Small Business 7(A) Lending Oversight Reform Act of 2018

Floor Speech

Mr. Speaker, I rise in support of H.R. 4743, a bipartisan, bicameral bill that will improve oversight of the 7(a) Loan Program, the SBA's flagship lending product.

At the beginning of this Congress, our committee held a series of hearings to take the temperature of the 7(a) program. We actively investigated how it is being utilized, and we worked with stakeholders to address the deficiencies that were identified.

Both lenders and the agency have said oversight could be improved and transparency increased with legislative action. This bill is the product of that feedback and will make long overdue reforms to the program.

The legislation increases transparency and uniformity for both lenders and the agency by codifying the Office of Credit Risk Management and Lender Oversight Committee. It also requires the Office to internally submit a budget to ensure there is justification of the fees, salaries, and expenses used to carry out oversight functions.

We also heard that the credit elsewhere test--a bedrock of the program--was not clear and lacked a verification component. This bill better clarifies the credit elsewhere test and bolsters substantiation of how it is fulfilled.

Finally, we all remember 2015, when the program ran out of authority to lend before the end of the year. This created an artificial run on the lenders to get loans approved, unfairly harmed small businesses that needed credit, and ultimately required congressional intervention.

Today's bill incorporates provisions from legislation I introduced earlier this year, empowering the Administrator to request additional lending capacity from Congress to meet unexpected demands late in the fiscal year.

H.R. 4743 strikes a meaningful balance between strong oversight and protecting the interests of small businesses that need loans.

Mr. Speaker, I urge Members to support this legislation, and I reserve the balance of my time.

Mr. Speaker, in crafting H.R. 4743, the chairman and I worked closely with our Senate counterparts, the SBA, and the lending industry. Everyone had a seat at the table, and through debate and compromise, we arrived at a legislative product we can all be proud of, and that, most importantly, will help deserving small businesses access loans.

Mr. Speaker, I would like to take this opportunity to thank Chairman Chabot and Senators Risch and Cardin for their bipartisanship. And, finally, I would like to thank our staff for working diligently on this important bill.

Mr. Speaker, I urge my colleagues to vote ``yes,'' and I yield back the balance of my time.

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