CEASE Act of 2025

119th Congress

The CEASE Act caps for-profit Small Business Lending Companies at 16, enhancing SBA oversight and protecting community banks in small business lending.

Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.

Overview

The Capping Excessive Awarding of SBLC Entrants Act of 2025, known as the CEASE Act of 2025, was introduced in the House of Representatives on April 24, 2025. The bill aims to amend the Small Business Act by limiting the number of for-profit Small Business Lending Companies (SBLCs) authorized to issue loans under the SBA's 7(a) loan program to 16. The bill has passed the House and is currently under consideration in the Senate, having been referred to the Committee on Small Business and Entrepreneurship.

Purpose and Intent

The primary purpose of the CEASE Act is to restore oversight capabilities to the Small Business Administration (SBA) regarding SBLCs. The legislation seeks to address concerns about the integrity of SBA's loan programs following the lifting of a 40-year moratorium on new SBLC licenses, which was enacted in 2023. By capping the number of SBLCs, the bill aims to ensure that federally regulated lenders, such as community banks, remain a vital part of the 7(a) lending landscape.

Key Provisions

Limitation on SBLCs: The bill stipulates that no more than 16 for-profit SBLCs can be authorized to make loans under the SBA's 7(a) program at any given time.

Regulatory Oversight: The SBA will maintain its role as the primary regulator of SBLCs, which are not subject to the same safety and soundness regulations as traditional banks.

Impact

Small Business Lending: The bill is expected to impact the small business lending landscape by limiting the number of for-profit lenders, potentially enhancing the quality of oversight and reducing risks associated with an influx of new SBLCs.

Community Banks: By ensuring that the number of SBLCs remains capped, the bill aims to protect the interests of community banks, which play a crucial role in providing loans to small businesses.

Legislative Timeline

April 24, 2025: Introduced in the House.

April 30, 2025: Ordered to be reported (amended) by the Committee on Small Business.

May 21, 2025: Reported (amended) by the Committee on Small Business (H. Rept. 119-107).

June 5, 2025: Passed by the House with a vote of 214 - 198.

June 9, 2025: Received in the Senate, read twice, and referred to the Committee on Small Business and Entrepreneurship.

Conclusion

The CEASE Act of 2025 is a legislative effort to regulate the number of for-profit SBLCs in the U.S., aiming to enhance the oversight of small business lending and ensure the continued role of community banks in supporting small businesses. As the bill progresses through the Senate, it will be closely monitored for its potential implications on small business financing and the broader lending environment.

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