Sba Lender Oversight

SBA lender oversight: preventing loan fraud and improving regulation of lenders: hearing before the Committee on Small Business and Entrepreneurship, United States Senate, One Hundred Tenth Congress, first session, November 13, 2007.

SBA lender oversight : preventing loan fraud and improving regulation of lenders : hearing before the Committee on Small Business and Entrepreneurship, United States Senate, One Hundred Tenth Congress, first session, November 13, 2007.

The Small Business Administration (SBA) guarantees individual loans that lenders originate. The agency uses its Loan and Lender Monitoring System (L/LMS) to assess the individual risk of each loan, and SBA's contractor developed a lender risk rating system (LRRS) based on L/LMS data. However, questions have been raised about the extent to which SBA has used its LRRS to improve its oversight of lenders. This report examined: (1) how SBA's LRRS compares with those used by federal financial regulators and lenders and the system's usefulness for predicting lender performance; and (2) how SBA uses the LRRS in its lender oversight activities. The author interviewed officials from three federal financial regulators and 10 large SBA lenders. Illus.