15 U.S.C. § 650 — Supervisory and enforcement authority for

Page 1031 TITLE 15—COMMERCE AND TRADE § 650 ‘‘(1) the term ‘Associate Administrator’ means the Associate Administrator for International Trade ap- pointed under section 22(a)(2) of the Small Business Act [15 U.S.C. 649(a)(2)], as amended by this subtitle; ‘‘(2) the term ‘Export Assistance Center’ means a one-stop shop referred to in section 2301(b)(8) of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)); and ‘‘(3) the term ‘rural small business concern’ means a small business concern located in a rural area, as that term is defined in section 1393(a)(2) of the Inter- nal Revenue Code of 1986 [26 U.S.C. 1393(a)(2)].’’ [For definition of ‘‘small business concern’’ as used in section 1202(a) of Pub. L. 111–240, set out above, see sec- tion 1001 of Pub. L. 111–240, set out as a note under sec- tion 632 of this title.] § 649c. Authorization of appropriations At least one small business international pro- gram shall be established within each region of the Department of Commerce. There are author- ized to be appropriated to the Secretary $1,500,000 for each fiscal year 1981, 1982, and 1983, to carry out the program established in section 649b of this title. (Pub. L. 96–481, title III, § 303, Oct. 21, 1980, 94 Stat. 2332.) Editorial Notes CODIFICATION Section was not enacted as part of the Small Busi- ness Act which comprises this chapter. § 649d. Central information clearinghouse The Secretary through the International Trade Administration, shall, only to such extent and in such amounts as are provided in appro- priation Acts on and after October 1, 1980, main- tain a central clearinghouse to provide for the collection, dissemination, and exchange of infor- mation between programs established pursuant to sections 649a and 649b of this title, the Office of International Trade of the Small Business Ad- ministration, and other interested concerns. (Pub. L. 96–481, title III, § 304, Oct. 21, 1980, 94 Stat. 2333.) Editorial Notes CODIFICATION Section was not enacted as part of the Small Busi- ness Act which comprises this chapter. § 650. Supervisory and enforcement authority for small business lending companies (a) In general The Administrator is authorized— (1) to supervise the safety and soundness of small business lending companies and non- Federally regulated lenders; (2) with respect to small business lending companies to set capital standards to regu- late, to examine, and to enforce laws gov- erning such companies, in accordance with the purposes of this chapter; and (3) with respect to non-Federally regulated lenders to regulate, to examine, and to enforce laws governing the lending activities of such lenders under section 636(a) of this title in ac- cordance with the purposes of this chapter. (b) Capital directive (1) In general If the Administrator determines that a small business lending company is being oper- ated in an imprudent manner, the Adminis- trator may, in addition to any other action authorized by law, issue a directive to such company to increase capital to such level as the Administrator determines will result in the safe and sound operation of such company. (2) Delegation The Administrator may not delegate the au- thority granted under paragraph (1) except to an Associate Deputy Administrator. (3) Regulations The Administrator shall issue regulations outlining the conditions under which the Ad- ministrator may determine the level of capital pursuant to paragraph (1). (c) Civil action If a small business lending company violates this chapter, the Administrator may institute a civil action in an appropriate district court to terminate the rights, privileges, and franchises of the company under this chapter. (d) Revocation or suspension of loan authority (1) The Administrator may revoke or suspend the authority of a small business lending com- pany or a non-Federally regulated lender to make, service or liquidate business loans au- thorized by section 636(a) of this title— (A) for false statements knowingly made in any written submission required under this chapter; (B) for omission of a material fact from any written submission required under this chap- ter; (C) for willful or repeated violation of this chapter; (D) for willful or repeated violation of any condition imposed by the Administrator with respect to any application, request, or agree- ment under this chapter; or (E) for violation of any cease and desist order of the Administrator under this section. (2) The Administrator may revoke or suspend authority under paragraph (1) only after a hear- ing under subsection (f). The Administrator may delegate power to revoke or suspend authority under paragraph (1) only to the Deputy Adminis- trator and only if the Administrator is unavail- able to take such action. (A) The Administrator, after finding ex- traordinary circumstances and in order to pro- tect the financial or legal position of the United States, may issue a suspension order without conducting a hearing pursuant to sub- section (f). If the Administrator issues a sus- pension under the preceding sentence, the Ad- ministrator shall within two business days fol- low the procedures set forth in subsection (f). (B) Any suspension under paragraph (1) shall remain in effect until the Administrator makes a decision pursuant to subparagraph (4) to permanently revoke the authority of the small business lending company or non-Feder- ally regulated lender, suspend the authority Page 1032 TITLE 15—COMMERCE