What This Bill Does
This bill changes the Small Business Act to require a yearly report about people who help small business owners apply for certain federal loans. The report must track information about these helpers, including how many work in the program, how much money they receive, and potential risks they create.
##
Who It Affects
The bill directly impacts the Director (the head of the Small Business Administration), Congress, and people who provide services to small business loan applicants. These service providers include attorneys, accountants, consultants, packagers, and lender service providers.
##
Key Provisions
- The Director must submit an annual report to Congress about the number and types of 7(a) agents working in the program, broken down by profession (attorney, accountant, consultant, packager, lender service provider) (Sec. 2)
- The report must include the number of fraudulent loans where the applicant used a 7(a) agent's services (Sec. 2)
- The report must track the total dollar value and number of referral fees paid to 7(a) agents, and show whether the applicant or lender paid those fees (Sec. 2)
- The report must analyze interest rates on loans where applicants or lenders used 7(a) agent services (Sec. 2)
- The report must describe how the Director communicates with 7(a) agents (Sec. 2)
##
What Changes
If this becomes law, the Small Business Administration will create and send Congress a new yearly report containing specific information about loan agents. This is in addition to any existing reports already required by law.
##
Important Definitions
**7(a) agent**: A person who provides covered services on behalf of a lender or applicant (Sec. 2)
**Covered services**: Help completing a loan application (including preparing a business plan, cash flow projections, financial statements, and related documents) or providing consulting, broker, or referral services for these loans (Sec. 2)
##
Effective Date
Not specified in bill text
IB
Union Calendar No. 76
118TH CONGRESS
1ST SESSION H. R. 1644
[Report No. 118–99]
To amend the Small Business Act to require a report on 7(a) agents, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 17, 2023
Mr. MEUSER (for himself and Mr. PHILLIPS) introduced the following bill;
which was referred to the Committee on Small Business
JUNE 5, 2023
Additional sponsor: Mr. LUETKEMEYER
JUNE 5, 2023
Reported from the Committee on Small Business; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6652
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB
2
•HR 1644 RH
A BILL
To amend the Small Business Act to require a report on
7(a) agents, and for other purposes.
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6652
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB
3
•HR 1644 RH
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘7(a) Loan Agent Over-
4
sight Act’’.
5
SEC. 2. REPORT ON 7(a) AGENTS.
6
Section 47 of the Small Business Act (15 U.S.C.
7
657t) is amended by adding at the end the following new
8
subsection:
9
‘‘(j) ANNUAL REPORT.—
10
‘‘(1) IN GENERAL.—The Director shall submit
11
to Congress, in addition to the report required under
12
subsection (h)(2), an annual report including, for
13
the calendar year covered by the report—
14
‘‘(A) the number of 7(a) agents assisting
15
applicants
for
loans
under
section
7(a),
16
disaggregated by 7(a) agents who are attorneys,
17
accountants, consultants, packagers, and lender
18
service providers (as defined by section 103.1 of
19
title 13, Code of Federal Regulations);
20
‘‘(B) the number of fraudulent loans made
21
for which an applicant used services of a 7(a)
22
agent;
23
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB
4
•HR 1644 RH
‘‘(C) the purchase rate by the Adminis-
1
trator of loans for which an applicant used
2
services of a 7(a) agent;
3
‘‘(D) the number and aggregate dollar
4
value of referral fees paid to 7(a) agents,
5
disaggregated by whether the applicant or 7(a)
6
lender paid such fees;
7
‘‘(E) without identifying individual 7(a)
8
agents by name, a consolidated analysis of the
9
risk created by the individual 7(a) agents re-
10
sponsible for not less than 1 percent of—
11
‘‘(i) the dollar value of loans made
12
with the assistance of 7(a) agents; and
13
‘‘(ii) the number of loans made with
14
the assistance of 7(a) agents;
15
‘‘(F) an analysis of interest rates on loans
16
for which an applicant or 7(a) lender used serv-
17
ices of an agent; and
18
‘‘(G) a description of how the Adminis-
19
trator communicates with 7(a) agents.
20
‘‘(2) DEFINITIONS.—In this subsection:
21
‘‘(A) 7(A) AGENT.—The term ‘7(a) agent’
22
means a person who provides covered services
23
on behalf of a lender or applicant.
24
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB
5
•HR 1644 RH
‘‘(B) COVERED SERVICES.—The term ‘cov-
1
ered services’ means—
2
‘‘(i) assistance with completing an ap-
3
plication for a loan under section 7(a) (in-
4
cluding preparing a business plan, cash
5
flow projections, financial statements, and
6
related documents); or
7
‘‘(ii) consulting, broker, or referral
8
services with respect to a loan under sec-
9
tion 7(a).’’.
10
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB
Union Calendar No. 76
118TH CONGRESS
1ST SESSION
H. R. 1644
[Report No. 118–99]
A BILL
To amend the Small Business Act to require a
report on 7(a) agents, and for other purposes.
JUNE 5, 2023
Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
VerDate Sep 11 2014
00:26 Jun 06, 2023
Jkt 039200
PO 00000
Frm 00006
Fmt 6651
Sfmt 6651
E:\BILLS\H1644.RH
H1644
pbinns on DSKJLVW7X2PROD with $$_JOB