Yesterday, at the Coleman 2009 Rural Lenders Roundtable, USDA B&I Administrator Judith Canales announced several new initiatives to improve the delivery of B&I loans to the business community. A pending interim rule, which would have combined the Agency's commercial lending and community development programs under a common regulatory platform, was withdrawn as of September 21, 2009. Although some of the interim rule provisions appeared to improve the B&I loan program, USDA Rural Development believed the rule would have added unnecessary confusion and complexity to the delivery of the Agency's several guaranteed loan programs and impeded the initiative to use American Recovery and Reinvestment Act ("ARRA") funds. Instead, Rural Development believes that the current B&I regulations provide the best platform for a common regulatory framework for its commercial lending activities. Ultimately, several "program refinements," which can be made immediately under the current regulations (without the lengthy delays of formal regulatory reform or congressional action), will have the greatest immediate impact for small businesses in need of capital. Highlights of upcoming changes include:
* Acknowledging inconsistency in regulatory
interpretation and program administration among the
47 state Rural Development offices, initiatives to
improve communication, guidance and training
between state offices and headquarters were
announced.
* Rural Development announced the implementation of
a Certified Lenders Program by the end of November,
2009 that will provide expedited processing of the
application and the loan note guaranty on "smaller"
loans.
* Recognizing the current need in the economy to boost
construction financing, Rural Development indicated
that the state offices will be directed to exercise the
Agency's existing authority to issue guarantees prior to
the completion of construction. USDA anticipates the
directive will be issued by the end of October, 2009.
Additionally, attendees at the conference requested the establishment of an Ombudsman for the B&I program to give lenders and other program participants a forum in which to report inconsistencies among the various state offices. This request was well received by the Agency, which had been considering the establishment of such an office.
For more information on the upcoming changes to the B&I program, contact the authors at 215-542-7070, or via email at
ajohnson@starfieldsmith.com. More information on the Coleman 2009 Rural Lenders Roundtable can be found at
www.colemanpublishing.com.