AND TRADE § 650 for a time certain, or terminate the suspen- sion. (3) The small business lending company or non-Federally regulated lender must notify bor- rowers of a revocation and that a new entity has been appointed to service their loans. The Ad- ministrator or an employee of the Administra- tion designated by the Administrator may pro- vide such notice to the borrower. (4) Any revocation or suspension under para- graph (1) shall be made by the Administrator ex- cept that the Administrator shall delegate to an administrative law judge as that term is used in section 3105 of title 5 the authority to conduct any hearing required under subsection (f). The Administrator shall base the decision to revoke on the record of the hearing. (e) Cease and desist order (1) Where a small business lending company, a non-Federally regulated lender, or other person violates this chapter or is engaging or is about to engage in any acts or practices which con- stitute or will constitute a violation of this chapter, the Administrator may order, after the opportunity for hearing pursuant to subsection (f), the company, lender, or other person to cease and desist from such action or failure to act. The Administrator may delegate the au- thority under the preceding sentence only to the Deputy Administrator and only if the Adminis- trator is unavailable to take such action. (2) The Administrator, after finding extraor- dinary circumstances and in order to protect the financial or legal position of the United States, may issue a cease and desist order without con- ducting a hearing pursuant to subsection (f). If the Administrator issues a cease and desist order under the preceding sentence, the Admin- istrator shall within two business days follow the procedures set forth in subsection (f). (3) The Administrator may further order such small business lending company or non-Feder- ally regulated lender or other person to take such action or to refrain from such action as the Administrator deems necessary to insure com- pliance with this chapter. (4) A cease and desist order under this sub- section may also provide for the suspension of authority to lend in subsection (d). (f) Procedure for revocation or suspension of loan authority and for cease and desist order (1) Before revoking or suspending authority under subsection (d) or issuing a cease and de- sist order under subsection (e), the Adminis- trator shall serve an order to show cause upon the small business lending company, non-Feder- ally regulated lender, or other person why an order revoking or suspending the authority or a cease and desist order should not be issued. The order to show cause shall contain a statement of the matters of fact and law asserted by the Ad- ministrator and the legal authority and jurisdic- tion under which a hearing is to be held, and shall set forth that a hearing will be held before an administrative law judge at a time and place stated in the order. Such hearing shall be con- ducted pursuant to the provisions of sections 554, 556, and 557 of title 5. If after hearing, or a waiver thereof, the Administrator determines that an order revoking or suspending the au- thority or a cease and desist order should be issued, the Administrator shall promptly issue such order, which shall include a statement of the findings of the Administrator and the grounds and reasons therefor and specify the ef- fective date of the order, and shall cause the order to be served on the small business lending company, non-Federally regulated lender, or other person involved. (2) Witnesses summoned before the Adminis- trator shall be paid by the party at whose in- stance they were called the same fees and mile- age that are paid witnesses in the courts of the United States. (3) A cease and desist order, suspension or rev- ocation issued by the Administrator, after the hearing under this subsection is final agency ac- tion for purposes of chapter 7 of title 5. An ad- versely aggrieved party shall have 20 days from the date of issuance of the cease and desist order, suspension or revocation, to seek judicial review in an appropriate district court. (g) Removal or suspension of management offi- cial (1) Definition In this section, the term ‘‘management offi- cial’’ means, with respect to a small business lending company or a non-Federally regulated lender, an officer, director, general partner, manager, employee, agent, or other partici- pant in the management of the affairs of the company’s or lender’s activities under section 636(a) of this title. (2) Removal of management official (A) Notice The Administrator may serve upon any management official a written notice of its intention to remove that management offi- cial if, in the opinion of the Administrator, the management official— (i) willfully and knowingly commits a substantial violation of— (I) this chapter; (II) any regulation issued under this chapter; (III) a final cease-and-desist order under this chapter; or (IV) any agreement by the manage- ment official, the small business lending company or non-Federally regulated lender under this chapter; or (ii) willfully and knowingly commits a substantial breach of a fiduciary duty of that person as a management official and the violation or breach of fiduciary duty is one involving personal dishonesty on the part of such management official. (B) Contents of notice A notice under subparagraph (A) shall con- tain a statement of the facts constituting grounds therefor and shall fix a time and place