Title: 504 Credit Risk Management Improvement Act of 2020
Policy area: Commerce

Summary:
504 Credit Risk Management Improvement Act of 2020
This bill revises the duties of the Office of Credit Risk Management to include oversight of a certified development company (CDC) that participates in the 504 Loan Program of the Small Business Administration (SBA), and it requires the SBA to issue rules related to certain environmental requirements. The 504 Loan Program provides a small business with SBA financing—through a CDC intermediary—for expansion or modernization.
Specifically, the bill requires the office to oversee any CDC that participates in the program and to conduct file reviews with respect to loan closings under the program. Further, the bill authorizes the office to take formal and informal enforcement actions against a CDC for specified violations and to charge each CDC a fee.
The SBA must issue rules to clarify the procedures necessary for an eligible CDC to comply with certain environmental requirements.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8199 Introduced in House (IH)]

<DOC>






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 
Administration 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 relating to environmental obligations of 
        certified development companies, 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 ``504 Credit Risk Management 
Improvement Act of 2020''.

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 Intermediary 
                        participant of the Administration in a lending 
                        program of the Office of Capital Access of the 
                        Administration;
                            ``(iii) any small business lending company 
                        or a non-Federally regulated lender without 
                        regard to the requirements of section 23; and
                            ``(iv) any certified development company 
                        described under the program established under 
                        title V of the Small Business Investment Act of 
                        1958 (referred to in this section as a 
                        `certified development company'), as provided 
                        in subsection (k); and
                    ``(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 company, as provided in 
                subsection (l); and
                    ``(B) charge a certified development company a fee, 
                as provided in subsection (m).''; and
            (2) by adding at the end the following new subsections:
    ``(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 Office shall be responsible for the 
following:
            ``(1) Conducting a complete file review of a random 
        selection of all loan closings, the number, frequency, and 
        conduct of which shall be at the discretion of the Office, to 
        ensure program integrity, including a review of the items 
        listed on the Checklist for Complete File Review contained in 
        the appropriate form of the Administration.
            ``(2) Not later than 60 days after the date on which each 
        complete file review conducted under paragraph (1) is 
        completed, preparing a written report 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 applicable certified development 
        company or the designated 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 review 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 company that 
                is conducted by a contractor of the 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 submission of 
                        the report and the reason for the delay; and
                    ``(B) if a response by a certified development 
                company is requested in a report submitted under 
                subparagraph (A)(i), require the company to submit 
                responses to the Administrator not later than 45 
                business days after the date on which the company 
                receives the report.
    ``(l) Enforcement Authority Against Certified Development 
Companies.--
            ``(1) Informal enforcement authority.--The Director may 
        take an informal enforcement action against a certified 
        development company if the Director finds that the company has 
        violated a statutory or regulatory requirement or any 
        requirement in a Standard Operating Procedures Manual or Policy 
        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 formal enforcement action against 
                any certified development company if the Director finds 
                that the company has violated--
                            ``(i) a statutory or regulatory 
                        requirement, 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 reasonable 
                        terms; or
                            ``(ii) any requirement described in a 
                        Standard Operating Procedures Manual or Policy 
                        Notice relating to a program or function of the 
                        Office of Capital Access.
                    ``(B) Enforcement actions.--The decision to take an 
                enforcement action against a certified development 
                company under subparagraph (A) shall be based on the 
                severity or frequency of the violation and may include 
                assessing a civil monetary penalty against the company 
                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 report, fails to submit that report, the Director may--
                    ``(A) suspend the company from participating 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 Development Companies.--
            ``(1) In general.--Effective one year after the date of the 
        enactment of this subsection, the Office may collect from each 
        certified development company a fee, the amount of which--
                    ``(A) shall be determined on a graduated scale 
                according to the size of the portfolio of the certified 
                development company with respect to the program carried 
                out under title V of the Small Business Investment Act 
                of 1958; and
                    ``(B) shall not exceed the amount that is 1 basis 
                point with respect to the value of the portfolio 
                described in subparagraph (A).
            ``(2) Payment.--A certified development company on which a 
        fee is imposed under paragraph (1) shall pay the fee from the 
        servicing fees collected by the development company pursuant to 
        regulation.''.

SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED DEVELOPMENT 
              COMPANIES UNDER THE NATIONAL ENVIRONMENTAL POLICY ACT.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, the Administrator of the Small Business 
Administration shall issue rules to clarify the procedures necessary 
for an eligible certified development company to comply with the 
applicable requirements under National Environmental Policy Act of 1969 
(42 U.S.C. 4321 et seq.).
    (b) Rule of Construction.--Nothing in this section shall be 
construed to modify the requirements of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.).
    (c) Eligible Certified Development Company Defined.--In this 
section, the term ``eligible certified development company'' means a 
certified development company defined under title V of the Small 
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) that receives 
assistance pursuant to such title.
                                 <all>