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H.R. 4531 (117th): 7(a) Loan Agent Oversight Act

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The text of the bill below is as of Nov 3, 2021 (Referred to Senate Committee). The bill was not enacted into law.

IIB

117th CONGRESS

1st Session

H. R. 4531

IN THE SENATE OF THE UNITED STATES

November 3, 2021

Received; read twice and referred to the Committee on Small Business and Entrepreneurship

AN ACT

To amend the Small Business Act to require a report on 7(a) agents, and for other purposes.

1.

Short title

This Act may be cited as the 7(a) Loan Agent Oversight Act.

2.

Report on 7(a) agents

Section 47 of the Small Business Act (15 U.S.C. 657t) is amended by adding at the end the following new subsection:

(j)

Annual report

(1)

In general

The Director shall submit to Congress, in addition to the report required under subsection (h)(2), an annual report including, for the calendar year covered by the report—

(A)

the number of 7(a) agents assisting applicants for loans under section 7(a), disaggregated by 7(a) agents who are attorneys, accountants, consultants, packagers, and lender service providers (as defined by section 103.1 of title 13, Code of Federal Regulations);

(B)

the number of fraudulent loans made for which an applicant used services of a 7(a) agent;

(C)

the purchase rate by the Administrator of loans for which an applicant used services of a 7(a) agent;

(D)

the number and aggregate dollar value of referral fees paid to 7(a) agents, disaggregated by whether the applicant or 7(a) lender paid such fees;

(E)

without identifying individual 7(a) agents by name, a consolidated analysis of the risk created by the individual 7(a) agents responsible for not less than 1 percent of—

(i)

the dollar value of loans made with the assistance of 7(a) agents; and

(ii)

the number of loans made with the assistance of 7(a) agents;

(F)

an analysis of interest rates on loans for which an applicant or 7(a) lender used services of an agent; and

(G)

a description of how the Administrator communicates with 7(a) agents.

(2)

Definitions

In this subsection:

(A)

7(a) agent

The term 7(a) agent means a person who provides covered services on behalf of a lender or applicant.

(B)

Covered services

The term covered services means—

(i)

assistance with completing an application for a loan under section 7(a) (including preparing a business plan, cash flow projections, financial statements, and related documents); or

(ii)

consulting, broker, or referral services with respect to a loan under section 7(a).

.

Passed the House of Representatives November 2, 2021.

Cheryl L. Johnson,

Clerk