Microloan Modernization Act of 2017

To amend the Small Business Act to provide for expanded participation in the microloan program, and for other purposes. 1. Short title This Act may be cited as the Microloan Modernization Act of 2017 2. Definitions In this Act— (1) the term intermediary 15 U.S.C. 636(m)(11) (2) the term microloan program 15 U.S.C. 636(m) 3. Microloan intermediary lending limit increased Section 7(m)(3)(C) of the Small Business Act ( 15 U.S.C. 636(m)(3)(C) $5,000,000 $6,000,000 4. Elimination of 25/75 rule Section 7(m)(4) of the Small Business Act ( 15 U.S.C. 636(m)(4) (1) by striking subparagraph (E); and (2) by redesignating subparagraph (F) as subparagraph (E). 5. SBA study of microenterprise participation Not later than 1 year after the date of enactment of this Act, the Administrator of the Small Business Administration shall conduct a study and submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on— (1) the operations (including services provided, structure, size, and area of operation) of a representative sample of— (A) intermediaries that are eligible to participate in the microloan program and that do participate; and (B) intermediaries (including those operated for profit, operated not for profit, and those affiliated with a United States institution of higher learning) that are eligible to participate in the microloan program and that do not participate; (2) the reasons why intermediaries described in paragraph (1)(B) choose not to participate in the microloan program; (3) recommendations on how to encourage increased participation in the microloan program by intermediaries described in paragraph (1)(B); and (4) recommendations on how to decrease the costs associated with participation in the microloan program for eligible intermediaries. 6. GAO study on microloan intermediary practices Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report evaluating— (1) oversight of the microloan program by the Small Business Administration, including oversight of intermediaries participating in the microloan program; and (2) the specific processes used by the Small Business Administration to ensure— (A) compliance by intermediaries participating in the microloan program; and (B) the overall performance of the mi­cro­loan program.

Summary: Microloan Modernization Act of 2017 This bill amends the Small Business Act to repeal the &quot;25/75&quot; rule under the Small Business Administration (SBA) Microloan Program (assisting low-income individuals to start and operate a small business) that permits SBA-designated microloan intermediary lenders to expend up to 25% of the intensive marketing, management, and technical assistance grant funds they receive from the SBA to provide information and technical assistance to small business concerns that are their prospective borrowers. The total amount of loans outstanding and committed to any particular intermediary (excluding outstanding grants) from the SBA business loan and investment fund shall be increased from $5 million to $6 million for the remaining years of the intermediary's participation in the program. The SBA shall: compare the operations of a representative sample of eligible intermediaries that participate in the microloan program and of eligible intermediaries that do not, study the reasons why the latter do not participate, recommend how to encourage increased participation by intermediaries in the microloan program, and recommend how to decrease the associated costs for intermediary participation. The Government Accountability Office shall evaluate: SBA oversight of the microloan program, including oversight of participating intermediaries; and the specific processes the SBA uses to ensure program compliance by participating intermediaries and overall microloan program performance.