H.R. 1804: 7(a) Loan Agent Oversight Act

This bill, known as the 7(a) Loan Agent Oversight Act, proposes amendments to the Small Business Act with the goal of enhancing oversight and reporting related to 7(a) loan agents. Here’s a breakdown of what the bill entails:

Annual Reporting Requirements

The bill requires the Director of the Small Business Administration (SBA) to submit an additional annual report to Congress that includes specific information about 7(a) loan agents. This report must cover:

• The number of 7(a) agents: A count of agents assisting loan applicants, organized by type.
• Fraudulent loans: The number of loans deemed fraudulent that involved the services of 7(a) agents.
• Purchase rate analysis: The rate at which the SBA purchased loans with the involvement of 7(a) agents.
• Referral fees: Information on the number and total amount of fees paid to 7(a) agents, categorized by who paid them—either the loan applicant or the lender.
• Risk analysis: An analysis focused on agents responsible for a significant portion (1% or more) of the total dollar value and number of loans made.
• Interest rates: An assessment of interest rates on loans that involved the services of 7(a) agents.
• Communication methods: A description of how the SBA communicates with 7(a) agents.

Definitions

The bill defines key terms for clarity:

• 7(a) agent: A person providing covered services on behalf of a lender or loan applicant.
• Covered services: This encompasses helping in completing loan applications and offering consulting, brokering, or referral services related to 7(a) loans.

The overall intention of the bill is to improve the transparency and oversight of 7(a) loan processes, potentially reducing fraud and enhancing the effectiveness of these agents in facilitating small business loans.

Relevant Companies

• None found