Sec. 3. FHLB advances secured by SBA loans
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Section 7 of the Small Business Act ( 15 U.S.C. 636 ) is amended by adding at the end the following: In this subsection, the term Bank means a Federal Home Loan Bank, as defined in section 2 of the Federal Home Loan Bank Act ( 12 U.S.C. 1422 ). A Bank that, in the exercise of its authority under section 10 of the Federal Home Loan Bank Act ( 12 U.S.C. 1430 ) to make secured advances, accepts as collateral a loan guaranteed by the Administration under this Act or any other provision of law, including loans guaranteed under section 7(a)— may exercise all of the rights and remedies contained in any pledge or similar security agreement between the Bank and the lending or participating institution that made or purchased the loan; and in the event of default on the loan, shall possess the same rights and remedies as such a lending or participating institution would possess in the same circumstance, including collecting monies due on the guarantee directly from the Administration.
With respect to a guaranteed loan that a Bank accepts as collateral under paragraph (2), the guarantee obligation of the Administration on the loan shall transfer to the Bank. .
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