stat. 1236; Pub. L. 96–221, title V, §§ 524,
529, Mar. 31, 1980, 94 Stat. 166, 168; Pub. L. 99–226,
§ 1, Dec. 28, 1985, 99 Stat. 1744; Pub. L. 99–514, § 2,
Oct. 22, 1986, 100 Stat. 2095; Pub. L. 102–366, title
IV, §§ 408(c), 417(a), Sept. 4, 1992, 106 Stat. 1016,
1019; Pub. L. 103–403, title II, § 214, Oct. 22, 1994,
108 Stat. 4184; Pub. L. 104–208, div. D, title II,
§ 208(e), (h)(1)(B), Sept. 30, 1996, 110 Stat. 3009–745,
3009–747; Pub. L. 106–9, § 2(a), Apr. 5, 1999, 113
Stat. 17; Pub. L. 108–447, div. K, title II, § 202,
Dec. 8, 2004, 118 Stat. 3465.)
REFERENCES IN TEXT
For definition of ‘‘this chapter’’, referred to in subsecs. (a) to (h), see References in Text note set out
under section 661 of this title.
The Small Business Act, referred to in subsec. (f), is
Pub. L. 85–536, § 2(1 et seq.), July 18, 1958, 72 Stat. 384,
which is classified generally to chapter 14A (§ 631 et
seq.) of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 631 of this title and Tables.
The Investment Company Act of 1940, referred to in
subsec. (g)(2)(J), is title I of act Aug. 22, 1940, ch. 686, 54
Stat. 789, as amended, which is classified generally to
subchapter I (§ 80a–1 et seq.) of chapter 2D of this title.
For complete classification of this Act to the Code, see
section 80a–51 of this title and Tables.
CODIFICATION
Section 204 of Pub. L. 96–161, cited as a credit to this
section, was repealed by section 529 of Pub. L. 96–221 ef-

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fective at the close of Mar. 31, 1980. The amendment of
this section by that repealed provision, described in the
1979 Amendment note set out under this section, shall
continue to apply to any loan made, any deposit made,
or any obligation issued in any State during any period
when the amendment was in effect in such State.
Section 104 of Pub. L. 96–104, cited as a credit to this
section, was repealed by section 212 of Pub. L. 96–161,
effective at the close of Dec. 27, 1979. The amendment
of this section by that repealed provision, described in
the 1979 Amendment note set out under this section,
shall continue in effect for limited purposes pursuant
to section 212 of Pub. L. 96–161. See Saving Provisions
note, describing the provisions of section 212 of Pub. L.
96–161, set out under section 85 of Title 12, Banks and
Banking.
Section 204 of Pub. L. 93–501, cited as a credit to this
section, was repealed by Pub. L. 96–104, § 1, Nov. 5, 1979,
93 Stat. 789. The amendment of this section by that repealed provision, described in the 1974 Amendment
note, shall continue in effect for limited purposes pursuant to section 1 of Pub. L. 96–104. See Savings Provisions note, describing the provisions of section 1 of
Pub. L. 96–104, set out under section 85 of Title 12,
Banks and Banking.
AMENDMENTS
2004—Subsec. (b). Pub. L. 108–447, which directed the
amendment of section 308(b) of the Small Business Investment Act by substituting ‘‘Any such company that
is licensed before October 1, 2004 and has outstanding financings is authorized to invest funds not needed for
its operations—’’ and pars. (1) to (3) for last sentence,
was executed to this section, which is section 308 of the
Small Business Investment Act of 1958, to reflect the
probable intent of Congress. Prior to amendment, last
sentence read as follows: ‘‘Such companies with outstanding financings are authorized to invest funds not
reasonably needed for their operations in direct obligations of, or obligations guaranteed as to principal and
interest by, the United States, or in certificates of deposit maturing within one year or less, issued by any
institution the accounts of which are insured by the
Federal Deposit Insurance Corporation or the Federal
Savings and Loan Insurance Corporation, or in savings
accounts of such institutions.’’
1999—Subsec. (i)(2). Pub. L. 106–9 inserted at end: ‘‘In
this paragraph, the term ‘interest’ includes only the
maximum mandatory sum, expressed in dollars or as a
percentage rate, that is payable with respect to the
business loan amount received by the small business
concern, and does not include the value, if any, of contingent obligations, including warrants, royalty, or
conversion rights, granting the small business investment company an ownership interest in the equity or
increased future revenue of the small business concern
receiving the business loan.’’
1996—Subsec. (e). Pub. L. 104–208, § 208(e), substituted
‘‘Except as expressly provided otherwise in this chapter, nothing’’ for ‘‘Nothing’’.
Subsec. (h). Pub. L. 104–208, § 208(h)(1)(B), substituted
‘‘section 681 of this title’’ for ‘‘subsection (c) or (d) of
section 681 of this title’’ in pars. (1) to (3).
1994—Subsec. (h). Pub. L. 103–403 added subsec. (h).
1992—Subsec. (b). Pub. L. 102–366, § 408(c), inserted
‘‘with outstanding financings’’ after ‘‘Such companies’’
in third sentence.
Subsec. (g)(3). Pub. L. 102–366, § 417(a), added par. (3).
1986—Subsec. (g)(2)(J). Pub. L. 99–514 substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue
Code of 1954’’, which for purposes of codification was
translated as ‘‘title 26’’ thus requiring no change in
text.
1985—Subsec. (i)(2). Pub. L. 99–226, § 1(a), substituted
‘‘the maximum rate prescribed by regulation by the
Administration for loans made by any licensee (determined without regard to any State rate incorporated
by such regulation).’’ for ‘‘the lowest of the rates described in subparagraphs (A), (B), and (C)’’ and struck
out subpars. (A), (B), and (C) which described the rates.

