Partners (Winter 2000)

In the News

On December 22, 2000, the federal government appropriated $901.5 million for SBA agency programs, and provided funds for $10.4 billion in Section 7(a) guaranteed loans, $3.75 billion in Certified Development Company loans, and nearly $2.7 billion in venture capital assistance, including $152 million for the New Markets Venture Capital companies.

The popular SBA 7(a) General Business Loan Guaranty program will increase the guaranty percentage to 85% for loans up to $150,000, and simplify the guaranty fee structure. According to the SBA, "the New Markets Venture Capital (NMVC) program will combine venture capital investments with expert technical assistance to small businesses in low-income urban and rural areas. This will be the first time SBA has been able to provide funding for technical assistance in connection with a venture capital program."

"Under the new program, SBA will license 10-to-20 new NMVCs to invest in these small businesses, combining $152 million in SBA funding with $100 million in private sector funding to create an investment pool of more than $250 million. The bill also provides $30 million in matching funds to pay for technical assistance for small businesses."

The appropriation increased to $1 million the maximum loans under SBA 504 programs, and increased from $25,000 to $35,000 the maximum for loans under the SBA Microloan programs. It also authorized federal savings associations to invest in small business investment companies (SBICs), and increased the maximum size of surety bonds to $2 million.

For more information, visit the Small Business Administration web site at

First USA
First USA, Wilmington, Delaware, announced a proposed $40 million settlement to a class-action lawsuit that alleged it overcharged customers late fees and finance charges on credit card payments. The suit alleged that payments were made on time but the third party vendor used by First USA posted the payments to the accounts late, including those posted after a 6 a.m. arrival time on the due date. The settlement includes reimbursements for late fees (reportedly $29), for allegedly unwarranted finance charges, for duplicate payments made on accounts, and for other related problems.

First USA denies any wrongdoing, but offered a settlement to the U.S. District Court in East St. Louis, Illinois. The court will hold a hearing January 24, 2001, to determine whether to approve the settlement.

First USA is a subsidiary of Bank One Corporation, Chicago, Illinois and is the largest Visa credit card issuer in the world. In addition to the First USA card, the company offers Visa and MasterCard for consumers and businesses under Bank One and the First Card names, and on behalf of other marketing partners (such as universities, affinity organizations, and financial institutions). First USA reports serving approximately 55 million cardmembers, with total loans as of June 30, 2000, of $66.3 billion.

CRA Sunshine
On December 21, 2000, the federal regulators published final rules implementing the CRA sunshine provisions that were part of the Gramm-Leach-Bliley Act approved last year. These provisions require nonprofit organizations, advocacy groups, and other organizations known as "nongovernmental entities or persons" along with insured depository institutions and their affiliates to publicly disclose certain agreements that are made pursuant to, or in connection with, the fulfillment of the Community Reinvestment Act of 1977 (CRA). The regulations go into effect April 1, 2001.

Generally, the rules cover agreements that involve funds or other resources of an insured depository institution or affiliate with an aggregate value of more than $10,000 in a year, or loans with an aggregate principal value of more than $50,000 in a year.

On May 19, 2000, the federal regulatory agencies published a proposed regulation and solicited public comments. The agencies collectively received more than 800 comments from the public on the proposed rule, which they considered before adopting the final regulation.

For a complete copy of the regulation, visit the Federal Reserve Board web site at and click on Press Releases, Board Actions, and December 21, 2000.

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