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13 CFR 120.823(up to date as of 11/18/2022) 13 CFR 120.823
<br /> CDC Board of Directors.
<br /> This content is from the eCFR and is authoritative but unofficial.
<br /> Title 13-Business Credit and Assistance
<br /> Chapter I-Small Business Administration
<br /> Part 120 -Business Loans
<br /> Subpart H-Development Company Loan Program(504)
<br /> Requirements for CDC Certification and Operation Requirements for...
<br /> Authority. 15 U.S.C. 634(b)(6),(b)(7),(b)(14),(h),and note,636(a),(h)and(m),and note,636m,650,657t,and note,657u,and
<br /> note,687(f)1 696(3),and (7),and note,697,697a and e,and note; Pub. L. 116-260,134 Stat. 1182.
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<br /> Source: 61 FR 3235,Jan.31,1996,unless otherwise noted.
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<br /> Editorial Note: Nomenclature changes to part 120 appear at 72 FR 50039,Aug. 30, 2007.
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<br /> §120.823 CDC Board of Directors.
<br /> (a) The CDC,whether for-profit or non-profit, must have a Board of Directors with at least seven (7) voting
<br /> directors who live or work in the CDC's State of incorporation or in an area that is contiguous to that State
<br /> that meets the definition of a Local Economic Area for the CDC. The Board must be actively involved in
<br /> encouraging economic development in the Area of Operations. The initial Board may be created by any
<br /> method permitted by applicable State law.At a minimum,the Board must have directors with background
<br /> and expertise in internal controls,financial risk management, commercial lending, legal issues relating to
<br /> commercial lending,corporate governance, and economic, community or workforce development.
<br /> Directors may be either currently employed or retired.
<br /> (b) At least two voting members of the Board of Directors, other than the CDC manager, must possess
<br /> commercial lending experience satisfactory to SBA. When the Board votes on SBA loan approval or
<br /> servicing actions, at least two voting Board members,with such commercial lending experience, other
<br /> than the CDC manager, must be present and vote.
<br /> (c) The Board of Directors must meet at least quarterly and shall be responsible for the actions of the CDC
<br /> and any committees established by the Board of Directors. In addition,the Board of Directors is subject to
<br /> the following requirements:
<br /> (1) Except for the CDC manager, no person on the CDC's staff may be a voting director of the Board;
<br /> (2) A quorum must be present to transact business. The quorum shall be set by the CDC but shall be no
<br /> less than 50% of the voting members of the Board of Directors;
<br /> (3) Attendance at meetings may be through any format permitted by State law;
<br /> (4) No CDC Board member may serve on the Board of another CDC.
<br /> (d) The Board shall have and exercise all corporate powers and authority and be responsible for all corporate
<br /> actions and business. There must be no actual or appearance of a conflict of interest with respect to any
<br /> actions of the Board. The Board is responsible for ensuring that the structure and operation of the CDC, as
<br /> set forth in the Bylaws, comply with SBA's Loan Program Requirements. The responsibilities of the Board
<br /> include, but are not limited,to the following:
<br /> (1) Approving the mission and the policies for the CDC;
<br /> (2) Hiring,firing, supervising and annually evaluating the CDC manager;
<br /> 13 CFR 120.823(d)(2)(enhanced display) page 1 of 3
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