WASHINGTON – Today, the Senate passed H.R. 4743, the Small Business 7(a) Lending Oversight Reform Act, to increase the Small Business Administration’s (SBA) oversight authority over the 7(a) Loan Program. The bipartisan and bicameral legislation was introduced by House Committee on Small Business Chairman Steve Chabot (R-OH), and Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID), and Ranking Member Nydia Velázquez (D-NY) and Jeanne Shaheen (D-NH).
“Today’s Senate passage takes us one step closer to seeing a bill become law that will help small business owners get the capital they need to start and grow their companies. The 7(a) Loan Program has been one of the SBA’s most popular and critical programs in helping small businesses succeed. This legislation will also direct the SBA to keep a closer eye on the program to ensure it continues to run smoothly for small businesses, while also making sure taxpayer dollars are safeguarded,” said Chairman Chabot.
“For small businesses that have trouble securing credit elsewhere—the 7(a) program is a lifeline. This bill will enact needed reforms to increase transparency and ensure that the program fulfills its mission, to help small firms access capital and create new jobs. Importantly, we must be prepared for periods of high demand for these loans, and that is why I am proud to have secured a provision in this bill to raise the 7(a) lending cap and prevent an unintended shutdown of the program. I thank Chairman Chabot for his leadership and willingness to work in a bipartisan manner to advance this crucial legislation. Now that this bill has cleared the Senate, I look forward to it swiftly being signed into law,” said Ranking Member Velázquez.
Specifically, the Small Business 7(a) Lending Oversight and Reform Act protects the program by:
- Strengthening SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director;
- Enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options;
- Requiring SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis; and
- Strengthening SBA’s Credit Elsewhere Test by clarifying the factors that must be considered.
Since its introduction, the House Small Business Committee has held several hearings reviewing the effectiveness and integrity of the program.