7(a) Loan Agent Oversight Act

Mr. Speaker, I rise today in support of H.R. 1804, commonsense and bipartisan legislation, which I am proud to co-lead with my colleague, Congressman Meuser, to bring better oversight and real accountability to one of the Small Business Administration's most important loan programs, 7(a).

Mr. Speaker, small business owners aren't asking for easy. They are asking for a fair shake and a real shot. That is what the 7(a) loan program is supposed to do: help turn grit and a good idea into a successful business.

This program is the reason that someone with a solid plan or a good business but without a big investor or family money can still open up shop.

When small business owners step up with a vision, a diner on the corner, a new chapter for the family plumbing business, or a pet supply store, it is on the government to make sure the tools we have to support them actually work. Right now, they don't.

There hasn't been sufficient oversight of this program, and that means we haven't been doing all that we can to protect small business owners from fraud.

Over the last decade, there has been more than $335 million in documented loan agent fraud. That is why this bill matters.

It tackles this problem in two ways.

First, it creates accountability for loan agents by making sure that the people who connect businesses to resources don't operate in the dark.

Second, by requiring information on loan performance, default rates, and risk analysis, it gives Congress the data we need to do our jobs, making sure the 7(a) program works as intended, and protects small business owners.

It is on us to make sure that the programs we use to support small businesses actually work and work honestly.

Ensuring 7(a) loans work is important because the program is a lifeline. It is a way to make sure that when people go to apply for a loan, they are walking into a fair process, not a rigged one.

Whether it is the mom in Newark who wants to open up a store or the first-generation American in Bloomsburg, Pennsylvania, who wants to bring a taste of home to town, small businesses create good jobs. They give back. They reinvest, and they show us what is possible in our communities.

H.R. 1804, our 7(a) Loan Agent Oversight Act, is a smart, targeted fix and will help make sure that small business owners' dreams stay attainable.

Mr. Speaker, once again, I thank my colleague for co-leading this bill with me, and I also thank our ranking member and our chairman for their support. I urge my colleagues to support this bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 1804, the 7(a) Loan Agent Oversight Act.

The 7(a) loan program is the SBA's largest traditional lending program, providing access to capital for small businesses that cannot find it elsewhere. In fiscal year 2024, SBA approved more than 70,000 loans, totaling more than $31 billion.

Loan agents are an integral part of the 7(a) lending program, helping to facilitate access to capital for small businesses by connecting borrowers with SBA lenders or by offering other products. As of 2020, these agents helped facilitate 11 percent of the loans administered.

Unfortunately, some dishonest loan agents can contribute to fraud, casting a stain on the SBA's largest lending program and, ultimately, hurting borrowers and lenders alike.

As SBA increases its reliance on loan agents, it is essential that the agency have proper oversight of their involvement to minimize fraud. This will ensure that competent and honest agents can help screen borrowers, prepare forms, and better reach communities that need this capital most.

That is why this bill is so essential. The 7(a) Loan Agent Oversight Act would require SBA to establish a registration system that collects data on 7(a) loan agents to better track and evaluate the performance of loans for each individual agent.

Mr. Speaker, I thank Mr. Meuser and Mrs. McIver for their bipartisan collaboration on this bill, and I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentlewoman from New Jersey (Mrs. McIver).

Mr. Speaker, I thank my colleagues, Mr. Meuser and Mrs. McIver, for working together in a bipartisan way on behalf of strengthening the SBA's flagship 7(a) loan program.

For too long, a few bad actors have damaged one of the most successful small business capital access programs in the Federal Government. By giving the SBA the tools and authority it needs, we can root out bad behavior and minimize fraud without punishing loan agents that are acting in good faith on behalf of their clients and helping small businesses access the capital they need to grow.

I urge my colleagues to vote ``yes'' on H.R. 1804, and I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1804) to amend the Small Business Act to require a report on 7(a) agents, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on the bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 1804, the 7(a) Loan Agent Oversight Act, introduced by Representatives Meuser and McIver.

H.R. 1804 is an important piece of legislation that brings an additional layer of transparency in the fight against fraud in the Small Business Administration's flagship 7(a) loan program.

This bill would require the SBA Office of Credit Risk Management to submit annual reports to Congress on the 7(a) loan program. The reports would include the number and dollar value of fraudulent loans associated with loan agents. The SBA already collects this information, and an annual reporting requirement would allow for more effective oversight.

Similar versions of this bill have passed on the House floor with bipartisan support in both the 117th and 118th Congresses. I look forward to seeing the Senate take swift action on this bill, which supports President Trump's agenda to root out fraud and abuse.

Mr. Speaker, I urge my colleagues to support H.R. 1804, and I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from the great State of Pennsylvania (Mr. Meuser).

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I urge my colleagues to support this commonsense legislation, and I yield back the balance of my time.

The SPEAKER pro tempore (Mr. Sessions.) The question is on the motion offered by the gentleman from Texas (Mr. Williams) that the House suspend the rules and pass the bill, H.R. 1804.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I thank our chairman, Chairman Williams, for his continued leadership.

Mr. Speaker, I rise today along with my colleague, Democratic Member Mrs. McIver, in support of my bill, H.R. 1804, the 7(a) Loan Agent Oversight Act, which provides the Small Business Administration with the oversight capabilities to monitor its flagship loan program responsibly. This bipartisan legislation requires the SBA Office of Credit Risk Management to report on fraudulent loans made by a loan agent as well as the overall default rate on loans issued by those agents.

Loan agents are often the middlemen between the SBA, a 7(a) lender, and a small business. This legislation is necessary due to the increased role of loan agents in facilitating 7(a) loans to American small businesses.

The SBA inspector general reported that nearly one out of every seven loans involved a loan agent. Unfortunately, the inspector general also noted that there has been over $335 million in documented loan agent fraud. This, of course, needs to be corrected and changed, Mr. Speaker.

Additionally, my legislation requires the SBA to submit their findings to Congress, which allows us to conduct proper oversight of the 7(a) loan program, ensuring it remains a successful public-private partnership that helps small businesses thrive.

Though Administrator Loeffler is bringing a lot to this office and has reined in the Biden administration's weakening, frankly, of underwriting

standards in the 7(a) program, this bill advances good governance policies that will protect taxpayer dollars and uphold the program's record of success well beyond the next 4 years.

Mr. Speaker, I urge the passage of my bill.

Mr. Speaker, had I been present, I would have voted YEA on Roll Call No. 146 and YEA on Roll Call No. 147.