§ 500.211. Lender responsibilities.
512 words·~2 min read·
/us/cfr/t13/s§ 500.211·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)General. Lender shall comply with all provisions of the Guarantee.
(b)Standard of care. The Lender shall exercise due care and diligence in administering the loan as would be exercised by a reasonable and prudent banking institution when administering a secured loan of such banking institution's own funds without a Federal guaranty. Such standard shall also apply to any and all approvals, determinations, permissions, acceptances, requirements, or opinion made, given, imposed or reached by Lender.
(c)Representation to the Board. In addition to any other representations required by the Guarantee, the Applicant shall represent to the Board that it has the ability to, and will, administer the loan, as well as to exercise the Applicant's rights and pursue its remedies, including conducting any liquidation of the Security or additional Security in full compliance with the standard of care, without the need for any advice, opinion, determination, recommendation, approval, disapproval, assistance (financial or other) or participation by the Board, except where the Board's consent is expressly required by the Guarantee, or where the Board, in its sole discretion and pursuant to the Guarantee, elects to provide same.
(d)Covenants. With respect to any loan guaranteed by the Board pursuant to the Act and this part, the Lender shall require the Loan Documents to contain such affirmative and negative covenants by the Borrower as are required by the terms and conditions of the Guarantee, such as the prohibition on the payment of dividends.
(e)Monitoring. In accordance with the Guarantee the Lender shall monitor Borrower's performance under the Loan Documents to detect any noncompliance by the Borrower with any provision thereof.
(f)Reporting. With respect to any loan guaranteed by the Board pursuant to the Act and this part the Lender shall provide the Board with the following information, in accordance with the Guarantee:
(1)Financial statements for the borrower, as provided in the Guarantee;
(2)Projected balance sheet, income statement, and cash flows for the Borrower for each year remaining on the term of the loan; and
(3)A completed signed copy of Form "Quarterly Compliance Statement" that includes information on the recent performance of the loan, within 15 days of the end of each calendar quarter.
(g)Notices. All written notices, requests, or demands made to the Board shall be mailed to the Board at the U.S. Department of Commerce, H2500, Washington, DC 20230, except as otherwise specified by the Guarantee or as directed by the Board. Lender shall notify the Board in writing without delay of:
(1)Deterioration in the internal risk rating of a loan guaranteed under this Program within 5 business days of such action by the Lender;
(2)The occurrence of each event of default under the Loan Documents or Guarantee promptly, but not later than 5 business days, of the Lender's learning of such occurrence; and
(3)Any other notification requirements as provided by law, or by the terms of the Guarantee or Loan Documents. \[64 FR 57947, Oct. 27, 1999, as amended at 65 FR 24107, Apr. 25, 2000; 65 FR 51522, Aug. 24, 2000\]