---
kind: "section"
citation: "12 U.S.C. § 5707"
title: "12"
title_heading: "Banks and Banking"
number: "5707"
heading: "Remedies for State program termination or failures"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5707"
units:
  - "Chapter 54 — State Small Business Credit Initiative"
---

# §5707. Remedies for State program termination or failures

- (a) **Remedies—**
  - (1) **In general—** If any of the events listed in [paragraph (2)](#a-2) occur, the [Secretary](/usc/12/5701.md?p=14), in the [Secretary](/usc/12/5701.md?p=14)’s discretion, may—
    - (A) reduce the amount of Federal funds allocated to the [State](/usc/12/5701.md?p=10) under the [Program](/usc/12/5701.md?p=7); or
    - (B) terminate any further transfers of allocated amounts that have not yet been transferred to the [State](/usc/12/5701.md?p=10).
  - (2) **Causal events—** The events referred to in [paragraph (1)](#a-1) are—
    - (A) termination by a [participating State](/usc/12/5701.md?p=6) of its participation in the [Program](/usc/12/5701.md?p=7);
    - (B) failure on the part of a [participating State](/usc/12/5701.md?p=6) to submit complete reports under [section 5706 of this title](/usc/12/5706.md) on a timely basis; or
    - (C) noncompliance by the [State](/usc/12/5701.md?p=10) with the terms of the allocation agreement between the [Secretary](/usc/12/5701.md?p=14) and the [State](/usc/12/5701.md?p=10).
- (b) **Deallocated amounts to be reallocated—** If, after 13 months, any portion of the amount of Federal funds allocated to a [participating State](/usc/12/5701.md?p=6) is deemed by the [Secretary](/usc/12/5701.md?p=14) to be no longer allocated to the [State](/usc/12/5701.md?p=10) after actions taken by the [Secretary](/usc/12/5701.md?p=14) under [subsection (a)(1)](#a-1), the [Secretary](/usc/12/5701.md?p=14) shall reallocate that portion among the [participating States](/usc/12/5701.md?p=6), excluding the [State](/usc/12/5701.md?p=10) whose allocated funds were deemed to be no longer allocated, as provided in [section 5702(b) of this title](/usc/12/5702.md?p=b).

## Source credit

(Pub. L. 111–240, title III, § 3008, Sept. 27, 2010, 124 Stat. 2580.)