I 
116TH CONGRESS 
2D SESSION 
H. R. 8199 
To amend the Small Business Act to enhance the Office of Credit Risk 
Management, to require the Administrator of the Small Business Admin-
istration to issue rules relating to environmental obligations of certified 
development companies, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 11, 2020 
Mr. BISHOP of North Carolina (for himself and Ms. CRAIG) introduced the 
following bill; which was referred to the Committee on Small Business 
A BILL 
To amend the Small Business Act to enhance the Office 
of Credit Risk Management, to require the Administrator 
of the Small Business Administration to issue rules relat-
ing to environmental obligations of certified development 
companies, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘504 Credit Risk Man-
agement Improvement Act of 2020’’. 
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SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK 
MANAGEMENT. 
Section 47 of the Small Business Act (15 U.S.C. 
657t) is amended— 
(1) by striking subsection (b) and inserting the 
following: 
‘‘(b) DUTIES.—The Office— 
‘‘(1) shall be responsible for— 
‘‘(A) supervising— 
‘‘(i) any lender making loans under 
section 7(a) (in this section referred to as 
a ‘7(a) lender’); 
‘‘(ii) any Lending Partner or Inter-
mediary participant of the Administration 
in a lending program of the Office of Cap-
ital Access of the Administration; 
‘‘(iii) any small business lending com-
pany or a non-Federally regulated lender 
without regard to the requirements of sec-
tion 23; and 
‘‘(iv) any certified development com-
pany described under the program estab-
lished under title V of the Small Business 
Investment Act of 1958 (referred to in this 
section as a ‘certified development com-
pany’), as provided in subsection (k); and 
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‘‘(B) conducting file reviews with respect 
to loan closings under the program established 
under title V of the Small Business Investment 
Act of 1958, as provided in subsection (j); and 
‘‘(2) may— 
‘‘(A) take formal and informal enforcement 
actions against a certified development com-
pany, as provided in subsection (l); and 
‘‘(B) charge a certified development com-
pany a fee, as provided in subsection (m).’’; and 
(2) by adding at the end the following new sub-
sections: 
‘‘(j) LOAN CLOSING FILE REVIEWS.—With respect 
to a loan closing under the program established under title 
V of the Small Business Investment Act of 1958, the Of-
fice shall be responsible for the following: 
‘‘(1) Conducting a complete file review of a ran-
dom selection of all loan closings, the number, fre-
quency, and conduct of which shall be at the discre-
tion of the Office, to ensure program integrity, in-
cluding a review of the items listed on the Checklist 
for Complete File Review contained in the appro-
priate form of the Administration. 
‘‘(2) Not later than 60 days after the date on 
which each complete file review conducted under 
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paragraph (1) is completed, preparing a written re-
port documenting the results of that review, which 
the Office shall send to— 
‘‘(A) the applicable certified development 
company; 
‘‘(B) the designated attorney that closed 
the loan for the certified development company; 
and 
‘‘(C) the Commercial Loan Service Center. 
‘‘(3) If a complete file review conducted under 
paragraph (1) reveals a deficiency that could result 
in a loss to the Administration, requiring the appli-
cable certified development company or the des-
ignated attorney to promptly correct the deficiency. 
‘‘(k) SUPERVISION
OF CERTIFIED DEVELOPMENT 
COMPANIES.—With respect to the supervision of certified 
development companies— 
‘‘(1) an employee of the Office shall— 
‘‘(A) be present for, and supervise, the re-
view of any such company that is conducted by 
a contractor of the Office on the premises of 
the company; and 
‘‘(B) supervise the review of any such com-
pany that is conducted by a contractor of the 
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Office that is not conducted on the premises of 
the company; and 
‘‘(2) the Administrator shall— 
‘‘(A) develop a timeline for the review by 
the Office of certified development companies 
and the submission of reports regarding those 
reviews, under which the Administrator shall— 
‘‘(i) submit to a certified development 
company a written report of any review of 
the company not later than 90 days after 
the date on which the review is concluded; 
or 
‘‘(ii) if the Administrator expects to 
submit the report after the end of the 90- 
day period described in clause (i), notify 
the company of the expected date of sub-
mission of the report and the reason for 
the delay; and 
‘‘(B) if a response by a certified develop-
ment company is requested in a report sub-
mitted under subparagraph (A)(i), require the 
company to submit responses to the Adminis-
trator not later than 45 business days after the 
date on which the company receives the report. 
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‘‘(l) ENFORCEMENT
AUTHORITY
AGAINST
CER-
TIFIED DEVELOPMENT COMPANIES.— 
‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.— 
The Director may take an informal enforcement ac-
tion against a certified development company if the 
Director finds that the company has violated a stat-
utory or regulatory requirement or any requirement 
in a Standard Operating Procedures Manual or Pol-
icy Notice relating to a program or function of the 
Office of Capital Access. 
‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 
‘‘(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 certified de-
velopment company if the Director finds that 
the company has violated— 
‘‘(i) a statutory or regulatory require-
ment, including a requirement relating to 
the necessary funds for making loans when 
those funds are not made available to the 
company from private sources on reason-
able terms; or 
‘‘(ii) any requirement described in a 
Standard Operating Procedures Manual or 
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Policy Notice relating to a program or 
function of the Office of Capital Access. 
‘‘(B) ENFORCEMENT ACTIONS.—The deci-
sion to take an enforcement action against a 
certified development company under subpara-
graph (A) shall be based on the severity or fre-
quency of the violation and may include assess-
ing a civil monetary penalty against the com-
pany in an amount that is not greater than 
$250,000. 
‘‘(3) FAILURE TO SUBMIT ANNUAL REPORT.— 
With respect to a certified development company 
that, as of the date that is 30 days after the date 
on which the company is required to submit any re-
port, fails to submit that report, the Director may— 
‘‘(A) suspend the company from partici-
pating in the program established under title V 
of the Small Business Investment Act of 1958 
for a period that is not longer than 30 days; or 
‘‘(B) impose a penalty on the company in 
an amount to be determined by the Director, 
except that the amount of the penalty shall be 
not more than $10,000. 
‘‘(m) FEE AUTHORITY REGARDING CERTIFIED DE-
VELOPMENT COMPANIES.— 
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