Microloan Transparency and Accountability Act of 2020

IIB 116TH CONGRESS 2D SESSION H. R. 6078 IN THE SENATE OF THE UNITED STATES SEPTEMBER 15, 2020 Received; read twice and referred to the Committee on Small Business and Entrepreneurship AN ACT To amend the Small Business Act to increase transparency and to enhance the use of microloans in rural areas, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 2 HR 6078 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Microloan Trans- 2 parency and Accountability Act of 2020’’. 3 SEC. 2. ASSISTANCE FOR INTERMEDIARIES SERVING 4 RURAL AREAS. 5 Section 7(m) of the Small Business Act (15 U.S.C. 6 636(m)) is amended— 7 (1) by amending paragraph (4)(C)(i) to read as 8 follows: 9 ‘‘(i) Each intermediate shall be eligi- 10 ble to receive a grant equal to 5 percent of 11 the total outstanding balance of loans 12 made to the intermediary under this sub- 13 section, in addition to grants made under 14 subparagraph (A), if the intermediary has 15 either— 16 ‘‘(I) a portfolio of loans made 17 under this subsection that averages 18 not more than $10,000 during the pe- 19 riod of the intermediary’s participa- 20 tion in the program; 21 ‘‘(II) a portfolio of loans made 22 under this subsection of which not 23 less than 25 percent are made to 24 small business concerns located in or 25 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 3 HR 6078 RFS owned by one or more residents of an 1 economically distressed area; or 2 ‘‘(III) a portfolio of loans made 3 under this subsection of which not 4 less than 25 percent is serving rural 5 areas during the period of the 6 intermediary’s participation in the 7 program.’’; and 8 (2) in paragraph (11)— 9 (A) in subparagraph (C)(ii), by striking all 10 after the semicolon and inserting ‘‘and’’; and 11 (B) by striking all after subparagraph (C), 12 and inserting the following: 13 ‘‘(D) the term ‘economically distressed 14 area’, as used in paragraph (4), means a county 15 or equivalent division of local government of a 16 State in which the small business concern is lo- 17 cated, in which, according to the most recent 18 data available from the Bureau of the Census, 19 Department of Commerce, not less than 40 per- 20 cent of residents have an annual income that is 21 at or below the poverty level.’’. 22 SEC. 3. PORTFOLIO RISK ANALYSIS OF MICROLOANS. 23 Section 7(m)(10) of the Small Business Act (15 24 U.S.C. 636(m)(10)) is amended— 25 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 4 HR 6078 RFS (1) by redesignating subparagraphs (A) through 1 (F) as clauses (i) through (vi), respectively, and ad- 2 justing the margins accordingly; 3 (2) by amending clause (iv), as so redesignated, 4 to read as follows: 5 ‘‘(vi) the number, amount, and per- 6 centage of microloans made by inter- 7 mediaries to small business concerns— 8 ‘‘(I) that went into default in the 9 previous year; and 10 ‘‘(II) that were charged off in the 11 previous year by such inter- 12 mediaries;’’; 13 (3) in clause (vi), as so redesignated, by strik- 14 ing ‘‘and’’ at the end; 15 (4) by redesignating subparagraph (G) as 16 clause (xviii), and adjusting the margin accordingly; 17 (5) by striking ‘‘On November 1, 1995,’’ and all 18 that follows through ‘‘the following:’’ and inserting 19 the following: 20 ‘‘(A) IN GENERAL.—Beginning on Feb- 21 ruary 1, 2021, and annually thereafter, the Ad- 22 ministrator shall submit to the Committee on 23 Small Business and Entrepreneurship of the 24 Senate and the Committee on Small Business 25 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 5 HR 6078 RFS of the House of Representatives, and make 1 available to the public on the website of the Ad- 2 ministration, a report on the effectiveness of 3 the microloan program during the fiscal year 4 preceding the date of the report. Such report 5 shall include—’’; 6 (6) in subparagraph (A), as so designated, by 7 inserting after clause (vi) the following new clauses: 8 ‘‘(vii) the number and type of enforce- 9 ment actions taken by the Administrator 10 against noncompliant intermediaries; 11 ‘‘(viii) an analysis of compliance by 12 intermediaries with the credit availability 13 requirements of paragraph (3)(E) for loans 14 in an amount greater than $20,000; 15 ‘‘(ix) the extent to which microloans 16 are provided to small business concerns in 17 rural areas; 18 ‘‘(x) the number of underserved bor- 19 rowers, as defined by the Administration, 20 participating in the microloan program; 21 ‘‘(xi) the average rate of interest for 22 each microloan; 23 ‘‘(xii) the average amount of fees 24 charged for each microloan; 25 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 6 HR 6078 RFS ‘‘(xiii) the average size of each 1 microloan, including— 2 ‘‘(I) the number of loans made in 3 an amount greater than $20,000; and 4 ‘‘(II) the average size and 5 charge-off rate of such loans; 6 ‘‘(xiv) the subsidy cost to the Admin- 7 istration; 8 ‘‘(xv) the number and percentage of 9 microloans that were made to refinance 10 other loans; 11 ‘‘(xvi) the number and percentage of 12 microloans made to new program partici- 13 pants and the number and percentage of 14 microloans made to previous program par- 15 ticipants; 16 ‘‘(xvii) the average amount of tech- 17 nical assistance grant monies spent on 18 each loan; and’’; and 19 (7) by adding at the end the following: 20 ‘‘(B) PRIVACY.—Each report submitted 21 under subparagraph (A) shall not contain any 22 VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS 7 HR 6078 RFS personally identifiable information of any bor- 1 rower.’’. 2 Passed the House of Representatives September 14, 2020. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 05:28 Sep 16, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6078.RFS H6078 kjohnson on DSK79L0C42PROD with BILLS