Expanding Access to Affordable Credit for Small Businesses Act

I 118TH CONGRESS 1ST SESSION H. R. 3604 To authorize the Administrator of the Small Business Administration to license lending institutions to make loans under section 7(a) of the Small Business Act, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 23, 2023 Mr. DONALDS (for himself and Mr. CROW) introduced the following bill; which was referred to the Committee on Small Business A BILL To authorize the Administrator of the Small Business Ad- ministration to license lending institutions to make loans under section 7(a) of the Small Business Act, 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Expanding Access to 4 Affordable Credit for Small Businesses Act’’. 5 VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3604 IH SEC. 2. LICENSING OF LENDING INSTITUTIONS. 1 (a) IN GENERAL.—Section 7(a)(17) of the Small 2 Business Act (15 U.S.C. 636(a)(17)) is amended to read 3 as follows: 4 ‘‘(17) LICENSING OF LENDING INSTITU- 5 TIONS.— 6 ‘‘(A) IN GENERAL.—The Administration 7 may license lending institutions to make loans 8 authorized under this subsection. 9 ‘‘(B) CRITERIA.—In authorizing lending 10 institutions under subparagraph (A), the Ad- 11 ministrator shall ensure that each such institu- 12 tion— 13 ‘‘(i) provides an independent audit by 14 a third party or internal audit department 15 that examines adherence to all applicable 16 Federal laws and regulations relating to 17 anti-money laundering, terrorist financing, 18 sanctions, and financial crimes; and 19 ‘‘(ii) has in place a compliance pro- 20 gram that conforms with the requirements 21 described in the ‘Bank Secrecy Act/Anti- 22 Money Laundering Examination Manual’ 23 of the Financial Institutions Examination 24 Council and other applicable Federal anti- 25 VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3604 IH money laundering regulatory guidance, in- 1 cluding— 2 ‘‘(I) an annual financial crimes 3 risk assessment; 4 ‘‘(II) designation of an individual 5 to serve as an anti-money laundering 6 officer; 7 ‘‘(III) a customer identification 8 program; 9 ‘‘(IV) customer due diligence and 10 enhanced due diligence; 11 ‘‘(V) suspicious activity moni- 12 toring and reporting; 13 ‘‘(VI) information sharing; 14 ‘‘(VII) record retention; 15 ‘‘(VIII) sanctions implemented by 16 the Office of Foreign Assets Control; 17 ‘‘(IX) annual employee training, 18 including general training and job- 19 specific training; and 20 ‘‘(X) monitoring and testing. 21 ‘‘(C) PROHIBITION ON MORATORIUM.—The 22 Administrator may not impose a moratorium on 23 the licensing of lending institutions described in 24 subparagraph (A). 25 VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3604 IH ‘‘(D) NEW APPLICANTS.—Not later than 1 1 year after the date of the enactment of this 2 paragraph, the Administrator shall begin ac- 3 cepting applications for the licensing of lending 4 institutions. 5 ‘‘(E) REPORTS.—Not later than 1 year 6 after the date of the enactment of this para- 7 graph, and annually thereafter, the Adminis- 8 trator shall submit to the Committee on Small 9 Business and Entrepreneurship of the Senate 10 and the Committee on Small Business of the 11 House of Representatives a report that in- 12 cludes, with respect to the year preceding the 13 report— 14 ‘‘(i) the number of lending institutions 15 that applied to make loans under this sub- 16 section; 17 ‘‘(ii) the number of such lending insti- 18 tutions that the Administrator approved to 19 make loans under this subsection; 20 ‘‘(iii) the reason for any denial of an 21 application of such a lending institution; 22 ‘‘(iv) the number and total amount of 23 loans made by under this subsection by 24 lending institutions; and 25 VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3604 IH ‘‘(v) demographic information on the 1 recipients of the loans described in clause 2 (iv). 3 ‘‘(F) RULE OF CONSTRUCTION.—Nothing 4 in this paragraph shall be construed to provide 5 authority to the Administrator to regulate small 6 business lending companies, non-Federally reg- 7 ulated lenders, or nondepository lending institu- 8 tions, or banks. 9 ‘‘(G) DEFINITIONS.—In this paragraph: 10 ‘‘(i) BANK.—The term ‘bank’ has the 11 meaning given in section 3 of the Federal 12 Deposit Insurance Act. 13 ‘‘(ii) LENDING INSTITUTION.—The 14 term ‘lending institution’ has the meaning 15 given such term by the Administrator and 16 shall include a small business lending com- 17 pany, a non-Federally regulated lender, a 18 nondepository lending institution, or a 19 bank. 20 ‘‘(iii) NON-FEDERALLY REGULATED 21 LENDER; SMALL BUSINESS LENDING COM- 22 PANY.—The terms ‘non-Federally regu- 23 lated lender’ and ‘small business lending 24 VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3604 IH company’ have the meanings given, respec- 1 tively, under section 23.’’. 2 (b) AUTHORIZATION OF APPROPRIATIONS.—There is 3 authorized to be appropriated for the Office of Credit Risk 4 Management of the Small Business Administration such 5 sums as may be necessary to conduct oversight of lending 6 institutions and other entities as described under para- 7 graph (17) of section 7(a) of the Small Business Act (15 8 U.S.C. 636(a)), as added by subsection (a). 9 Æ VerDate Sep 11 2014 06:35 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3604.IH H3604 pbinns on DSKJLVW7X2PROD with $$_JOB