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B-202568 1 (1981-09-11)

handle is hein.gao/gaobabkei0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. 20548 B-202568 September 11, 1981 The Honorable David Pryor United States Senate Dear Senator Pryor: This is in response to your request for our opinion as to the legality and propriety of certain actions taken by the Small Business Administration (SBA) in connection with its disaster loan program, including the total cut-off of funding for the disaster loan program and the reissuance of new regulations governing that program. In your letter to our Office, you expressed your concern with respect to farmers in Arkansas and other states that have been adversely affected by the revised regulations and the accompanying cut-off of funding. In this respect, your letter reads in pertinent part as follows: These farmers had met SBA's deadlines, filed their appli- cations in good faith and were assured by everyone they talked to, including local officials, that although approvals and funding might be a slow process, the money would even- tually be forthcoming to fund approved loans. * * * * * Now it appears that SBA is going to change their rules in the middle of the game and has drawn up new regulations which will impose a credit elsewhere test and limit loans to 60 percent of the verified loan amount. I would like the opinion of your office of the legality and propriety of SBA's actions both with respect to the total cut-off of the funding of these loans and the re- issuance of new regulations. Is the Government vulnerable to legal action by the farmers whose applications were not yet processed? Have proper procedures been followed for withholding this funding and for the issuance of the new regulations? In response to our request for its report on this matter, SBA explained its actions in connection with the questions you raise, as follows:

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