123STA T . 1 60PUBLIC LA W 111 –5—FE B.1 7, 200 9(A)ORGANIZ A T I O N .— ( i ) The A dm i n i stra t o r sha l l esta b lish w ithin the SB Aano f fi c eto p ro v ide loans to S y stemically I mpor - tant Secondary M ar k et Broker-dealers to be u sed for the purpose of financin g the inventory of the govern- ment guaranteed portion of loans , originated, under- written, and closed under the Small Business Act or pools of such loans. (ii) The Administrator shall appoint a D irector of the Authority who shall report to the Administrator. (iii) The Administrator is authori z ed to hire such personnel as are necessary to operate the Authority. (iv) The Administrator may contract such Authority operations as he determines necessary to q ualified third-party companies or individuals. (v) The Administrator is authorized to contract with private sector fiduciary and custodial agents as necessary to operate the Authority. (B) L OAN S .— (i) The Administrator shall establish by rule a process under which Systemically Important SBA Sec- ondary Market Broker-Dealers designated under para- graph ( 1 ) may apply to the Administrator for loans under this section. (ii) The rule under clause (i) shall provide a process for the Administrator to consider and make decisions regarding whether or not to e x tend a loan applied for under this section. Such rule shall include provi- sions to assure each of the following
(I) That loans made under this section are for the sole purpose of financing the inventory of the govern ment guaranteed portion of loans, originated, underwritten, and closed under the Small Business Act or pools of such loans. (II) That loans made under this section are fully collateralized to the satisfaction of the Administrator. (III) That there is no limit to the frequency in which a borrower may borrow under this section unless the Administrator determines that doing so would create an undue risk of loss to the agency or the U nited States. (I V ) That there is no limit on the size of a loan, sub j ect to the discretion of the Administrator. (iii) Interest on loans under this section shall not exceed the F ederal Funds target rate as established by the Federal R eserve Board of G overnors plus 25 basis points. (iv) The rule under this section shall provide for such loan documents, legal covenants, collateral requirements and other required documentation as nec- essary to protect the interests of the agency, the United States, and the taxpayer. (v) The Administrator shall establish custodial accounts to safeguard any collateral pledged to the SBA in connection with a loan under this section. Regulations.
