(c) The Board is authorized to prescribe regulations governing the operations of national investment companies and to carry out the provisions of this title in accordance with the purposes of this Act. Each national investment company shall be subject to examinations made by direction of the Board by examiners selected or approved by the Board, and the cost of such examinations, including the compensation of the examiners, may in the discretion of the Board be assessed against the company examined and when so assessed shall be paid by such company. Every such company shall make such reports to the Board at such times and in such form as the Board may require.

(d) The Secretary of Commerce is authorized to advise and assist in promoting national investment companies.

(e) Should any national investment company violate or fail to comply with any of the provisions of this title or of regulations prescribed hereunder, all of its rights, privileges, and franchises derived herefrom may thereby be forfeited. Before any such company shall be declared dissolved, or its rights, privileges, and franchises forfeited, any noncompliance with or violation of this title shall, however, be determined and adjudged by a court of the United States of competent jurisdiction in a suit brought for that purpose in the district or territory in which the principal office of such company is located, which suit shall be brought by the United States at the instance of the Board or the Attorney General.

(f) Whenever in the judgment of the Board any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this title or of any regulation thereunder, the Board may make application to the proper district court of the United States, or the United States courts of any Territory or other place subject to the jurisdiction of the United States, for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and such courts shall have jurisdiction of such actions and upon a showing by the Board that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.

(g) Any national investment company may at any time within the two years next previous to the date of the expiration of its corporate existence, by a vote of the shareholders owning two-thirds of its stock, apply to the Board for approval to extend the period of its corporate existence for a term of not more than thirty years, and upon approval of the Board as provided in section 101 hereof such company shall have its corporate existence extended for such period unless sooner dissolved by the act of the shareholders owning two-thirds of its stock, or by an Act of Congress or unless its franchise becomes forfeited as herein provided.

(h) Nothing in this Act or in any other provision of law shall be deemed to impose any liability on the United States or on any Federal Reserve bank with respect to any obligations entered into, or stocks issued, or commitments made, by any company organized under this title.

TITLE II-CHANGES IN FEDERAL RESERVE AUTHORITY

REPEAL OF SECTION 13B OF THE FEDERAL RESERVE ACT

SEC. 201. Effective one year after the date of enactment of this Act, section 13b of the Federal Reserve Act (12 U. S. C. 352a) is hereby repealed; but such repeal shall not affect the power of any Federal Reserve bank to carry out, or protect its interest under, under agreement theretofore made or transaction entered into in carrying on operations under that section.

RETURN OF FUNDS TO TREASURY

SEC. 202. (a) Within sixty days after the enactment of this Act, each Federal Reserve bank shall pay to the United States the aggregate amount which the Secretary of the Treasury has heretofore paid to such bank under the provisions of section 13b of the Federal Reserve Act; and such payment shall constitute a full discharge of any obligation or liabiilty of the Federal bank to the United States or to the Secretary of the Treasury arising out of subsection (e) of said section 13b or out of any agreement thereunder.

(b) The amounts repaid to the United States pursuant to section 202, and any remaining balance of the funds set aside in the Treasury for payments under section 13b of the Federal Reserve Act shall be covered into miscellaneous receipts.

AUTHORITY TO SELL ASSETS TO NATIONAL INVESTMENT COMPANIES

SEC. 203. Any national investment company organized under this act may purchase from any Federal Reserve bank, and any Federal Reserve bank is authorized to sell to any such company, at such reasonable price as may be agreed upon, any or all of the assets heretofore or hereafter acquired by such Reserve bank under the provisions of section 13b of the Federal Reserve Act.

TITLE III-MISCELLANEOUS PROVISIONS

PENALTIES

SEC. 301. Title 18, United States Code, section 1014, is amended by inserting the phrase "a national investment company organized under title II of the National Investment Company Act of 1957," after the words "National farm loan association,".

GEOGRAPHIC APPLICABILITY

SEC. 302. The authority provided in this Act shall be applicable in the United States, including the District of Columbia and the Territories and possessions.

RIGHT TO AMEND THIS ACT

SEC. 303. The right to amend, alter, or repeal this Act is hereby expressly reserved.

AUTHORIZATION OF APPROPRIATIONS

SEC. 304. There are hereby authorized to be appropriated such sums as may be required to carry out the purposes of this Act.

[S. 720, 85th Cong., 1st sess.]

A BILL To make credit more readily available for financing small business by insuring loans made to small business enterprises

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE

SECTION 1. This Act may be cited as the "Small Business Credit Act of 1957".