§ 687

Subsec. (i)(3). Pub. L. 99–226, § 1(b), substituted ‘‘paragraph (2)’’ for ‘‘paragraph (2)(B)’’.
1980—Subsec. (h). Pub. L. 96–221, § 529, repealed Pub.
L. 96–104 and title II of Pub. L. 96–161, resulting in the
striking out of subsec. (h) which related to the limitation on interest rates, overcharges, forfeitures, and the
recovery of interest payments. See subsec. (i) of this
section for successor provisions. See also Codification
and 1979 Amendment notes under this section.
Subsec. (i). Pub. L. 96–221, § 524, added subsec. (i).
1979—Subsec. (h). Pub. L. 96–161 reenacted subsec. (h)
[as added by Pub. L. 96–104] with three substitutions of
dates: in par. (3)(A) ‘‘in the case of a State statute,
July 1, 1980’’ was substituted for ‘‘July 1, 1981’’, in par.
(3)(B) ‘‘December 28, 1979’’ was substituted for ‘‘November 5, 1979’’, and in par. (3)(C) ‘‘December 28, 1979’’ was
substituted for ‘‘November 5, 1979’’.
Pub. L. 96–104 added subsec. (h). A prior subsec. (h),
also relating to limitation on interest rates, overcharges, forfeitures, and the recovery of interest payments, was repealed by section 1 of Pub. L. 96–104.
1978—Subsec. (b). Pub. L. 95–507 inserted provisions
authorizing small business investment companies to invest funds not reasonably needed for their operations in
certificates of deposit maturing within one year or less
issued by particular insured institutions and savings
accounts of institutions insured by the Federal Deposit
Insurance Corporation.
1974—Subsec. (h). Pub. L. 93–501 added subsec. (h).
1967—Subsec. (g). Pub. L. 90–104 designated existing
provisions as par. (1) and added par. (2).
1966—Subsec. (c). Pub. L. 89–779, § 3(1), struck out provisions subjecting each small business investment company to examinations by examiners approved by the
Administration and requiring the submission of reports
by the companies. See section 687b(b) of this title.
Subsecs. (f), (g). Pub. L. 89–799, § 3(2), added subsecs.
(f) and (g).
1964—Subsec. (b). Pub. L. 88–273 authorized investment of funds in insured savings accounts (up to the
amount of insurance) in institutions insured by the
Federal Savings and Loan Insurance Corporation.
1961—Subsec. (a). Pub. L. 87–341, § 8, substituted ‘‘investors or lenders’’ for ‘‘financial institutions’’ wherever appearing, and provided that these investors or
lenders can be either incorporated or unincorporated.
Subsec. (b). Pub. L. 87–341, § 11(c), substituted ‘‘operating under the provisions of this chapter’’ for ‘‘organized under this chapter’’.
Subsec. (e). Pub. L. 87–341, § 11(d), redesignated subsec. (g) as (e), substituted ‘‘operating under the provisions of this chapter’’ for ‘‘organized under this chapter’’, and repealed former subsec. (e) which related to
obtaining restraining orders against violators of this
chapter.
Subsec. (f). Pub. L. 87–341, § 11(d), repealed subsec. (f)
which permitted small business investment companies
to extend their corporate existence for a term of not
more than 30 years. See subsec. (a) of section 681 of this
title.
Subsec. (g). Pub. L. 87–341, § 11(d), redesignated subsec. (g) as (e).
EFFECTIVE DATE OF 1985 AMENDMENT
Pub. L. 99–226, § 2, Dec. 28, 1985, 99 Stat. 1744, provided
that: ‘‘This Act [amending this section] shall apply to
maximum interest rates prescribed by the Administration on or after April 1, 1980.’’
EFFECTIVE DATE OF 1980 AMENDMENT
Pub. L. 96–221, title V, § 529, Mar. 31, 1980, 94 Stat. 168,
provided that the amendment made by that section is
effective at the close of Mar. 31, 1980.
EFFECTIVE DATE OF 1979 AMENDMENTS
Pub. L. 96–161, title II, § 207, Dec. 28, 1979, 93 Stat. 1238,
which provided that amendment by Pub. L. 96–161 was
applicable to loans made in any State during the period
beginning on Dec. 28, 1979, and ending on the earliest of

