Best Practices: OCRM Identifies Top Loan File Review Findings
On January 11, 2022, during the most recent SBA 7(a) Connect Quarterly Update, the Office of Credit Risk Management (OCRM) highlighted issues in all stages of the life of a loan – from origination through closing and servicing that resulted in findings during risk assessments reviews performed in fiscal year 2021. The most common deficiencies ... Read More
Best Practices: Affiliation Based Upon Identity of Interest
SBA lending, with its myriad rules, regulations and ever-changing guidelines, has always been a challenge for compliance-minded lenders. One of the most difficult SBA topics for lenders to deal with has been affiliation, with its multiple ways for businesses to be deemed affiliated with one another. Although complex, the rules concerning affiliation are usually somewhat ... Read More
Best Practices: The Benefits To The Lender And Borrower Of A Borrower Being Represented By An Experienced Commercial Attorney
One way for borrowers to have a more pleasant loan closing experience and for the lender to see its customer achieve long-term business success is when a borrower chooses to retain an experienced commercial attorney (“ECA”). Such an individual can assist the borrower to structure the transaction favorably for the borrower. As those of you ... Read More
Best Practices: Post-Closing Reviews
With year-end behind us, many of us are now able to find a moment of quiet following the hectic whirlwind that was 2021. The intensity of the past year was overwhelming at times, and unfortunately the volume and chaos may have led to loan documentation errors. Accordingly, prudent lenders should take advantage of the opportunity ... Read More
Best Practices: Consumer Financial Protection Bureau Issues Proposed Rule for Collecting and Reporting Small Business Lending Data
On September 1, 2021, the Consumer Financial Protection Bureau (CFPB and/or Bureau) issued a notice of proposed rulemaking (NPRM) requesting public comment on its proposed rule to implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).[1] The publication of the NPRM in the Federal Register on October 8, 2021, ... Read More
Best Practices: Documenting Disbursement of 7(a) Loan Proceeds
In order to properly document and close an SBA 7(a) loan, lenders must exercise care to ensure that loan proceeds are disbursed in strict accordance with the lender’s credit memo, SBA loan authorization, and SBA Form 1050. SBA cites failure to use loan proceeds as required by the SBA loan authorization as one of the ... Read More
