A Blog to Nowhere (being totally irrelevant but, perhaps, interesting reading)

Here is a blog entry that will have absolutely no relevance to the vast majority of banks about a form that very few Compliance Officers will ever search for in their loan files. Yet, perhaps you’ll find this interesting nonetheless. The form I mention is the Small Business Jobs Act Certification, and I mention it only because, as General Counsel for American Bank Systems, I learned about this form while adding it to our new CompliancePro® Loans system.

The certification form is required when a community bank, participating in the Small Business Lending Fund (SBLF), makes a small business loan. The SBLF is a source of capital created by the Small Business Jobs Act of 2010 to encourage community banks to make loans to small businesses. The sole purpose of the certification form is to document that none of the principals of the borrower receiving funds under the SBLF have been convicted of, or pleaded nolo contender to, a sex offense against a minor.

Now, don’t get me wrong, I am completely in favor of not loaning taxpayer money to any business run by a sex offender. But I find it interesting that, somewhere in the making of the legislation that was intended to jolt the Nation’s lagging economy, some Congress member read the bill and thought to himself or herself, “A $30 billion fund to encourage lending to small business will help put our economy back on track. Great! But wait! No funds for sex offenders!”

Again, I think that’s a good thing. It just strikes me as odd that something like that would be so important to a member of Congress in the midst of a national debate about what our economy needs. It also strikes me as odd that not all sex offenders are excluded from receiving funds; apparently Congress was not as concerned about lending to persons who commit a sex offense against an adult.

By the way, if you are a Compliance Officer and your bank is one of the few that participated in this program, you have to certify annually that the principals of the businesses that received loans are not sex offenders of the ilk described. And if you have to make such an annual certification, wouldn’t you be glad to have the borrower certification form in your loan system?