Title 12 — Banks and BankingRelease 119-73not60
§5707 Remedies for State Program Termination or Failures
Title 12 › Chapter 54— STATE SMALL BUSINESS CREDIT INITIATIVE › § 5707
Summary
The Secretary may lower a state's federal payments or stop future transfers if the state quits the program, fails to send complete reports on time, or breaks the allocation agreement. If, after 13 months, any of those funds are treated as taken back, the Secretary must reassign that money to the other participating states (not the punished state) under the rules in section 5702(b).
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 3, 2026
Release point: 119-73not60