7(a) Loan Agent Oversight Act
Bill: H.R.4531 | Sponsor: Rep. Meuser, Daniel (R-PA)
Policy area: Commerce

Summary:
7(a) Loan Agent Oversight Act
This bill requires the Small Business Administration (SBA) to submit an annual report containing specified information related to 7(a) loan agents. These agents provide fee-based referral and loan application services related to the SBA's 7(a) Program. Under the 7(a) Program, the SBA guarantees up to 80% of a private lender's loan to a small business borrower who cannot obtain credit elsewhere on reasonable terms and conditions.
The required report must include (1) the number and type of agents assisting applicants for 7(a) loans, (2) the number of fraudulent loans made for which an applicant used the services of a 7(a) agent, and (3) the number and aggregate dollar value of referral fees paid to 7(a) agents.

To amend the Small Business Act to require a report on 7(a) agents, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``7(a) Loan Agent Oversight Act''.

SEC. 2. REPORT ON 7(A) AGENTS.

    Section 47 of the Small Business Act (15 U.S.C. 657t) is amended by 
adding at the end the following new subsection:
    ``(j) Annual Report.--
            ``(1) In general.--The Director shall submit to Congress, 
        in addition to the report required under subsection (h)(2), an 
        annual report including, for the calendar year covered by the 
        report--
                    ``(A) the number of 7(a) agents assisting 
                applicants for loans under section 7(a), disaggregated 
                by 7(a) agents who are attorneys, accountants, 
                consultants, packagers, and lender service providers 
                (as defined by section 103.1 of title 13, Code of 
                Federal Regulations);
                    ``(B) the number of fraudulent loans made for which 
                an applicant used services of a 7(a) agent;
                    ``(C) the purchase rate by the Administrator of 
                loans for which an applicant used services of a 7(a) 
                agent;
                    ``(D) the number and aggregate dollar value of 
                referral fees paid to 7(a) agents, disaggregated by 
                whether the applicant or 7(a) lender paid such fees;
                    ``(E) without identifying individual 7(a) agents by 
                name, a consolidated analysis of the risk created by 
                the individual 7(a) agents responsible for not less 
                than 1 percent of--
                            ``(i) the dollar value of loans made with 
                        the assistance of 7(a) agents; and
                            ``(ii) the number of loans made with the 
                        assistance of 7(a) agents;
                    ``(F) an analysis of interest rates on loans for 
                which an applicant or 7(a) lender used services of an 
                agent; and
                    ``(G) a description of how the Administrator 
                communicates with 7(a) agents.
            ``(2) Definitions.--In this subsection:
                    ``(A) 7(a) agent.--The term `7(a) agent' means a 
                person who provides covered services on behalf of a 
                lender or applicant.
                    ``(B) Covered services.--The term `covered 
                services' means--
                            ``(i) assistance with completing an 
                        application for a loan under section 7(a) 
                        (including preparing a business plan, cash flow 
                        projections, financial statements, and related 
                        documents); or
                            ``(ii) consulting, broker, or referral 
                        services with respect to a loan under section 
                        7(a).''.

            Passed the House of Representatives November 2, 2021.

            Attest:

                                             CHERYL L. JOHNSON,

                                                                 Clerk.