Washington, D.C. – U.S. Senator Jim Risch (R-ID), chairman of the Senate Committee on Small Business and Entrepreneurship, recently joined with House Small Business Committee Chairman Steve Chabot (R-OH), Ranking Member Nydia Velázquez (D-NY) and U.S. Senator Jeanne Shaheen (D-NH) to introduce and pass from both committees the Small Business 7(a) Lending Oversight Reform Act of 2018. This bipartisan, bicameral legislation, which will increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program, has earned high praise from industry experts and small business owners.
U.S. Chamber of Commerce: "S. 2283 would grant SBA flexibility it needs to get capital into the hands of job creators and innovators on Main Street, and would ensure that SBA is held accountable for its stewardship of the agency’s lending programs."
National Association of Government Guaranteed Lenders: "All too often, Congress and regulators find themselves having to react to a problem when it comes to the financial services industry. The Small Business 7(a) Lending Oversight Reform Act of 2018 attempts to break that cycle. S. 2283 is not reacting to a malady that needs to be quickly repaired to prevent disaster. Instead, this legislation is a bipartisan, bicameral approach to further improve a program that is performing well."
National Association of Federally-Insured Credit Unions: "Credit Unions actively participate in the 7(a) lending program as a way for them to mitigate loan risk and maximize small-business lending within their statutory member business loan cap. ... NAFCU supports this legislative effort and stands ready to work with [Chairman Risch] to improve the 7(a) loan program."
Independent Community Bankers of America: "I write to offer our support for the Small Business 7(a) Lending Oversight Reform Act of 2018 (S. 2283) as an important step toward ensuring the integrity and continued safety and soundness of the 7(a) program for the benefit of small business borrowers."
The 7(a) loan program is a SBA program that helps entrepreneurs and small businesses access credit to start and grow their businesses when they are unable to access funding through conventional lending. The Small Business 7(a) Lending Oversight Reform Act of 2018 preserves this important loan program by:
- Strengthening SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director;
- Enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options;
- Requiring SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis;
- Strengthening SBA’s Credit Elsewhere Test by clarifying the factors that must be considered.