The House of Representatives passed legislation Tuesday (June 3) that its sponsor said will combat fraud and improve transparency in a Small Business Administration (SBA) loan program.
The legislation, the 7(a) Loan Agent Oversight Act (H.R. 1804), requires the SBA’s Office of Credit Risk Management to provide Congress with an annual report on the performance of and risk associated with SBA 7(a) loans generated through loan agent activity, according to a Tuesday press release from its sponsor, Rep. Dan Meuser, R-Pa.
The bill passed on a vote of 405 to 3, with two Republicans and one Democrat voting against it, according to the website of the Office of the Clerk of the House of Representatives. Twenty-four representatives did not vote.
The legislation was received in the Senate Wednesday (June 4) and referred to the Committee on Small Business and Entrepreneurship, according to the Office of the Clerk’s website.
According to Meuser’s press release, the data in the report required by the legislation will enable Congress to oversee the loan program, which the SBA’s Inspector General found has seen over $335 million in documented loan agent fraud.
“My bill ensures that both Congress and the SBA have the necessary data to provide proper oversight by requiring the SBA’s Office of Credit Risk Management to collect and report on fraudulent loans, default rates, and risk analysis of loan agents operating within the program,” Meuser said in the release. “Strengthening transparency and accountability will protect taxpayer dollars, ensure the 7(a) Loan Program remains a successful public-private partnership, and help small businesses continue to access the capital they need to grow.”
A Democrat who co-sponsored the bill, Rep. LaMonica McIver, D-N.J., said in a Tuesday post on X: “Small business owners aren’t asking for easy, they’re asking for a fair shake and a real shot. I co-led the bipartisan 7(a) Loan Agent Oversight Act because that’s exactly what small business owners deserve.”
The SBA’s 7(a) loan program provides guaranties to lenders and encourages loans to small businesses. In 2023, the program backed 57,000 loans worth $27.5 billion, with most of those loans being less than $350,000.