DECLARATION OF POLICY

SEC. 2. It is the policy of the Congress

(a) to foster the development and growth of independent small-business enterprises with the objective of enabling them to make their maximum contribution to productive investment and employment and to the economic stability and growth of the Nation;

(b) to make credit for such enterprises more readily available in adequate amounts and on reasonable terms; and

(c) to facilitate maximum participation of private financial institutions and investors in financing these enterprises by insuring loans which are made by private lending institutions to small business.

TITLE I-INSURANCE OF LOANS FOR SMALL BUSINESS

AUTHORITY TO INSURE

SEC. 101. The Administrator of the Small Business Administration (hereafter referred to in this Act as the Administrator) is authorized upon such terms and conditions as he may prescribe to insure such lenders as he finds to be qualified by experience or facilities and approves as eligible for credit insurance against loss of principal and interest which may be sustained by them as a result of loans made to small-business enterprises. Such a lender is hereinafter referred to as an "approved lender".

OVERALL LIMIT OF INSURANCE

SEC. 102. The aggregate principal amount of loans with respect to which insurance may be granted under this title shall not exceed $250,000,000 outstanding

at any one time: Provided, That on or after July 1, 1958, the President may increase this limit to not more than $750,000,000.

SCOPE OF INSURANCE AND INSURANCE RESERVE

SEC. 103. The insurance granted under this title shall provide for the reimbursement of losses to any approved lender and which reimbursement shall not exceed the lesser of—

(a) 90 per centum of the unpaid balance of any loan, including accrued interest at the time of default;

(b) the insurance reserve of the insured lender on the date the claim for reimbursement of loss is approved for payment.

The insurance reserve of each lender shall be initially computed as 10 per centum of the total amount of loans on which premiums have been paid and shall be diminished by the amount of claims approved for payment. The insurance reserve, if any, to the credit of any lender may, from time to time, be further diminished, but only pursuant to the contract between the Administrator and such insured lender.

MAXIMUM PREMIUM CHARGE

SEC. 104. The Administrator shall fix a premium charge for the insurance granted under this title in an amount not to exceed 11⁄2 per centum per annum of the principal amount of each loan, payable in advance, at such time and in such manner as he may prescribe.

TYPE OF LOAN COVERED

SEC. 105. (a) Insurance granted under this title shall provide for the reimbursement of losses only with respect to loans bearing such interest, having such maturities, and subject to such other terms and conditions as required in accordance with regulations prescribed by the Administrator in force at the time the insurance is granted.

(b) No further insurance shall be granted under this title with respect to any borrower if the total outstanding amount of all loans of such borrowers insured under this title would thereby exceed $250,000, or with respect to any loan whose maturity is in excess of five years and thirty-two days.

(c) No insurance shall be granted under this title for any loan for agricultural purposes, as determined in accordance with regulations issued by the Administrator after consultation with the Secretary of Agriculture, or with respect to any loan which is eligible to be insured under the National Housing Act, as amended.

(d) Any loan with respect to which insurance is granted under this title may be refinanced or extended with continued protection under this title in accordance with such regulations as the Administrator may prescribe: Provided, That the amount or unexpired term of any such loan shall not be in excess of the limitations contained in paragraph (b) of this section.

TRANSFER OF INSURANCE BETWEEN INSTITUTIONS

SEC. 106. The Administrator, under such regulations as he may prescribe, may permit the transfer to any approved lender any insurance in connection with loans which such lender wishes to purchase from another approved lender.

REVOLVING FUND

SEC. 107. (a) The premiums and other moneys received by the Administrator in the course of operations under this title shall be deposited in a revolving fund in the Treasury of the United States. The revolving fund shall be available for defraying the operating expenses incurred under this title, and for the payment of claims in connection with the insurance granted under this title. (b) For the purposes of carrying out the provisions of this title, there are hereby authorized to be appropriated to the revolving fund provided in this section

(1) the sum of $10,000,000 for the initial establishment of the revolving fund; and

(2) such further sums, if any, as may become necessary for the adequacy of the revolving fund.

(c) The Administrator shall pay annually into the Treasury, as miscellaneous. receipts, interest on any sums appropriated to the revolving fund which have not been repaid into the Treasury as provided in subsection (d). The Secretary of the Treasury shall determine the interest rate annually in advance, such rate to be calculated to reimburse the Treasury for its costs in connection with such appropriated funds, taking into consideration the current average interest rate which the Treasury pays upon its marketable obligations.

(d) At least annually any balance in the revolving fund in excess of an amount determined by the Administrator to be necessary for requirements of the fund, and for reasonable reserves to maintain the solvency of the fund, shall be paid into the Treasury as miscellaneous receipts, and any outstanding balance in the amounts appropriated to the revolving fund shall be reduced by the same amount.

