PREMIER CERTIFIED LENDERS PROGRAM.

SEC. 217. PREMIER CERTIFIED LENDERS PROGRAM. (a) In General.—Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at the end the following new section: “SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM. “(a) Establishment.—On a pilot program basis, the Administration may establish a Premier Certified Lenders Program for not more than 15 certified development companies that meet the requirements of subsection (b). “(b) Requirements.— “(1) Application.—To be eligible to participate in the Premier Certified Lenders Program established under subsection (a), a certified development company shall prepare and submit to the Administration an application at such time, in such manner, and containing such information as the Administration may require. “(2) Designation.—The Administration may designate a certified development company as a premier certified lender if such company— “(A) has been an active participant in the accredited lenders program during the 12-month period preceding the date on which the company submits an application under paragraph (1), except that, prior to January 1, 1996, the Administration may waive this requirement if the company is qualified to participate in the accredited lenders program; “(B) has a history of submitting to the Administration adequately analyzed debenture guarantee application packages; and “(C) agrees to assume and to reimburse the Administration for 10 percent of any loss sustained by the Administration as a result of default by the company in the payment of principal or interest on a debenture issued by 108 STAT. 4186such company and guaranteed by the Administration under this section. “(c) Loss Reserve.— “(1) Establishment.—A company designated as a premier certified lender shall establish a loss reserve for financings approved pursuant to this section. “(2) Amount.—The amount of the loss reserve shall be based upon the greater of— “(A) the historic loss rate on debentures issued by such company; or “(B) 10 percent of the amount of the company’s expo-sure as determined under subsection (b)(2)(C). “(3) Assets.—The loss reserve shall be comprised of segregated assets of the company which shall be securitized in favor of the Administration. “(4) Contributions.—The company shall make contributions to the loss reserve in the following amounts and at the following intervals: “(A) 50 percent when a debenture is closed. “(B) 25 percent not later than 1 year after a debenture is closed. “(C) 25 percent not later than 2 years after a debenture is closed. “(d) Loan Approval Authority.— “(1) In general.—Notwithstanding section 503(b)(6), and subject to such terms and conditions as the Administration may establish, the Administration may permit a company designated as a premier certified lender under this section to approve loans that are funded with the proceeds of a debenture issued by such company and may authorize the guarantee of such debenture. “(2) Scope of review.—The approval of a loan by a premier certified lender shall be subject to final approval as to eligibility of any guarantee by the Administration pursuant to section 503(a), but such final approval shall not include review of decisions by the lender involving creditworthiness, loan closing, or compliance with legal requirements imposed by law or regulation. “(e) Review.—After the issuance and sale of debentures under this section, the Administration, at intervals not greater than 12 months, shall review the financings made by each premier certified lender. The review shall include the lender’s credit decisions and general compliance with the eligibility requirements for each financing approved under the program authorized under this section. The Administration shall consider the findings of the review in carrying out its responsibilities under subsection (f) but such review shall not affect any outstanding debenture guarantee. “(f) Suspension or Revocation.—The designation of a State or local development company as a premier certified lender may be suspended or revoked if the Administration determines that the company— “(1) has not continued to meet the criteria for eligibility under subsection (b); “(2) has not established or maintained the loss reserve required under subsection (c); “(3) is failing to adhere to the Administration’s rules and regulations; or 108 STAT. 4187 “(4) is violating any other applicable provision of law. “(g) Effect of Suspension or Designation.—A suspension or revocation under subsection (f) shall not affect any outstanding debenture guarantee. “(h) Regulations.— Not later than 180 days after the date of enactment of this section, the Administration shall promulgate regulations to carry out this section. “(i) Report.—Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Administration shall report to the Committees on Small Business of the Senate and the House of Representatives on the implementation of this section. Each report shall include— “(1) the number of certified development companies designated as premier certified lenders; “(2) the debenture guarantee volume of such companies; “(3) a comparison of the loss rate for premier certified lenders to the loss rate for accredited and other lenders; and “(4) such other information as the Administration deems appropriate.”. (b) Repeal.—Effective on October 1, 1997, section 508 of the Small Business Investment Act of 1958, as added by subsection (a), is repealed.