at which a hearing, conducted pursu- ant to sections 554, 556, and 557 of title 5, will be held thereon. (C) Hearing (i) Timing A hearing under subparagraph (B) shall be held not earlier than 30 days and later Page 1033 TITLE 15—COMMERCE AND TRADE § 650 than 60 days after the date of service of no- tice of the hearing, unless an earlier or a later date is set by the Administrator at the request of— (I) the management official, and for good cause shown; or (II) the Attorney General. (ii) Consent Unless the management official appears at a hearing under this paragraph in per- son or by a duly authorized representative, the management official shall be deemed to have consented to the issuance of an order of removal under subparagraph (A). (D) Order of removal (i) In general In the event of consent under subpara- graph (C)(ii), or if upon the record made at a hearing under this subsection, the Ad- ministrator finds that any of the grounds specified in the notice of removal has been established, the Administrator may issue such orders of removal from office as the Administrator deems appropriate. (ii) Effectiveness An order under clause (i) shall— (I) take effect 30 days after the date of service upon the subject small business lending company or non-Federally regu- lated lender and the management official concerned (except in the case of an order issued upon consent as described in sub- paragraph (C)(ii), which shall become ef- fective at the time specified in such order); and (II) remain effective and enforceable, except to such extent as it is stayed, modified, terminated, or set aside by ac- tion of the Administrator or a reviewing court in accordance with this section. (3) Authority to suspend or prohibit participa- tion (A) In general In order to protect a small business lend- ing company, a non-Federally regulated lender or the interests of the Administration or the United States, the Administrator may suspend from office or prohibit from further participation in any manner in the manage- ment or conduct of the affairs of a small business lending company or a non-Feder- ally regulated lender a management official by written notice to such effect served upon the management official. Such suspension or prohibition may prohibit the management official from making, servicing, reviewing, approving, or liquidating any loan under sec- tion 636(a) of this title. (B) Effectiveness A suspension or prohibition under subpara- graph (A)— (i) shall take effect upon service of no- tice under paragraph (2); and (ii) unless stayed by a court in pro- ceedings authorized by subparagraph (C), shall remain in effect— (I) pending the completion of the ad- ministrative proceedings pursuant to a notice of intention to remove served under paragraph (2); and (II) until such time as the Adminis- trator dismisses the charges specified in the notice, or, if an order of removal or prohibition is issued against the man- agement official, until the effective date of any such order. (C) Judicial review of suspension prior to hearing Not later than 10 days after a management official is suspended or prohibited from par- ticipation under subparagraph (A), the man- agement official may apply to an appro- priate district court for a stay of the suspen- sion or prohibition pending the completion of the administrative proceedings pursuant to a notice of intent to remove served upon the management official under paragraph (2). (4) Authority to suspend on criminal charges (A) In general If a management official is charged in any information, indictment, or complaint au- thorized by a United States attorney, with a felony involving dishonesty or breach of trust, the Administrator may, by written notice served upon the management official, suspend the management official from office or prohibit the management official from further participation in any manner in the management or conduct of the affairs of the small business lending company or non-Fed- erally regulated lender. (B) Effectiveness A suspension or prohibition under subpara- graph (A) shall remain in effect until the in- formation, indictment, or complaint is fi- nally disposed of, or until terminated by the Administrator or upon an order of a district court. (C) Authority upon conviction If a judgment of conviction with respect to an offense described in subparagraph (A) is entered against a management official, then at such time as the judgment is not subject to further judicial review (and for purposes of this subparagraph shall not include any petition for a writ of habeas corpus), the Ad- ministrator may issue and serve upon the management official an order removing the management official, effective upon service of a copy of the order upon the small busi- ness lending company or non-Federally regu- lated lender. (D) Authority upon dismissal or other dis- position A finding of not guilty or other disposition of charges described in subparagraph (A) shall not preclude the Administrator from instituting proceedings under subsection (e) or (f). (5) Notification to small business lending com- pany or a non-Federally regulated lender Copies of each notice required to be served on a management official under this section shall also be served upon the small business Page 1034 TITLE 15—COMMERCE AND TRADE § 651 1 So in original. There is no subsec. (f)(4) or (g)(6)(C) in this sec- tion. lending company or non-Federally regulated lender involved. (6) Final agency action and judicial review (A) Issuance of orders After