7(a) Loan Agent Oversight Act

Bill Number: H.R. 1804
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Commerce
Status: Passed House
Latest Action: 2025-06-04: Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
Last Updated: 2026-07-10T19:43:24Z

AI-Generated Summary

Purpose

The "7(a) Loan Agent Oversight Act" aims to improve transparency and oversight of third-party agents involved in the Small Business Administration's (SBA) 7(a) loan program. The 7(a) program provides government-backed loans to small businesses for purposes like starting or expanding operations. This legislation requires the SBA to report annually on these agents to help Congress monitor potential risks, fraud, and program efficiency.

Key Provisions

Annual Reporting Requirement: The SBA Director must submit an annual report to Congress covering the previous calendar year, in addition to existing reports under the Small Business Act.
Report Contents:
Number of 7(a) agents assisting loan applicants, broken down by agent type (based on SBA's Fee Disclosure and Compensation Agreement forms).
Number of fraudulent 7(a) loans where an agent was used.
Rate at which the SBA purchases (guarantees) loans involving agents.
Number and total dollar value of referral fees paid to agents, separated by whether paid by the applicant (borrower) or the lender.
Anonymous risk analysis of individual agents handling at least 1% of the dollar value or number of agent-assisted loans.
Analysis of interest rates on loans where agents were involved.
Description of how the SBA communicates with 7(a) agents.
Definitions:
7(a) Agent: A person or entity providing "covered services" for a lender or loan applicant.
Covered Services: Help with loan applications (e.g., preparing business plans, cash flow projections, financial statements) or consulting, brokerage, or referral services related to 7(a) loans.

Significant Changes to Existing Law

Amends Section 47 of the Small Business Act (15 U.S.C. 657t) by adding a new subsection (j).
Introduces a mandatory annual report focused specifically on 7(a) agents, which was not previously required. This builds on existing reporting under subsection (h)(2) but adds detailed, agent-specific data to enhance monitoring without altering core loan program rules.

Potential Impacts

On Government Agencies: Increases administrative workload for the SBA to collect and analyze data, potentially leading to better fraud detection and program adjustments.
On Citizens (Small Businesses): May reduce risks of fraud or high fees in the loan process, making the 7(a) program more trustworthy for applicants seeking affordable financing.
On International Relations: No direct impact, as this is a domestic small business lending initiative.
Overall, could lead to fewer fraudulent loans and more equitable fee structures, benefiting the economy by supporting legitimate small business growth.

Main Stakeholders Affected

SBA and Its Director: Responsible for preparing and submitting the reports.
Congress: Receives the reports to oversee the program and inform future legislation.
7(a) Agents: Subject to data collection and risk analysis, which may increase scrutiny on their practices.
Small Business Applicants and Lenders: Indirectly affected through potential improvements in loan integrity, fee transparency, and interest rate fairness.

Notable Legal, Constitutional, or Political Implications

Legal: Enhances accountability under the Small Business Act without creating new penalties; focuses on data-driven oversight to prevent abuse in federal loan guarantees.
Constitutional: Aligns with Congress's spending power and oversight of executive agencies, ensuring transparency in taxpayer-funded programs.
Political: Promotes bipartisan interest in small business support by addressing fraud risks, potentially influencing future SBA budgets or reforms based on report findings. No major controversies noted in the bill text.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Meuser, Daniel [R-PA-9]

Cosponsors (1)

Rep. McIver, LaMonica [D-NJ-10]

Recent Actions

2025-06-04: Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
2025-06-03: Motion to reconsider laid on the table Agreed to without objection.
2025-06-03: On motion to suspend the rules and pass the bill Agreed to by the Yeas and Nays: (2/3 required): 405 - 3 (Roll no. 147). (text: CR H2398) (Roll call 147)
2025-06-03: Passed/agreed to in House: On motion to suspend the rules and pass the bill Agreed to by the Yeas and Nays: (2/3 required): 405 - 3 (Roll no. 147). (text: CR H2398) (Roll call 147)
2025-06-03: Considered as unfinished business. (consideration: CR H2403-2404)
2025-06-03: At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
2025-06-03: DEBATE - The House proceeded with forty minutes of debate on H.R. 1804.
2025-06-03: Considered under suspension of the rules. (consideration: CR H2398-2399)
2025-06-03: Mr. Williams (TX) moved to suspend the rules and pass the bill.
2025-03-24: Placed on the Union Calendar, Calendar No. 22.
2025-03-24: Reported by the Committee on Small Business. H. Rept. 119-33.
2025-03-24: Reported by the Committee on Small Business. H. Rept. 119-33.
2025-03-05: Ordered to be Reported by the Yeas and Nays: 25 - 0.
2025-03-05: Committee Consideration and Mark-up Session Held
2025-03-03: Referred to the House Committee on Small Business.

Bill Versions

7(a) Loan Agent Oversight Act — issued 2025-06-03 — PDF (6 pages)
7(a) Loan Agent Oversight Act — issued 2025-03-03 — PDF (3 pages)
7(a) Loan Agent Oversight Act — issued 2025-06-04 — PDF (4 pages)
7(a) Loan Agent Oversight Act — issued 2025-03-24 — PDF (6 pages)