http://disabilityrightswi.org/lus-hmoob
The SBA's Office of Inspecto r General outlined its concerns in a memo that said agency actioj is overdue on 10 recommendations it made in the past to addressz weaknesses in lender oversight and agency The Office of Management and Budger has directed agencies to address problems disclosed by prior audits in programss that will receive funding through the American Recovery andReinvestment Act. Lender oversight is particularly important because the bill temporaril increased the government guaranty onthe SBA's 7(a) businesse loans to 90 percent.
"Because the higher guarantiesa reducelender risk, which may lead to poor a greater potential will exist for lossesa and fraud," wrote Debra the SBA's assistant inspector general. That's why it's importanyt for the SBA to do onsite reviewds for all SBA lenderswith high-rismk ratings that have more than $4 million in guaranteefd loan portfolios, the memo stated. The agencg has agreed that's needed but hasn't done it yet. The SBA also hasn'ft implemented comprehensive policies and procedures that define acceptabl lender performance and risktolerances levels, or what enforcement actions will be takenb when risk tolerance limits are violated.
The SBA also needd to do a better job of collecting imprope r payments of loan guaranties to lenderszwho didn't follow prudent lendintg practices or failed to comply with SBA according to the inspector general's office. More than $4 million in improper payments identified by previous auditzs have notbeen recovered, the office found. "Increases in loan volumex and reduced lender risk under the Recovery Act are expectede to lead to higher levels ofimproper payments," the memo stated. The bill also providefd $30 million in additional funding for theMicroloan program, which makes small loan to aspiring entrepreneurs through nonprofit organizations that also provide technicaol assistance.
The SBA needs to develop standardc operating procedures for this and collect information on whethet the businesses that received these loansbecamde successful, according to the SBA spokesman Jonathan Swain said the agency "is working on a numbert of fronts" to implement the recommendation s cited in the memo. "We do take them very seriously," he The agency particularly is focused on lendedr oversight and risk management as it rolls outnew stimulus-related Its new $35,000 America'es Recovery Capital loans, for example, are designed to be "a riskietr loan program than the SBA has ever offered," he because they're an effort to help businesses that temporariluy are having problems makinvg loan payments.
The SBA is looking at ways to mitigater that risk as much as he said.