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TITLE 15—COMMERCE AND TRADE

(1) in the case of a State statute, July 1, 1980; (2) the
date, after Dec. 28, 1979, on which such State adopts a
law stating in substance that such State does not want
the amendment of this section made by Pub. L. 96–161
to apply with respect to loans made in such State; or
(3) the date on which such State certifies that the voters of such State, after Dec. 28, 1979, have voted in favor
of, or to retain, any law, provision of the constitution
of such State, or amendment to the constitution of
such State which prohibits the charging of interest at
the rates provided in the amendment of this section by
Pub. L. 96–161, was repealed by Pub. L. 96–221, title V,
§ 529, Mar. 31, 1980, 94 Stat. 168.
Pub. L. 96–104, title I, § 107, Nov. 5, 1979, 93 Stat. 792,
which provided that amendment by Pub. L. 96–104 was
applicable to loans made by any State during the period beginning on Nov. 5, 1979, and ending on the earlier
of July 1, 1981, or the date after Nov. 5, 1979, on which
such State adopts a law stating in substance that such
State does not want the amendment of this section to
apply with respect to loans made in such State, or the
date on which such State certifies that the voters of
such State have voted in favor of, or to retain, any law,
provision of the constitution of such State, or amendment of the constitution of such State, which prohibits
the charging of interest at the rates provided in the
amendment of this section, was repealed by Pub. L.
96–161, title II, § 212, Dec. 28, 1979, 93 Stat. 1239.
EFFECTIVE DATE OF 1974 AMENDMENT
Pub. L. 93–501, title II, § 206, Oct. 29, 1974, 88 Stat. 1560,
which provided that amendment by Pub. L. 93–501 was
applicable to loans made in any state after Oct. 29, 1974,
but prior to the earlier of July 1, 1977 or the date of enactment by the state of a law prohibiting the charging
of interest at the rates provided in the amendment of
this section, was repealed by Pub. L. 96–104, § 1, Nov. 5,
1979, 93 Stat. 789.
EFFECTIVE DATE OF 1967 AMENDMENT
Amendment by Pub. L. 90–104 effective 90 days after
Oct. 11, 1967, see section 211 of Pub. L. 90–104, set out as
a note under section 681 of this title.
SAVINGS PROVISION
Pub. L. 96–221, title V, § 529, Mar. 31, 1980, 94 Stat. 168,
provided in part that, notwithstanding the repeal of
Pub. L. 96–104 and title II of Pub. L. 96–161, the provisions of subsec. (h) of this section [which had been
added to this section by those repealed laws] shall continue to apply to any loan made, any deposit made, or
any obligation issued to any State during any period
when those provisions were in effect in such State.
EFFECT OF SMALL BUSINESS EQUITY ENHANCEMENT ACT
OF 1992 ON SECURITIES LAWS
Nothing in amendment by Pub. L. 102–366 to be construed to affect applicability of securities laws or to
otherwise supersede or limit jurisdiction of Securities
and Exchange Commission, see section 418 of Pub. L.
102–366, set out as a note under section 661 of this title.
TRANSFER OF FUNCTIONS
Bureau of the Budget designated as Office of Management and Budget and Offices of Director, Deputy Director, and Assistant Directors of Bureau of the Budget
designated Director, Deputy Director, and Assistant
Directors of Office of Management and Budget, respectively. Records, property, personnel, and funds of Bureau of the Budget transferred to Office of Management
and Budget. See Part I of Reorganization Plan 2 of 1970,
set out in the Appendix to Title 5, Government Organization and Employees.
CHOICE OF HIGHEST APPLICABLE INTEREST RATE
In any case in which one or more provisions of, or
amendments made by, title V of Pub. L. 96–221, section
1735f–7a of Title 12, Banks and Banking, or any other

