December 9, 2020

Caity Roach
Editor

C-Suite Wednesday — SOP 50 53 2 Adds New Lender Oversight Fees 

On December 7, 2020, the SBA’s Office of Credit Risk Management (OCRM) announced the issuance of SOP 50 53 2 on Supervision and Enforcement, which goes into effect January 1, 2020. The new SOP incorporates recent legislation, including 15 USC § 634(b)(14) and 13 CFR § 120.1070 which allow the SBA to charge 7(a) lenders fees to cover the cost of oversight activities. 

The new fees are intended to cover the cost of conducting lender monitoring, in-depth 7(a) lender reviews, loan reviews, safety and soundness examinations of SBA supervised lenders, and any additional expenses that SBA incurs in carrying out 7(a) lender oversight activities. Additional expenses may include technical assistance, analytics, salaries and travel expenses of SBA employees, and equipment expenses directly related to 7(a) Lender oversight.

In general, when the SBA incurs costs related to a 7(a) Lender oversight activity, the SBA will charge the respective Lender a fee for the actual cost of oversight. However, if the SBA incurs oversight costs not related to one specific 7(a) Lender, the SBA will assess a fee based on each 7(a) Lender’s portion of the total dollar amount of SBA guarantees in SBA’s total portfolio or in the relevant portfolio segment being reviewed.

When OCRM invoices oversight fees, payment is due no less than 30 calendar days from the date on the invoice. If the total amount of fees due is not received by the due date specified in the bill, any unpaid amount is considered delinquent and SBA will then add interest and penalties on top of the original fee. If a 7(a) Lender continues to not pay, the SBA may take enforcement actions, including but not limited to, suspension or revocation of a 7(a) Lender’s eligibility to participate in the 7(a) program, limiting a 7(a) Lender’s delegated authority, and further collection proceedings.

To avoid regulatory scrutiny, consider enrolling in Coleman’s SOP 50 53 2 Webinar which will be held on Wednesday, December 16, 2020, at 2:00 PM Eastern.