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HR 1804

7(a) Loan Agent Oversight Act

119th Congress Introduced by LaMonica McIver and 1 co-sponsor

The 7(a) Loan Agent Oversight Act mandates annual reports on loan agent activities to combat fraud, enhancing transparency and protecting small businesses from risks.

Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
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Bill Summary · HR 1804

Summary of HR 1804: 7(a) Loan Agent Oversight Act

Bill Overview

  • Bill Number: HR 1804
  • Title: 7(a) Loan Agent Oversight Act
  • Introduced: March 3, 2025
  • Status: Received in the Senate and referred to the Committee on Small Business and Entrepreneurship on June 4, 2025.

Purpose and Intent

The 7(a) Loan Agent Oversight Act aims to enhance oversight of the Small Business Administration's (SBA) 7(a) loan program by requiring the SBA's Office of Credit Risk Management (OCRM) to submit an annual report to Congress. This report will detail the performance, costs, and risks associated with loans generated through loan agent activities.

Key Provisions

  • Annual Reporting Requirement: The OCRM must provide Congress with a comprehensive report that includes:

    • Performance metrics of loans facilitated by loan agents.
    • Associated costs and risks linked to these loans.

  • Focus on Fraud Prevention: The legislation addresses the increased risk of fraud associated with loan agents, which has been a significant concern, particularly highlighted by over $335 million in documented fraud over the past decade.

Background and Need for Legislation

The 7(a) loan program is the SBA's primary lending initiative, allowing private sector lenders to provide loans up to $5 million to small businesses that struggle to access credit. Approximately 15% of these loans involve loan agents, although this percentage has declined since the COVID-19 pandemic. The need for this legislation arises from:
- A history of fraud associated with loan agents.
- The SBA's unique position to aggregate and analyze loan agent data, which is currently underutilized.

Impact

  • Small Businesses: The bill aims to protect small businesses from potential fraud by increasing transparency and accountability in the loan process.
  • Lenders: By providing aggregated data on loan agent performance, lenders can make more informed decisions regarding their partnerships with loan agents.
  • Congress: The annual reports will equip lawmakers with essential information to assess the effectiveness and risks of the 7(a) program.

Legislative Process

  • Committee Consideration: The bill was favorably reported by the Committee on Small Business without amendments on March 5, 2025.
  • House Vote: Passed in the House on June 3, 2025, with overwhelming support (405-3).
  • Next Steps: The bill is currently under consideration in the Senate.

Conclusion

The 7(a) Loan Agent Oversight Act represents a proactive step towards improving oversight and reducing fraud in the SBA's 7(a) loan program. By mandating annual reporting on loan agent activities, the legislation seeks to enhance the integrity of the lending process for small businesses across the nation.

Compiled from official sources — confirm details with the bill’s official record.

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