a hearing under this subsection, and not later than 30 days after the Adminis- trator notifies the parties that the case has been submitted for final decision, the Ad- ministrator shall render a decision in the matter (which shall include findings of fact upon which its decision is predicated), and shall issue and cause to be served upon each party to the proceeding an order or orders consistent with this section. The decision of the Administrator shall constitute final agency action for purposes of chapter 7 of title 5. (B) Judicial review An adversely aggrieved party shall have 20 days from the date of issuance of the order to seek judicial review in an appropriate dis- trict court. (h) Appointment of receiver (1) In any proceeding under subsection (f)(4) or subsection (g)(6)(C),1 the court may take exclu- sive jurisdiction of a small business lending company or a non-Federally regulated lender and appoint a receiver to hold and administer the assets of the company or lender. (2) Upon request of the Administrator, the court may appoint the Administrator as a re- ceiver under paragraph (1). (i) Possession of assets (1) If a small business lending company or a non-Federally regulated lender is not in compli- ance with capital requirements or is insolvent, the Administrator may take possession of the portfolio of loans guaranteed by the Adminis- trator and sell such loans to a third party by means of a receiver appointed under subsection (h). (2) If a small business lending company or a non-Federally regulated lender is not in compli- ance with capital requirements or is insolvent or otherwise operating in an unsafe and unsound condition, the Administrator may take posses- sion of servicing activities of loans that are guaranteed by the Administrator and sell such servicing rights to a third party by means of a receiver appointed under subsection (h). (j) Penalties and forfeitures (1) Except as provided in paragraph (2), a small business lending company or a non-Federally regulated lender which violates any regulation or written directive issued by the Administrator regarding the filing of any regular or special re- port shall pay to the United States a civil pen- alty of not more than $5,000 for each day of the continuance of the failure to file such report, unless it is shown that such failure is due to rea- sonable cause and not due to willful neglect. The civil penalties under this subsection may be en- forced in a civil action brought by the Adminis- trator. The penalties under this subsection shall not apply to any affiliate of a small business lending company that procures at least 10 per- cent of its annual purchasing requirements from small manufacturers. (2) The Administrator may by rules and regu- lations that shall be codified in the Code of Fed- eral Regulations, after an opportunity for notice and comment, or upon application of an inter- ested party, at any time previous to such fail- ure, by order, after notice and opportunity for hearing which shall be conducted pursuant to sections 554, 556, and 557 of title 5, exempt in whole or in part, any small business lending company or non-Federally regulated lender from paragraph (1), upon such terms and conditions and for such period of time as it deems nec- essary and appropriate, if the Administrator finds that such action is not inconsistent with the public interest or the protection of the Ad- ministration. The Administrator may for the purposes of this section make any alternative requirements appropriate to the situation. (Pub. L. 85–536, § 2[23], as added Pub. L. 98–473, title I, § 111A(a), Oct. 12, 1984, 98 Stat. 1965; Pub. L. 108–447, div. K, title I, § 161, Dec. 8, 2004, 118 Stat. 3458.) Editorial Notes PRIOR PROVISIONS A prior section 650, acts July 30, 1953, ch. 282, title II, § 221, 67 Stat. 240; June 30, 1955, ch. 251, § 4, 69 Stat. 225; Aug. 9, 1955, ch. 628, § 13, 69 Stat. 551; Pub. L. 85–120, § 2, Aug. 3, 1957, 71 Stat. 341, provided for a termination date of the Small Business Act of 1953, and was omitted from the general revision by Pub. L. 85–536. See Codi- fication note set out under section 631 of this title. AMENDMENTS 2004—Pub. L. 108–447 amended section catchline and text generally. Prior to amendment, text related to dis- aster loan assistance to small business concerns in the fishing industry due to El Nino-related ocean condi- tions. § 651. National small business tree planting pro- gram (a) Authorization of grants and contracts with States The Administrator is authorized to make grants to or to enter into contracts with any State for the purpose of contracting with small businesses to plant trees on land owned or con- trolled by such State or local government. The Administrator shall require as a condition of any grant (or amendment or modification there- of) under this section that the applicant also contribute to the project a sum equal to at least 25 per centum of a particular project cost from sources other than the Federal Government. Such non-Federal money may include inkind contributions, including the cost or value of pro- viding care and maintenance for a period of three years after the planting of the trees, but shall not include any value attributable to the land on which the trees are to be planted, nor may any part of any grant be used to pay for land or land charges: Provided, That not less than one-half of the amounts appropriated under this section shall be allocated to each State, the District of Columbia, and the Commonwealth of