Small Business Lending Fraud Prevention Act

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7401) to require employees of the Small Business Administration to certify that the employee does not have any prohibited conflicts of interest with respect to loans in which the employee is involved, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may 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 in strong support of H.R. 7401, the Small Business Lending Fraud Prevention Act, introduced by the gentleman from Pennsylvania (Mr. Meuser) and the gentlewoman from New Hampshire (Ms. Goodlander).

Last year, a former SBA loan officer pled guilty to submitting false statements in order to fraudulently secure over $500,000 in pandemic relief loans for herself and family members. When the SBA initially denied the loans, the SBA employee approved them herself.

The SBA Office of Inspector General identified multiple instances in which SBA employees approved loans to relatives or others who were barred from conflict of interest rules and noted that such cases were rarely prosecuted. We must take serious steps to avoid such cases in the future. It should not be possible for fraud like this to occur.

This bipartisan legislation offers a commonsense solution to add a layer of security to crack down on loan fraud. H.R. 7401 requires SBA employees to certify that they have no conflicts of interest before processing a loan, to disclose any conflicts immediately, and to recuse themselves if a conflict of interest is discovered.

It is our responsibility to ensure taxpayer funds are handled appropriately. This bill will provide a safeguard against improper loan approvals and establish a clear basis for prosecution if an employee knowingly approves loans prohibited by conflict of interest rules.

Mr. Speaker, I urge my colleagues to support H.R. 7401, and I reserve the balance of my time.

Mr. Speaker, we must pass H.R. 7401 to strengthen integrity in SBA lending programs by requiring employees involved in loan decisions to certify they have no prohibited conflicts of interest.

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

Mr. Speaker, I urge my colleagues to vote in favor of H.R. 7401 to support transparency, accountability, and public confidence in the administration of SBA loans, and I yield back the balance of my time.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

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

Mr. Speaker, I rise in support of the Small Business Lending Fraud Prevention Act.

Let me begin by commending Representatives Meuser and Goodlander for their bipartisan work on this bill, which would enhance SBA's internal processes to further detect fraud.

As the chairman mentioned, recently an SBA loan officer pled guilty to making false statements after approving more than $550,000 in fraudulent COVID-19 pandemic loans for herself and for family members.

The previous administration identified the wrongdoing, terminated the employee, and referred the case to the Office of Inspector General. This proves that the process worked. However, requiring loan officers to attest that they are not violating any conflict of

interest laws or regulations every time they originate, review, or approve a loan is a simple step that further reinforces ethical standards and reminds them that misconduct has consequences. Implementing this practice will help to increase accountability, strengthen compliance, and deter fraud.

Mr. Speaker, I am pleased to support this bipartisan bill, and I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, in closing, this committee has played an integral role in conducting oversight of SBA programs, especially the pandemic relief programs. Approximately $1.2 trillion of economic aid was distributed through SBA's pandemic relief programs over the course of the pandemic, providing economic relief to small businesses all over the country.

Unfortunately, bad actors took advantage of the programs, and it has become clear that we need to work together to recover fraudulent dollars. The previous administration took strong steps to root out fraud and to put internal controls in place to prevent it, and the Inspector General has been working diligently to uncover fraudulent schemes.

The bottom line is that the current process worked. The bad actor at the SBA was identified, investigated, and prosecuted. Moving forward, SBA employees being required to certify there is no conflict of interest before approving a loan provides an extra layer of security which will help deter fraud.

Once again, I applaud Representatives Goodlander and Meuser for working together on this bill that enhances conflict of interest laws at SBA and provides even more accountability.

Mr. Speaker, I yield back the balance of my time.

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