Summary#
This bill would change parts of the Small Business Investment Act of 1958 to strengthen oversight of the SBA Office of Credit Risk Management and the 504 loan program. It gives the Office authority to supervise certified development companies (CDCs), do file reviews of 504 loan closings, require corrections of deficiencies, and take enforcement actions. The bill requires annual portfolio risk analyses and a yearly report to Congress on December 1 starting in 2025. It allows the Office to collect fees from CDCs (starting one year after enactment) to cover oversight costs, and it sets limits on certain civil penalties. The bill also requires the SBA Administrator to issue rules, within 180 days of enactment, clarifying how eligible CDCs must follow the National Environmental Policy Act (NEPA).
What it means for you#
- Certified development companies will face more supervision. The Office must review loan closing files, supervise on-site and off-site reviews, and send written reports after reviews. CDCs may need to fix problems the Office finds.
- The Office will send file-review reports within 60 days of completing a review. The SBA must give CDCs a review report within 90 days after a review ends or notify them if it will be later. CDCs must respond to requested report responses within 45 business days.
- The Director may take informal or formal enforcement actions. Formal actions require approval by the Lender Oversight Committee and can include civil money penalties up to $250,000 for serious or repeated violations. CDCs that miss required annual reports by 60 days can be suspended up to 30 days or fined up to $10,000.
- CDCs may pay a fee, charged on a graduated scale by portfolio size, not to exceed 1 basis point of portfolio value. Fees are to be paid from servicing fees the CDCs collect.
- The SBA must issue rules about how CDCs comply with NEPA within 180 days.
Expenses#
- The bill lets the Office collect fees from CDCs starting 1 year after enactment. Fees must be graduated by portfolio size and cannot exceed 1 basis point of the portfolio value. Fees are intended to reduce to zero the Administrations cost of examinations, reviews, rulemakings, and other lender oversight activities created by the Act. CDCs must pay the fee from servicing fees they collect.
- The bill authorizes civil penalties (up to $250,000 for formal enforcement actions and up to $10,000 for certain late reports) and allows temporary suspensions of up to 30 days for missed reports.
- No publicly available information on the bills net cost, budgetary savings, or overall fiscal impact is provided in the text.
Proponents' View#
The bills text describes its purpose as enhancing the Office of Credit Risk Management, improving file reviews and supervision of CDCs, providing enforcement tools, requiring an annual portfolio risk analysis and report to Congress, and clarifying CDC obligations under NEPA.
Opponents' View#
No publicly available information.