108 STAT. 4186
PUBLIC LAW 103-403—OCT. 22, 1994
such company and guaranteed by the Administration under
this section.
"(c) Loss RESERVE.—
"(1) ESTABLISHMENT. —^A company designated as a premier
certified lender shall establish a loss reserve for finsuicings
approved pursuant to this section.
"(2) AMOUNT.— The amount of the loss reserve shall be
based upon the greater of—
"(A) the historic loss rate on debentures issued by
such company; or
"(B) 10 percent of the amount of the company's exposure as determined under subsection (b)(2)(C).
"(3) ASSETS. —The loss reserve shall be comprised of segregated assets of the company which shall be securitized in
favor of the Administration.
"(4) CONTRIBUTIONS.— The company shall make contributions to the loss reserve in the following amounts and at the
following intervals:
"(A) 50 percent when a debenture is closed.
"(B) 25 percent not later than 1 year after a debenture
is closed.
"(C) 25 percent not later than 2 years after a debenture
is closed.
"(d) LOAN APPROVAL AUTHORITY.—
"(1) IN GENERAL. — Notwithstanding section 503(b)(6), and
subject to such terms and conditions as the Administration
may establish, the Administration may permit a company designated as a premier certified lender under this section to
approve loans that are funded with the proceeds of a debenture
issued by such company and may authorize the guarantee
of such debenture.
"(2) SCOPE OF REVIEW.— The approval of a loan by a premier
certified lender shall be subject to final approval as to eligibility
of any guarantee by the Administration pursuant to section
503(a), but such final approval shall not include review of
decisions by the lender involving creditworthiness, loan closing,
or compliance with legal requirements imposed by law or regulation.
"(e) REVIEW.— After the issuance and sale of debentures under
this section, the Administration, at intervals not greater than 12
months, shall review the financings made by each premier certified
lender. The review shall include the lender's credit decisions suid
general compliance with the eligibility requirements for each financing approved under the program authorized under this section.
The Administration shall consider the findings of the review in
carrying out its responsibilities under subsection (f), but such review
shall not affect any outstanding debenture guarantee.
"(f) SUSPENSION OR REVOCATION. —The designation of a State
or local development company as a premier certified lender may
be suspended or revoked if the Administration determines that
the company—
"(1) has not continued to meet the criteria for eligibility
under subsection (b);
"(2) has not established or maintained the loss reserve
required under subsection (c);
"(3) is failing to adhere to the Administration's rules and
regulations; or
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