SEC. 3. CODIFICATION OF THE OFFICE OF CREDIT RISK 
MANAGEMENT AND THE LENDER OVERSIGHT 
COMMITTEE. 
(a) IN GENERAL.—The Small Business Act (15 
U.S.C. 631 et seq.) is amended— 
(1) by redesignating section 47 as section 49; 
and 
(2) by inserting after section 46 the following 
new sections: 
‘‘SEC. 47. OFFICE OF CREDIT RISK MANAGEMENT. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Administration the Office of Credit Risk Management 
(in this section referred to as the ‘Office’). 
‘‘(b) DUTIES.—The Office shall be responsible for su-
pervising— 
‘‘(1) any lender making loans under section 
7(a) (in this section referred to as a ‘7(a) lender’); 
‘‘(2) any participant in a lending program of 
the Office of Capital Access of the Administration; 
and 
‘‘(3) any small business lending company or a 
non-Federally regulated lender without regard to the 
requirements of section 23. 
‘‘(c) DIRECTOR.— 
‘‘(1) IN GENERAL.—The Office shall be headed 
by the Director of the Office of Credit Risk Manage-
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ment (in this section referred to as the ‘Director’), 
who shall be a career appointee in the Senior Execu-
tive Service (as defined in section 3132 of title 5, 
United States Code). 
‘‘(2) DUTIES.—The Director shall be respon-
sible for oversight of the lenders and participants de-
scribed in subsection (b), including by conducting 
periodic reviews of the compliance and performance 
of such lenders and participants. 
‘‘(d) SUPERVISION DUTIES FOR 7(a) LENDERS.— 
‘‘(1) REVIEWS.—With respect to 7(a) lenders, 
an employee of the Office shall— 
‘‘(A) be present for and supervise any such 
review that is conducted by a contractor of the 
Office on the premise of the 7(a) lender; and 
‘‘(B) supervise any such review that is not 
conducted on the premise of the 7(a) lender. 
‘‘(2) REVIEW
REPORT
TIMELINE.—Notwith-
standing any other requirements of the Office or the 
Administrator, the Administrator shall develop and 
implement a review report timeline which shall— 
‘‘(A) require the Administrator to— 
‘‘(i) deliver a written report of the re-
view to the 7(a) lender not later than 60 
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business days after the date on which the 
review is conducted; or 
‘‘(ii) if the Administrator expects to 
submit the report after the end of the 60- 
day period described in clause (i), notify 
the 7(a) lender of the expected date of sub-
mission of the report and the reason for 
the delay; and 
‘‘(B) if a response by the 7(a) lender is re-
quested in a report submitted under subpara-
graph (A), require the 7(a) lender to submit re-
sponses to the Administrator not later than 45 
business days after the date on which the 7(a) 
lender receives the report. 
‘‘(e) ENFORCEMENT
AUTHORITY
AGAINST
7(a) 
LENDERS.— 
‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.— 
The Director may take an informal enforcement ac-
tion against a 7(a) lender if the Director finds that 
the 7(a) lender has violated a requirement under 
section 7(a) or any requirement in a Standard Oper-
ating Procedures Manual or Policy Notice related to 
a program or function of the Office of Capital Ac-
cess. 
‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 
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‘‘(A) IN GENERAL.—With the approval of 
the Lender Oversight Committee established 
under section 48, the Director may take a for-
mal enforcement action against any 7(a) lender 
if the Director finds that the 7(a) lender has 
violated— 
‘‘(i) a requirement under section 7(a), 
including a requirement relating to credit 
elsewhere, or any regulation implementing 
such section; or 
‘‘(ii) any requirement described in a 
Standard Operating Procedures Manual or 
Policy Notice, related to a program or 
function of the Office of Capital Access. 
‘‘(B) ENFORCEMENT
ACTIONS.—An en-
forcement action imposed on a 7(a) lender by 
the Director under subparagraph (A) shall be 
based on the severity or frequency of the viola-
tion and may include assessing a civil monetary 
penalty against the 7(a) lender in an amount 
that is not greater than $250,000. 
