Microloan Transparency and Accountability Act of 2023
Floor Speech
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Mr. WILLIAMS of Texas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 449) to amend the Small Business Act to increase transparency, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 449
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Microloan Transparency and Accountability Act of 2023''. SEC. 2. PORTFOLIO RISK ANALYSIS OF MICROLOANS.
Section 7(m)(10) of the Small Business Act (15 U.S.C. 636(m)(10)) is amended--
(1) by redesignating subparagraphs (A) through (F) as clauses (i) through (vi), respectively, and adjusting the margins accordingly;
(2) by amending clause (iv), as so redesignated, to read as follows:
``(vi) the number, amount, and percentage of microloans made by intermediaries to small business concerns--
``(I) that went into default in the previous year; and
``(II) that were charged off in the previous year by such intermediaries;'';
(3) in clause (vi), as so redesignated, by striking ``and'' at the end;
(4) by redesignating subparagraph (G) as clause (xviii), and adjusting the margin accordingly;
(5) by striking ``On November 1, 1995,'' and all that follows through ``the following:'' and inserting the following:
``(A) In general.--Beginning on February 1, 2023, and annually thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, and make available to the public on the website of the Administration, a report on the effectiveness of the microloan program during the fiscal year preceding the date of the report. Such report shall include--'';
(6) in subparagraph (A), as so designated, by inserting after clause (vi) the following new clauses:
``(vii) the number and type of enforcement actions taken by the Administrator against noncompliant intermediaries;
``(viii) an analysis of compliance by intermediaries with the credit availability requirements of paragraph (3)(E) for loans in an amount greater than $20,000;
``(ix) the extent to which microloans are provided to small business concerns in rural areas;
``(x) the number of underserved borrowers, as defined by the Administration, participating in the microloan program;
``(xi) the average rate of interest for each microloan;
``(xii) the average amount of fees charged for each microloan;
``(xiii) the average size of each microloan, including--
``(I) the number of loans made in an amount greater than $20,000; and
``(II) the average size and charge-off rate of such loans;
``(xiv) the subsidy cost to the Administration;
``(xv) the number and percentage of microloans that were made to refinance other loans;
``(xvi) the number and percentage of microloans made to new program participants and the number and percentage of microloans made to previous program participants;
``(xvii) the average amount of technical assistance grant monies spent on each loan; and''; and
(7) by adding at the end the following:
``(B) Privacy.--Each report submitted under subparagraph (A) shall not contain any personally identifiable information of any borrower.''.
Mr. Speaker, I rise in support of H.R. 449, the Microloan Transparency and Accountability Act.
When an entrepreneur wants to start a business, finding starting capital can be one of the hardest challenges there is. SBA's microloan program looks to solve this issue and provide capital to people who need help getting their businesses off the ground.
While this program is well intended, Congress currently doesn't have access to some key metrics that we need to evaluate the effectiveness of this program. For example, it would be very helpful to have a comprehensive review of where the loans are being distributed to see if it is being utilized in many rural areas of the country. Additionally, we are currently left in the dark about the overall risk profile of the entirety of the program.
This bill would solve these problems by directing the SBA to do a comprehensive analysis to evaluate the effectiveness of this program.
The Microloan Transparency and Accountability Act will provide Congress with much-needed insight to make determinations on how to better optimize this program to assist small businesses.
I thank my colleague from Tennessee, who has advanced this bill for the last few Congresses, for his dedication to improving this program.
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Mr. WILLIAMS of Texas.
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Mr. WILLIAMS of Texas. Mr. Speaker, I have no further speakers, and I am prepared to close.
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Mr. WILLIAMS of Texas. Mr. Speaker, the microloan program which delivers capital assistance to the Nation's smallest businesses is an important lending tool at the SBA.
H.R. 449, the Microloan Transparency and Accountability Act, will deliver comprehensive data and information on the effectiveness of the program. I applaud all of the members for working on this important legislation in an effort to shine more light on how well the program is working.
From my State of Texas to both of the Nation's coasts, accessing capital remains a top challenge facing all small businesses. We must ensure these programs and tools are operating at a high level and delivering on the goals that Congress set for them.
Mr. Speaker, I urge my colleagues to support H.R. 449, and I yield back the balance of my time.
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