What This Bill Does
This bill amends the Small Business Act to increase transparency in the federal microloan program. It requires the Small Business Administration to publish detailed reports about how the microloan program is working and who it is serving.
Who It Affects
The Small Business Administration (the federal agency that runs the microloan program), Congress, the public, intermediaries (organizations that distribute microloans), and small business owners who borrow through the microloan program.
Key Provisions
- The Small Business Administration must submit annual reports starting February 1, 2023, to Congress and post them publicly on its website about how well the microloan program is performing during the previous fiscal year (Sec. 2(A))
- Reports must include the number, amount and percentage of microloans that went into default or were charged off in the previous year (Sec. 2(A)(vi))
- Reports must show enforcement actions taken against organizations that do not follow program rules (Sec. 2(A)(vii))
- Reports must analyze how well intermediaries are providing loans greater than $20,000 to borrowers who need credit (Sec. 2(A)(viii))
- Reports must track microloans going to rural areas, underserved borrowers, interest rates, fees, average loan sizes and technical assistance spending (Sec. 2(A)(ix-xvii))
- Reports cannot include any personally identifiable information of borrowers (Sec. 2(B))
What Changes
The Small Business Administration will be required to gather and publicly report detailed data about the microloan program's performance, reach and costs. This information was not previously required to be compiled and released to the public.
Important Definitions
Not specified in bill text
Effective Date
February 1, 2023
IIB
118TH CONGRESS
1ST SESSION
H. R. 449
IN THE SENATE OF THE UNITED STATES
JANUARY 26, 2023
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 for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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HR 449 RFS
SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Microloan Trans-
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parency and Accountability Act of 2023’’.
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SEC. 2. PORTFOLIO RISK ANALYSIS OF MICROLOANS.
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Section 7(m)(10) of the Small Business Act (15
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U.S.C. 636(m)(10)) is amended—
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(1) by redesignating subparagraphs (A) through
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(F) as clauses (i) through (vi), respectively, and ad-
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justing the margins accordingly;
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(2) by amending clause (iv), as so redesignated,
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to read as follows:
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‘‘(vi) the number, amount, and per-
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centage of microloans made by inter-
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mediaries to small business concerns—
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‘‘(I) that went into default in the
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previous year; and
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‘‘(II) that were charged off in the
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previous
year
by
such
inter-
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mediaries;’’;
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(3) in clause (vi), as so redesignated, by strik-
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ing ‘‘and’’ at the end;
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(4) by redesignating subparagraph (G) as
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clause (xviii), and adjusting the margin accordingly;
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(5) by striking ‘‘On November 1, 1995,’’ and all
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that follows through ‘‘the following:’’ and inserting
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the following:
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HR 449 RFS
‘‘(A) IN
GENERAL.—Beginning on Feb-
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ruary 1, 2023, and annually thereafter, the Ad-
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ministrator shall submit to the Committee on
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Small Business and Entrepreneurship of the
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Senate and the Committee on Small Business
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of the House of Representatives, and make
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available to the public on the website of the Ad-
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ministration, a report on the effectiveness of
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the microloan program during the fiscal year
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preceding the date of the report. Such report
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shall include—’’;
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(6) in subparagraph (A), as so designated, by
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inserting after clause (vi) the following new clauses:
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‘‘(vii) the number and type of enforce-
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ment actions taken by the Administrator
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against noncompliant intermediaries;
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‘‘(viii) an analysis of compliance by
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intermediaries with the credit availability
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requirements of paragraph (3)(E) for loans
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in an amount greater than $20,000;
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‘‘(ix) the extent to which microloans
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are provided to small business concerns in
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rural areas;
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HR 449 RFS
‘‘(x) the number of underserved bor-
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rowers, as defined by the Administration,
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participating in the microloan program;
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‘‘(xi) the average rate of interest for
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each microloan;
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‘‘(xii) the average amount of fees
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charged for each microloan;
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‘‘(xiii) the average size of each
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microloan, including—
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‘‘(I) the number of loans made in
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an amount greater than $20,000; and
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‘‘(II)
the
average
size
and
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charge-off rate of such loans;
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‘‘(xiv) the subsidy cost to the Admin-
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istration;
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‘‘(xv) the number and percentage of
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microloans that were made to refinance
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other loans;
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‘‘(xvi) the number and percentage of
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microloans made to new program partici-
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pants and the number and percentage of
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microloans made to previous program par-
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ticipants;
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HR 449 RFS
‘‘(xvii) the average amount of tech-
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nical assistance grant monies spent on
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each loan; and’’; and
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(7) by adding at the end the following:
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‘‘(B) PRIVACY.—Each report submitted
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under subparagraph (A) shall not contain any
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personally identifiable information of any bor-
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rower.’’.
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Passed the House of Representatives January 25,
2023.
Attest:
CHERYL L. JOHNSON,
Clerk.
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