Bills of Congress by U.S. Congress

H.R.1804 - 7(a) Loan Agent Oversight Act (119th Congress)

Summary

H.R.1804, the 7(a) Loan Agent Oversight Act, aims to amend the Small Business Act by requiring the Director to submit an annual report to Congress regarding 7(a) agents. This report will include data on the number of agents, fraudulent loans involving agents, loan purchase rates, referral fees, risk analysis of agents contributing significantly to loan volume, interest rate analysis, and communication methods with agents. The bill defines '7(a) agent' as someone providing covered services like application assistance or consulting for 7(a) loans.

Expected Effects

The primary effect of this bill would be increased transparency and oversight of 7(a) loan agents. This could lead to better regulation and potentially reduce fraud within the Small Business Administration's loan programs. The annual report would provide Congress with valuable data to inform future policy decisions regarding small business lending.

Potential Benefits

  • Increased transparency in the 7(a) loan program.
  • Potential reduction in fraudulent loans.
  • Better understanding of the role and impact of 7(a) agents.
  • Data-driven policy making regarding small business lending.
  • Enhanced accountability for 7(a) agents.

Potential Disadvantages

  • Increased administrative burden on the Director to compile the report.
  • Potential for the report to be used for political purposes.
  • Possible chilling effect on legitimate 7(a) agents due to increased scrutiny.
  • The cost of compliance for 7(a) lenders may increase, potentially passed on to borrowers.
  • The analysis of risk created by individual agents could lead to unfair targeting or reputational damage.

Constitutional Alignment

The bill appears to align with the Constitution, specifically Article I, Section 8, which grants Congress the power to regulate commerce and enact laws necessary and proper for carrying out its enumerated powers. The oversight of small business loans falls under this purview. There are no apparent infringements on individual liberties or rights as defined by the Bill of Rights.

Impact Assessment: Things You Care About

This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).