H.R. 7401: Small Business Lending Fraud Prevention Act

This bill, known as the Small Business Lending Fraud Prevention Act, aims to establish procedures within the Small Business Administration (SBA) to prevent conflicts of interest among its employees who are involved in the loan process. The key provisions of the bill are outlined below:

Certification Requirement

Starting 270 days after the enactment of this Act, any employee of the SBA who will be involved in the origination, review, or approval of loans must complete a certification process. This process includes three primary obligations:

• The employee must certify in writing that, to their knowledge, they do not have any prohibited conflicts of interest related to the loan, as defined by specific federal regulations.
• If the employee becomes aware of any such conflict of interest after submitting their certification, they must promptly disclose it to their supervisor and recuse themselves from any participation in the loan process.
• The employee must be aware of the relevant federal laws and regulations related to conflicts of interest pertaining to their role in the loan transaction.

Regulatory Implementation

The bill requires the Administrator of the SBA to issue regulations that will implement these certification requirements within 180 days after the bill's enactment. This ensures that there is a clear framework in place for compliance with the law.

Definitions

The bill provides specific definitions to clarify the terms used, including:

• Administration: Refers to the Small Business Administration.
• Administrator: Refers to the head of the Small Business Administration.

Overall Purpose

The overarching goal of the Small Business Lending Fraud Prevention Act is to enhance transparency and integrity in the loan approval process within the SBA, ensuring that employees act without conflicts of interest so as to protect the interests of small businesses seeking loans.

Relevant Companies

None found.