‘‘(3) APPEAL BY LENDER.—A 7(a) lender may 
appeal an enforcement action imposed by the Direc-
tor described in paragraph (2) to the Office of Hear-
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ings and Appeals established under section 5(i) or to 
an appropriate district court of the United States. 
‘‘(f) REGULATIONS.—Not later than 1 year after the 
date of the enactment of this section, the Administrator 
shall issue regulations, after opportunity for notice and 
comment, to carry out subsection (e). 
‘‘(g) SERVICING
AND LIQUIDATION RESPONSIBIL-
ITIES.—During any period during which a 7(a) lender is 
suspended or otherwise prohibited from making loans 
under section 7(a), the 7(a) lender shall remain obligated 
to maintain all servicing and liquidation activities dele-
gated to the lender by the Administrator, unless otherwise 
specified by the Director. 
‘‘(h) PORTFOLIO RISK ANALYSIS OF 7(a) LOANS.— 
‘‘(1) IN GENERAL.—The Director shall annually 
conduct a risk analysis of the portfolio of the Ad-
ministration with respect to all loans guaranteed 
under section 7(a). 
‘‘(2) REPORT TO CONGRESS.—On December 1, 
2018, and every December 1 thereafter, the Director 
shall submit to Congress a report containing the re-
sults of each portfolio risk analysis conducted under 
paragraph (1) during the fiscal year preceding the 
submission of the report, which shall include— 
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‘‘(A) an analysis of the overall program 
risk of loans guaranteed under section 7(a); 
‘‘(B) an analysis of the program risk, set 
forth separately by industry concentration; 
‘‘(C) without identifying individual 7(a) 
lenders by name, a consolidated analysis of the 
risk created by the individual 7(a) lenders re-
sponsible for not less than 1 percent of the 
gross loan approvals set forth separately for the 
year covered by the report by— 
‘‘(i) the dollar value of the loans made 
by such 7(a) lenders; and 
‘‘(ii) the number of loans made by 
such 7(a) lenders; 
‘‘(D) steps taken by the Administrator to 
mitigate the risks identified in subparagraphs 
(A), (B), and (C); 
‘‘(E) the number of 7(a) lenders, the num-
ber of loans made, and the gross and net dollar 
amount of loans made; 
‘‘(F) the number and dollar amount of 
total defaults, the number and dollar amount of 
total repurchases, and the percentage and dol-
lar amount of recoveries; 
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‘‘SEC. 48. LENDER OVERSIGHT COMMITTEE. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Administration the Lender Oversight Committee (in 
this section referred to as the ‘Committee’). 
‘‘(b) MEMBERSHIP.—The Committee shall consist of 
11 members selected by the Administrator, of which— 
‘‘(1) 3 members shall be voting members, 2 of 
whom shall be career appointees in the Senior Exec-
utive Service (as defined in section 3132 of title 5, 
United States Code); and 
‘‘(2) 8 members shall be nonvoting members 
who shall serve in an advisory capacity on the Com-
mittee. 
‘‘(c) DUTIES.—The Committee shall— 
‘‘(1) review reports on lender oversight activi-
ties; 
‘‘(2) review formal enforcement action rec-
ommendations of the Director of the Office of Credit 
Risk Management with respect to any lender making 
loans under section 7(a) and any participant in a 
lending program of the Office of Capital Access of 
the Administration; 
‘‘(3) in carrying out paragraph (2) with respect 
to formal enforcement actions taken under sub-
section (d) or (e) of section 23, vote to recommend 
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or not recommend action to the Administrator or a 
designee of the Administrator; 
‘‘(4) in carrying out paragraph (2) with respect 
to any formal enforcement action not specified under 
subsection (d) or (e) of section 23, vote to approve, 
disapprove, or modify the action; 
‘‘(5) review, in an advisory capacity, any lender 
oversight, portfolio risk management, or program in-
tegrity matters brought by the Director; and 
‘‘(6) take such other actions and perform such 
other functions as may be delegated to the Com-
mittee by the Administrator. 
‘‘(d) MEETINGS.— 
‘‘(1) IN GENERAL.—The Committee shall meet 
as necessary, but not less frequently than on a quar-
terly basis. 
