Statement of Administration Policy: H.R. 3718 - Small Business Debentures Refinancing

(Revised - LA)

(House)
(LaFalce (D) New York and Durbin (D) Illinois)

If H.R. 3718 were presented to the President in its current form, the Secretary of the Treasury and the Director of the Office of Management and Budget would recommend that it be vetoed. The Administration opposes H.R. 3718 because it would reduce the prepayment penalty currently required for certain SBA-guaranteed debentures when such debentures are paid off early. This would result in a substantial subsidy to borrowers and significant receipt losses to the Government in future years.

H.R. 3718 is also objectionable because it would permit the lowering of interest rates on the debentures of certain SBA-supported companies.