Title 12 — Banks and BankingRelease 119-73

§5707 Remedies for State program termination or failures

Title 12 › Chapter CHAPTER 54— - STATE SMALL BUSINESS CREDIT INITIATIVE › § 5707

Last updated Apr 6, 2026|Official source

Summary

The Secretary may cut a State’s federal payments or stop future transfers if one of three things happens: the State quits the program, the State does not send the required complete reports on time, or the State breaks the allocation agreement with the Secretary. If, after 13 months, any of that State’s allocated money is treated by the Secretary as no longer allocated because of those actions, the Secretary must reassign that money to the other participating States under section 5702(b), leaving out the State that lost its funds.

Full Legal Text

Title 12, §5707

Banks and Banking — Source: USLM XML via OLRC

(a)(1)If any of the events listed in paragraph (2) occur, the Secretary, in the Secretary’s discretion, may—

(A)reduce the amount of Federal funds allocated to the State under the Program; or

(B)terminate any further transfers of allocated amounts that have not yet been transferred to the State.

(2)The events referred to in paragraph (1) are—

(A)termination by a participating State of its participation in the Program;

(B)failure on the part of a participating State to submit complete reports under section 5706 of this title on a timely basis; or

(C)noncompliance by the State with the terms of the allocation agreement between the Secretary and the State.

(b)If, after 13 months, any portion of the amount of Federal funds allocated to a participating State is deemed by the Secretary to be no longer allocated to the State after actions taken by the Secretary under subsection (a)(1), the Secretary shall reallocate that portion among the participating States, excluding the State whose allocated funds were deemed to be no longer allocated, as provided in section 5702(b) of this title.

Reference

Citations & Metadata

Citation

12 U.S.C. § 5707

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73