Congressman Meuser’s Bill to Improve Oversight at SBA Passes House Small Business Committee

WASHINGTON, D.C. – This week, the House Small Business Committee passed H.R. 1804, the Small Business 7(a) Loan Agent Oversight Act, introduced by Congressman Dan Meuser (PA-09). The legislation passed with unanimous bipartisan support.

The bill requires the Small Business Administration (SBA) Office of Credit Risk Management (OCRM) to submit an annual report to Congress regarding the performance of and risk associated with loans generated through loan agent activity.

The SBA’s Inspector General has reported that nearly 15 percent of all 7(a) loans involve a loan agent. However, over the last decade, more than $335 million in documented loan agent fraud has been reported.

This legislation ensures that Congress receives the necessary data to provide proper oversight of the SBA’s flagship loan program. It mandates reporting on the number of loans processed with the assistance of loan agents, default rates associated with those loans, and requires the SBA to conduct a risk analysis on agents participating in the program.

Congressman Meuser said, “Access to capital remains one of the biggest barriers to growth for entrepreneurs, and the SBA’s 7(a) Loan Program must be efficient, stable, and well-managed. Unfortunately, the SBA’s Office of Inspector General has identified a growing need for stronger oversight of 7(a) loan agents due to increased fraud risks, with over $335 million in documented loan agent fraud in the last decade. My bill ensures that both Congress and the SBA have the necessary data to provide proper oversight by requiring the SBA’s Office of Credit Risk Management to collect and report on fraudulent loans, default rates, and risk analysis of loan agents operating within the program. Strengthening transparency and accountability will protect taxpayer dollars, ensure the 7(a) Loan Program remains a successful public-private partnership, and help small businesses continue to access the capital they need to grow. I look forward to working with SBA Administrator Loeffler to uphold this program’s record of success and to restore the prudent underwriting standards that were removed under the Biden administration.” 

In Fiscal Year 2023, the SBA’s 7(a) loan program facilitated approximately 47,700 loans totaling $25.7 billion. The program serves as the SBA’s primary lending tool for small businesses that cannot obtain credit elsewhere. Rather than issuing direct loans, the SBA provides loan guarantees to private lenders to support small business growth.

On Wednesday, Congressman Meuser spoke in favor of H.R. 1804 in the House Small Business Committee. A clip of those remarks can be found here. 

Text of the legislation can be found here. 

###