Title 12, Banks and BankingRelease 119-110
§5707 Remedies for State Program Termination or Failures
Title 12 › CHAPTER 54 — STATE SMALL BUSINESS CREDIT INITIATIVE › § 5707
Summary
The Secretary may cut a State’s federal payments or stop any future transfers of money if one of three things happens: the State ends its participation in the program, the State fails to file complete reports on time, or the State does not follow its allocation agreement. If, after 13 months, any of that money is considered no longer allocated to the State, the Secretary must reallocate it to the other participating States under the program’s reallocation rules.
Full Legal Text
Title 12, §5707
Banks and Banking, Source: USLM XML via OLRC
(a)Remedies
(1)In general
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)Causal events
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)Deallocated amounts to be reallocated
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
Sep 22, 2026
Release point: 119-110