H.R. 4238: Disaster Loan Accountability and Reform Act

This bill, called the Disaster Loan Accountability and Reform Act (DLARA), aims to improve accountability and transparency in the disaster loan program managed by the Small Business Administration (SBA). Here are the main components of the bill:

Monthly Disaster Loan Reports

The bill requires the SBA to submit monthly reports regarding disaster loans that include detailed information on:

• The status and availability of funding for such loans.
• Any changes in the estimates or assumptions regarding obligations and expenditures related to the loans.

If the required reports are not submitted, funding for official travel by the SBA Administrator would be halted until the reports are provided.

Budget Requests Relating to Disaster Loans

The bill mandates that budget requests related to disaster loans must provide:

• Separate statements detailing the cost of SBA disaster loans for the current fiscal year compared to the 10-year average.
• Explanations for any discrepancies between the requested amounts and the historical averages.

Similar requirements are enforced for administrative costs associated with COVID-related disaster loans.

Limitations on Disaster Loans

The bill specifies that if the available balance for disaster loans falls below a certain threshold (10% of the 10-year average), the SBA Administrator must notify Congress within 24 hours. During this low-funding period, the Administrator may limit the amount of funds obligated for new loans to those requiring collateral.

Reports on Disaster Loan Account

The Comptroller General of the United States is tasked with preparing a report assessing the SBA's disaster loan account, including:

• The average rate at which disaster loan funds are allocated.
• Average amounts disbursed to borrowers during critical periods following loan acceptance.

The SBA must respond to these findings within 90 days of receiving the report.

GAO Report on Changes to Disaster Loans

The bill calls for a report from the Government Accountability Office (GAO) on recent modifications to disaster loan policies. This includes assessing the costs and implications of changes made under recent regulations concerning loan amounts and eligibility criteria.

Inspector General Review

The Inspector General of the SBA will conduct a review of any funding shortfall issues, including:

• Identifying reports the SBA was supposed to deliver to Congress but failed to provide.
• Examining the reasons for any significant deviations from intended uses of the funds.

The Inspector General must report findings within 180 days of the bill's enactment.

Budget and Forecasting Report

Within 30 days of the bill's enactment, the SBA must detail corrective actions planned for improving the data quality and forecasting related to disaster loan budgets. Subsequent updates regarding the implementation of these actions are required every 90 days until all corrections have been enacted.

Sunset Provision

The provisions of the amendments made by this bill will expire four years after the date of enactment.

Definitions

The bill provides definitions for critical terms such as "SBA disaster loan" and "Administrator," providing clarity on the specific regulations covered under the new law.

Relevant Companies

None found.