‘‘(2) REPORTS.—The Committee shall submit 
to the Administrator a report detailing each meeting 
of the Committee, including if the Committee does 
or does not vote to recommend a formal enforcement 
action of the Director of the Office of Credit Risk 
Management with respect to a lender.’’. 
(b) TRANSFER OF FUNCTIONS.— 
(1) OFFICE OF CREDIT RISK MANAGEMENT.— 
All functions of the Office of Credit Risk Manage-
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ment of the Small Business Administration, includ-
ing the personnel, assets, and obligation of the Of-
fice of Credit Risk Management, as in existence on 
the day before the date of the enactment of this Act, 
shall be transferred to the Office of Credit Risk 
Management established under section 47 of the 
Small Business Act, as added by subsection (a). 
(2) 
LENDER
OVERSIGHT
COMMITTEE.—All 
functions of the Lender Oversight Committee of the 
Small Business Administration, including the per-
sonnel, assets, and obligations of the Lender Over-
sight Committee, as in existence on the day before 
the date of the enactment of this Act, shall be trans-
ferred to the Lender Oversight Committee estab-
lished under section 48 of the Small Business Act, 
as added by subsection (a). 
(c) DEEMING OF NAME.— 
(1) OFFICE OF CREDIT RISK MANAGEMENT.— 
Any reference in a law, regulation, guidance, docu-
ment, paper, or other record of the United States to 
the Office of Credit Risk Management of the Small 
Business Administration shall be deemed a reference 
to the Office of Credit Risk Management, estab-
lished under section 47 of the Small Business Act, 
as added by subsection (a). 
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(2) LENDER OVERSIGHT COMMITTEE.—Any ref-
erence in a law, regulation, guidance, document, 
paper, or other record of the United States to the 
Lender Oversight Committee of the Small Business 
Administration shall be deemed a reference to the 
Lender Oversight Committee, established under sec-
tion 48 of the Small Business Act, as added by sub-
section (a). 
(d) TECHNICAL AMENDMENT.—Section 3(r)(2) of 
the Small Business Act (15 U.S.C. 632(r)(2)) is amended 
by striking ‘‘regulated SBA lender’’ each place it appears 
in heading and text and inserting ‘‘regulated lender’’. 
SEC. 4. DEFINITION OF CREDIT ELSEWHERE. 
(a) IN GENERAL.—The Small Business Act (15 
U.S.C. 631 et seq.) is amended— 
(1) by striking section 3(h) (15 U.S.C. 632(h)) 
and inserting the following: 
‘‘(h) The term ‘credit elsewhere’ means— 
‘‘(1) for the purposes of this Act (except as 
used in section 7(b)), the availability of credit on 
reasonable terms and conditions to the individual 
loan applicant from non-Federal, non-State, or non- 
local government sources, considering factors associ-
ated with conventional lending practices, including— 
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‘‘(A) the business industry in which the 
loan applicant operates; 
‘‘(B) whether the loan applicant is an en-
terprise that has been in operation for a period 
of not more than 2 years; 
‘‘(C) the adequacy of the collateral avail-
able to secure the requested loan; 
‘‘(D) the loan term necessary to reasonably 
assure the ability of the loan applicant to repay 
the debt from the actual or projected cash flow 
of the business; and 
‘‘(E) any other factor relating to the par-
ticular credit application, as documented in de-
tail by the lender, that cannot be overcome ex-
cept through obtaining a Federal loan guar-
antee under prudent lending standards; and 
‘‘(2) for the purposes of section 7(b), the avail-
ability of credit on reasonable terms and conditions 
from non-Federal sources taking into consideration 
the prevailing rates and terms in the community in 
or near where the applicant small business concern 
transacts business, or the applicant homeowner re-
sides, for similar purposes and periods of time.’’; 
and 
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(2) 
in 
section 
7(a)(1)(A)(i) 
(15 
U.S.C. 
636(a)(1)(A)(i)), by inserting ‘‘The Administrator 
has the authority to direct, and conduct oversight 
for, the methods by which lenders determine whether 
a borrower is able to obtain credit elsewhere.’’ before 
‘‘No financial assistance’’. 
