[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR113.7]

[Page 152-153]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 113--NONDISCRIMINATION IN FINANCIAL ASSISTANCE PROGRAMS OF SBA--EFFECTUATION OF POLICIES OF FEDERAL GOVERNMENT AND SBA ADMINISTRATOR--Table of Contents
 
                      Subpart A--General Provisions
 
Sec. 113.7  Procedure for effecting compliance.

    (a) General. (1) If there appears to be a failure or threatened 
failure to comply with this part and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by suspending, terminating, or refusing any 
financial assistance approved but not yet disbursed to an applicant. In 
the case of loans partially or fully disbursed, compliance with this 
part may be effected by calling, canceling, terminating, accelerating 
repayment, or suspending in whole or in part the financial assistance 
provided. In addition compliance may be effected by any other means 
authorized by law.
    (2) Such other means may include but are not limited to (i) legal 
action by SBA to enforce its rights, embodied in the assurances 
described in Sec. 113.4; (ii) a reference to the Department of Justice 
with a recommendation that appropriate proceedings be brought to enforce 
any rights of the United States under any law of the United States; and 
(iii) any applicable proceedings under State or local law.
    (b) Noncompliance with Sec. 113.4. If an applicant fails or refuses 
to furnish an assurance required under Sec. 113.4 or otherwise fails or 
refuses to comply with a requirement imposed by or pursuant to that 
section, Federal financial assistance may be refused in accordance with 
the procedures of paragraph (c) of this section. SBA shall not be 
required to provide assistance in such a case during the pendency of the 
administrative proceedings under such paragraph except that SBA shall 
continue assistance during the pendency of such proceedings where such 
assistance is due and payable pursuant to an application therefor 
approved prior to the effective date of this part. Such proceedings 
shall be conducted in accordance with the provisions of part 134 of this 
chapter by an Administrative Law Judge of the Office of Hearings and 
Appeals, who shall issue an initial decision in the case. The 
Admininstrator shall be the reviewing official for purposes of 
Sec. 134.228. The applicant's failure to file a timely motion in 
accordance with Secs. 134.222 and 134.211, requesting that the matter be 
scheduled for an oral hearing, shall constitute waiver of the right to 
an oral hearing but shall not prevent the submission of written 
information and argument for the record in accordance with the 
provisions of part 134.
    (c) Condition precedent. Under this part 113, no order suspending, 
terminating, refusing, calling, canceling, or accelerating repayment of 
financial assistance in whole or in part shall become effective until 
(1) SBA has advised the applicant or recipient of his failure to comply 
and has determined that compliance cannot be secured by voluntary means; 
(2) there has been an express finding on the record after an opportunity 
for an oral hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part; and (3) 
the initial decision has become final pursuant to Sec. 134.227(b).
    (d) Other means authorized by law. No action to effect compliance by 
any other means authorized by law shall be taken until:
    (1) SBA has determined that compliance cannot be secured by 
voluntary means.

[[Page 153]]

    (2) The action has been approved by the Administrator or the 
Administrator's designee.
    (3) The applicant or recipient or other person has been notified of 
its failure to comply and of the action to be taken to effect 
compliance.
    (4) The expiration of at least 10 days from the mailing of such 
notice to the applicant or recipient or other person. During this period 
of at least 10 days, additional efforts shall be made to persuade the 
applicant or recipient or other person to comply with this part and to 
take such corrective action as may be appropriate.

[44 FR 20068, Apr. 4, 1979, as amended at 49 FR 33629, Aug. 24, 1984; 61 
FR 2691, Jan. 29, 1996]