Delegated authority

(a) Purpose. FSA may delegate authority for certain portions of the guaranteed loan process to qualified guaranteed lenders. This allows the lender to certify compliance with those pre-determined aspects of the guaranteed loan process without the need for a more detailed review by the Agency.

(b) Scope. Delegated authority is only applicable for those portions of the guaranteed loan process specifically identified within this part.

(c) Eligibility. (1) All lenders that hold PLP status will receive and exercise delegated authority as outlined in this section.

(2) Delegated authority will be granted to PLP lenders for a period not to exceed the expiration date of their PLP lender's agreement.

(3) Delegated authority will be conditioned upon the lender carrying out its authority in accordance with their agreement with the Agency and credit management system.

(d) Renewal of delegated authority. (1) Delegated authority will expire on the expiration date of the lender's PLP agreement unless delegated authority is otherwise revoked according to paragraph (e) of this section.

(2) Renewal of delegated authority is not automatic and is conditioned upon the renewal of the lender's PLP status.

(e) Revocation of delegated authority. FSA may revoke a lender's delegated authority at any time for any of the following reasons:

(1) Approving loans that do not meet the Agency's requirements for eligibility, financial feasibility, and loan security;

(2) Failure to maintain any of the eligibility requirements in this section;

(3) Knowingly submitting false or misleading information to the Agency;

(4) Basing a request on information known to be false;

(5) Failure to maintain PLP lender eligibility requirements in § 762.106(c);

(6) Unacceptable portfolio performance as evidenced by delinquency, losses, material deficiencies, or any other performance metric established by the Agency; or

(7) Revocation of PLP status under § 762.106(g).

(f) Processing timeframes. Complete applications from lenders exercising delegated authority will be approved or rejected no later than 5 calendar days after receipt if requisite environmental requirements have been met.

(g) Oversight. The Agency will monitor lender performance through the regular use of loan level data and lender monitoring reviews. The frequency of such reviews will be announced by the Agency in the Agency's administrative handbooks.

(h) Administration of delegated authority. The Agency may adjust, modify, or cancel the use of delegated authority programmatically based on overall considerations such as budget, portfolio performance, and program integrity.

[91 FR 56752, Sept. 4, 2026]