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13 CFR 120.823(up to date as of 11/18/2022) 13 CFR 120.823(d)(3) <br /> CDC Board of Directors. <br /> (3) Setting the salary for the CDC manager and reviewing all salaries; <br /> (4) Establishing committees, at its discretion, including the following: <br /> (i) Executive Committee. To the extent authorized in the Bylaws,the Board of Directors may <br /> establish an Executive Committee. The Executive Committee may exercise the authority of the <br /> Board; however,the delegation of its authority does not relieve the Board of its responsibility <br /> imposed by law or Loan Program Requirements. No further delegation or redelegation of this <br /> authority is permitted. If the Board establishes an Executive Committee and delegates any of its <br /> authority to the Executive Committee as set forth in the Bylaws of the CDC,the Executive <br /> Committee must: <br /> (A) Be chosen by and from the Board of Directors from the Board; and <br /> (B) Meet the same organizational and representational requirements as the Board of <br /> Directors,except that the Executive Committee must have a minimum of four voting <br /> members who must be present to conduct business. <br /> (ii) Loan Committee. The Board of Directors may establish a Loan Committee. The Loan <br /> Committee may exercise the authority of the Board only as set forth below; however,the <br /> delegation of its authority does not relieve the Board of its responsibility imposed by law or <br /> Loan Program Requirements. If the Board of Directors chooses to establish a Loan Committee, <br /> no CDC staff or manager may serve on the Loan Committee. The Loan Committee must: <br /> (A) Be chosen by the Board of Directors, and consist of individuals with a background in either <br /> financial risk management,commercial lending, or legal issues relating to commercial <br /> lending who are not associated with another CDC; <br /> (B) Have a Quorum of at least four Loan Committee members authorized to vote; <br /> (C) Have at least two (2) Loan Committee members with commercial lending experience <br /> satisfactory to SBA; <br /> (D) Have no actual or appearance of a conflict of interest, including for example, a Loan <br /> Committee member participating in deliberations on a loan for which the Third Party <br /> Lender is the member's employer or the member is otherwise associated with the Third <br /> Party Lender; and <br /> (E) Consist only of Loan Committee members who live or work in the CDC's State of <br /> incorporation or in an area that meets the definition of a Local Economic Area for the CDC, <br /> except that,for Projects that are financed under a CDC's Multi-State authority,the CDC <br /> must satisfy the requirements of either§,.1 20:835(c)(1) or(2) when voting on that Project. <br /> (5) Ensuring that the CDC's expenses are reasonable and customary; <br /> (6) Hiring directly an independent auditor to provide the financial statements in accordance with Loan <br /> Program Requirements; <br /> (7) Monitoring the CDC's portfolio performance on a regular basis; <br /> (8) Reviewing a semiannual report on portfolio performance from the CDC manager,which would <br /> include, but not be limited to, asset quality and industry concentration; <br /> (9) Ensuring that the CDC establishes and maintains adequate reserves for operations; <br /> 13 CFR 120.823(d)(9)(enhanced display) page 2 of 3 <br />