(b) TECHNICAL AMENDMENT.—Section 18(b) of the 
Small Business Act (15 U.S.C. 647(b)) is amended to read 
as follows: 
‘‘(b) As used in this Act, the term ‘agricultural enter-
prises’ means those small business concerns engaged in 
the production of food and fiber, ranching, and raising of 
livestock, aquaculture, and all other farming and agricul-
tural-related industries.’’. 
SEC. 5. AUTHORITY FOR ADMINISTRATOR TO INCREASE 
AMOUNT FOR GENERAL BUSINESS LOANS. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note) is amended— 
(1) by redesignating subsection (j) as sub-
section (f); and 
(2) by adding at the end the following new sub-
section: 
‘‘(g) AUTHORITY TO INCREASE AMOUNT OF GEN-
ERAL BUSINESS LOANS.— 
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‘‘(1) IN GENERAL.—With respect to fiscal year 
2018 and each fiscal year thereafter, if the Adminis-
trator determines that the amount of commitments 
by the Administrator for general business loans au-
thorized under section 7(a) for a fiscal year could 
exceed the limit on the total amount of commitments 
the Administrator may make for those loans under 
this Act, an appropriations Act, or any other provi-
sion of law, the Administrator may make commit-
ments for those loans for that fiscal year in an ag-
gregate amount equal to not more than 115 percent 
of that limit. 
‘‘(2) APPROVAL
REQUIRED
BEFORE
EXER-
CISING AUTHORITY.— 
‘‘(A) IN
GENERAL.—Not later than 30 
days before the date on which the Adminis-
trator intends to exercise the authority under 
paragraph (1), the Administrator shall submit 
notice of intent to exercise the authority to— 
‘‘(i) the Committee on Small Business 
and 
Entrepreneurship 
and 
the 
Sub-
committee on Financial Services and Gen-
eral Government of the Committee on Ap-
propriations of the Senate; and 
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‘‘(ii) the Committee on Small Busi-
ness and the Subcommittee on Financial 
Services and General Government of the 
Committee on Appropriations of the House 
of Representatives. 
‘‘(B) APPROVAL.—The Administrator may 
not exercise the authority under paragraph (1) 
unless such exercise of authority has been ap-
proved, in writing, by the Committee on Appro-
priations and the Committee on Small Business 
and Entrepreneurship of the Senate and the 
Committee on Appropriations and the Com-
mittee on Small Business of the House of Rep-
resentatives. 
‘‘(3) LIMITATION.—The Administrator shall not 
exercise the authority under paragraph (1) more 
than once during any fiscal year.’’. 
SEC. 6. DISCLOSURE OF WAIVERS. 
(a) IN GENERAL.—If the Administrator exercises 
statutory or regulatory authority to waive a regulation re-
lated to a program or function of the Office of Capital 
Access of the Administration— 
(1) the waiver shall be in writing and shall 
specify the grounds for approving the waiver; and 
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(2) the Administrator shall notify the public of 
all waivers of regulations approved by the Adminis-
tration, which notice shall— 
(A) be published in the Federal Register 
not less than annually; 
(B) cover the period beginning on the date 
after the last day covered by the previous no-
tice; 
(C) describe the nature of the requirement 
that has been waived and specify the regulation 
involved; 
(D) include a brief description of the 
grounds for approval of the waiver; and 
(E) state how more information about the 
waiver and a copy of the request and the ap-
proval may be obtained. 
(b) NO NEW WAIVER AUTHORITY.—Nothing in sub-
section (a) shall be construed as creating new authority 
for the Administrator to waive regulations of the Adminis-
tration. 
(c) GAO STUDY ON STANDARD OPERATING PROCE-
DURES MANUAL OR POLICY NOTICE WAIVER PROCESS.— 
Not later than 1 year after the date of the enactment of 
this Act, the Comptroller General of the United States 
shall submit to the Committee on Small Business and En-
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trepreneurship of the Senate and the Committee on Small 
Business of the House of Representatives a report evalu-
ating— 
(1) the methods and specific processes used by 
the Small Business Administration to waive require-
ments in Standard Operating Procedures Manual or 
Policy Notices relating to loans made under section 
7(a) of the Small Business Act (15 U.S.C. 636(a)); 
and 
(2) the number of such waivers granted during 
the period of 5 fiscal years preceding the date of the 
enactment of this Act. 
Æ 
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