99-8147. Business Loan Programs; Notice of Initial Benchmark Number

[Federal Register Volume 64, Number 63 (Friday, April 2, 1999)]
[Notices]
[Page 16021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8147]


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SMALL BUSINESS ADMINISTRATION


Business Loan Programs; Notice of Initial Benchmark Number

AGENCY: Small Business Administration.

ACTION: Notice.

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SUMMARY: SBA regulations governing the securitization of Section 7(a) 
loans require that from time to time the SBA publish in the Federal 
Register the ``Benchmark Number'' to be used in overseeing securitizing 
lenders. The Benchmark Number is the number of percentage points that a 
securitizing lender's Currency Rate may decline before SBA takes 
action. The purpose of this Notice is to establish an initial Benchmark 
Number of 2.5 percentage points.

SUPPLEMENTARY INFORMATION: In February of 1999, SBA published its final 
rule governing the securitization of the unguaranteed portions of 7(a) 
loans in the Federal Register. Section 120.420 of the rule requires the 
SBA to publish the ``Benchmark Number'' for securitizations in the 
Federal Register from time to time. The Benchmark Number will be used 
in the oversight of securitizing lenders. The Benchmark Number is the 
number of percentage points that a securitizing lender's Currency Rate 
may decline before SBA takes action.
    The 2.5 percentage point Benchmark was proposed in comments to the 
May 1998 proposed securitization rule (63 FR 27221). SBA considers a 
2.5 percentage point decline in Currency Rate a significant event 
warranting action. SBA will monitor the Benchmark Number and, if 
economic conditions or policy considerations warrant, SBA may modify it 
to protect the safety and soundness of the 7(a) program. SBA will 
publish any modifications to the Benchmark Number in the Federal 
Register at least 30 days before the effective date.

DATES: Effective April 2, 1999.

FOR FURTHER INFORMATION CONTACT: James W. Hammersley, Director, 
Secondary Market Sales, 202-205-7505, U.S. Small Business 
Administration, 409 Third Street, S.W., Suite 8200, Washington, D.C. 
20416.
Aida Alvarez,
Administrator.
[FR Doc. 99-8147 Filed 4-1-99; 8:45 am]
BILLING CODE 8025-01-P