(e) The Administrator, with the approval of the Secretary of the Treasury, may invest and reinvest such portions of the revolving fund as he may determine to be in excess of current needs in any interest-bearing securities of the United States or in any securities guaranteed as to principal and interest by the United States, and the income therefrom shall constitute a part of the revolving fund. (f) The financial transactions, accounts, books and records of the Administrator pertaining to the revolving fund shall be audited on an annual basis by the General Accounting Office and a copy of each report on the audit shall be furnished to the President, the Congress, and the Administrator.

EXEMPTION FROM SECTION 24 OF THE FEDERAL RESERVE ACT

SEC. 108. Loans made by national banks with respect to which insurance is granted under this title shall be exempt from the provisions of section 24 of the Federal Reserve Act (12 U. S. C. 371) relating to real estate loans.

ADMINISTRATIVE PROVISIONS

SEC. 109. In the performance of, and with respect to, functions, powers, and duties vested in him by this title, the Administrator, notwithstanding the provisions of any other law, may

(a) sue and be sued in any court of record of a State having general jurisdiction, or in any United States district court, and jurisdiction, is conferred upon such district court to determine such controversies without regard to the amount in controversy: Provided, That no attachment, injunctions, garnishment, or other similar process, mesne or final, shall be issued against the Administrator or his property;

(b) under regulation prescribed by him assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and for such consideration as he shall determine to be reasonable, any evidence of debt contract, claim, personal property, or security assigned to or held by him in connection with the payment of insurance heretofore or hereafter granted under this Act, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such insurance, until such time as any such obligation may be referred to the Attorney General for suit or collection;

(c) deal with, complete, renovate, improve, modernize, insure, or rent, or sell for cash or credit upon such terms and conditions as he shall determine to be reasonable, any real property conveyed to or otherwise acquired by him in connection with the payment of insurance granted under this Act; (d) pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Administrator in connection with real property by way of deficiency or otherwise. Section 3709 of the Revised Statutes, as amended (41 U. S. C. 5), shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of such property if the premium therefor or the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Administrator deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein 93527-57

2

heretofore or hereafter acquired by the Administrator pursuant to the provisions of this Act may be exercised by the Administrator or by an officer or agent appointed by him without the execution of any express delegation of power or power of attorney. Nothing in this section shall be construed to prevent the Administrator from delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint; (e) acquire, in any lawful manner, any property (real, personal, or mixed, tangible or intangible), whenever deemed necessary or appropriate to the conduct of the activities authorized in this title.

TITLE II-MISCELLANEOUS PROVISIONS

DELEGATION OF AUTHORITY

SEC. 201. The functions of the Administrator under this act shall be performed by him or, subject to his direction and control, by such officers, agencies, or corporations of the Government, if any, which are under his supervision, as he may designate.

COORDINATION WITH ECONOMIC AND FISCAL POLICIES

SEC. 202. The President may, at any time or times, reduce, for such periods as he shall specify, the maximum authorized principal amounts, maximum maturities, or maximum percentage of Federal insurance or participation of any type or types of loans for business which thereafter may be made, insured, or guaranteed by any department, independent establishment, or agency in the executive branch, or by any wholly owned Government corporation as defined in the Government Corporation Control Act, upon a determination, after taking into consideration the effect thereof upon general economic conditions and upon the national economy, that such action is necessary or desirable to coordinate the business-aid functions and activities of the Federal Government with its general economic and fiscal policies.

ELIGIBLE ENTERPRISES

SEC. 203. In connection with administering this Act, the Administrator shall establish such classifications of small-business enterprises, for eligibility for loans with respect to which insurance under this Act may be granted, as he deems appropriate. Such classifications may relate to types of business and industry groupings eligible and also as to the eligibility of borrowers to be regarded as small business. For the latter purpose, a small-business concern shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation.

AUTHORITY TO PROMULGATE AND WAIVE REGULATIONS

SEC. 204. (a) The Administrator may make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this Act. Any such rule or regulation issued under this Act may contain such classifications and differentiations and may provide for such adjustments and reasonable exceptions as in the judgment of the Administrator are necessary or proper in order to effectuate the purposes of this Act.

(b) The Administrator is authorized to waive compliance with any such rules and regulations if, in his judgment, they have been substantially complied with in good faith and where in his opinion such waiver would not be in derogation of the interest of the Government.

ADMINISTRATIVE PROVISIONS

SEC. 205. In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act, the Administrator, notwithstanding the provisions of any other law, may

(a) prepare and disseminate information concerning the activities undertaken under this Act; and

(b) enter into contracts.