Yesterday, both the House and Senate overwhelmingly passed the Continuing Resolution (CR) [H.R. 9747] that would temporarily extend funding and authorization while negotiations continue on a FY25 full-year funding measure. The bill now heads to President Biden, who plans to sign it ahead of the midnight October 1 shutdown deadline.
The CR will fund the government at current FY24 levels through December 20, setting up the next round of negotiations on a full-year deal for just before the holidays.
Both the 7(a) Loan Program and the Secondary Market Guarantee Program (SMGP) will be fully operational during the CR, with authorization levels of $35 billion and $15 billion respectively, prorated to the number of days the CR is in effect.
Unfortunately, neither the 7(a) Loan Program or the SMGP received anomaly language in the CR that would have prevented the programs from being limited to daily caps in the programs’ respective authorization availability. Without anomaly language, while the CR is in effect, programs must operate within daily caps of either funding or authorization, which are derived from the daily prorated amount of total funding or authorization while the CR is in effect.
Given that the anomaly language was not included, NAGGL will be monitoring daily lending volume and monthly pooled sales as carefully as possible during the CR so that we can notify lenders and broker-dealers if there are any concerns in either of the programs that could cause a short-term pause in lending or pooled sales due to the potential of hitting a daily cap in authorization. If such a pause were to occur due to high loan volume or high volume of pooled sales on a given day, authority would resume the following day; however, we understand that this could cause disruptions and uncertainty for both lenders and borrowers.
NAGGL was disappointed to see that this important anomaly language was not included in this CR given that it provides critical stability for the loan programs. We have, and will continue to, advocate for the inclusion of this important measure in future CRs.