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provisions of law, including section 85 of Title 12, apply
with respect to the same loan, mortgage, credit sale, or
advance, such loan, mortgage, credit sale, or advance
may be made at the highest applicable rate, see section
528 of Pub. L. 96–221, set out as a note under section
1735f–7a of Title 12.
STATES HAVING CONSTITUTIONAL PROVISIONS
REGARDING MAXIMUM INTEREST RATES
Pub. L. 96–161, title II, § 213, Dec. 28, 1979, 93 Stat. 1240,
provided that the provisions of title II of Pub. L. 96–161,
which amended this section and repealed provisions
which had formerly amended this section, to continue
to apply until July 1, 1981, in the case of any State having a constitutional provision regarding maximum interest rates.
DEFINITION OF ‘‘STATE’’
For purposes of subsec. (i) of this section, the term
‘‘State’’ to include the several States, the Commonwealth of Puerto Rico, the District of Columbia, Guam,
the Trust Territories of the Pacific Islands, the Northern Mariana Islands, and the Virgin Islands, see section
527 of Pub. L. 96–221, set out as a note under section
1735f–7a of Title 12, Banks and Banking.

§ 687a. Revocation and suspension of licenses;
cease and desist orders
(a) Grounds for suspension or revocation
A license may be revoked or suspended by the
Administration—
(1) for false statements knowingly made in
any written statement required under this
subchapter, or under any regulation issued
under this subchapter by the Administration;
(2) if any written statement required under
this subchapter, or under any regulation issued under this subchapter by the Administrator, fails to state a material fact necessary
in order to make the statement not misleading in the light of the circumstances under
which the statement was made;
(3) for willful or repeated violation of, or
willful or repeated failure to observe, any provision of this chapter;
(4) for willful or repeated violation of, or
willful or repeated failure to observe, any rule
or regulation of the Administration authorized by this chapter; or
(5) for violation of, or failure to observe, any
cease and desist order issued by the Administration under this section.
(b) Grounds for cease and desist order
Where a licensee or any other person has not
complied with any provision of this chapter, or
of any regulation issued pursuant thereto by the
Administration, or is engaging or is about to engage in any acts or practices which constitute or
will constitute a violation of such chapter or
regulation, the Administration may order such
licensee or other person to cease and desist from
such action or failure to act. The Administration may further order such licensee or other
person to take such action or to refrain from
such action as the Administration deems necessary to insure compliance with this chapter
and the regulations. The Administration may
also suspend the license of a licensee, against
whom an order has been issued, until such licensee complies with such order.
(c) Order to show cause; contents; hearing; issuance and service
Before revoking or suspending a license pursuant to subsection (a) of this section, or issuing