06/03/2025 | Press release | Distributed by Public on 06/03/2025 18:08
WASHINGTON, D.C. - Today, the U.S. House of Representatives passed H.R. 1804, the 7(a) Loan Agent Oversight Act, introduced by Congressman Dan Meuser (PA-09).
This bipartisan legislation strengthens accountability and combats fraud within the Small Business Administration's (SBA) 7(a) Loan Program. It does so by requiring the Office of Credit Risk Management to submit an annual report to Congress regarding the performance of and risk associated with loans generated through loan agent activity.
The SBA's Inspector General has reported that nearly 15 percent of all 7(a) loans include a loan agent. Unfortunately, the OIG has also reported that there has been more than $335 million in documented loan agent fraud.
This legislation ensures that Congress receives the necessary data to provide proper oversight of the SBA's flagship loan program. It mandates reporting on the number of loans processed with the assistance of loan agents, default rates associated with those loans, and requires the SBA to conduct a risk analysis on agents participating in the program.
"Access to capital remains one of the greatest barriers to growth for entrepreneurs, and the SBA's 7(a) Loan Program must be efficient, stable, and well-managed," said Congressman Dan Meuser. "Unfortunately, the SBA's Office of Inspector General has highlighted a growing need for stronger oversight of 7(a) loan agents due to increased fraud risks, with over $335 million in documented loan agent fraud having been identified. My bill ensures that both Congress and the SBA have the necessary data to provide proper oversight by requiring the SBA's Office of Credit Risk Management to collect and report on fraudulent loans, default rates, and risk analysis of loan agents operating within the program. Strengthening transparency and accountability will protect taxpayer dollars, ensure the 7(a) Loan Program remains a successful public-private partnership, and help small businesses continue to access the capital they need to grow. I look forward to working with SBA Administrator Loeffler to uphold this program's record of success and to restore the prudent underwriting standards that were removed under the Biden administration."
In Fiscal Year 2023, the SBA's 7(a) loan program facilitated approximately 47,700 loans totaling $25.7 billion. The program serves as the SBA's primary lending tool for small businesses that cannot obtain credit elsewhere. Rather than issuing direct loans, the SBA provides loan guarantees to private lenders to support small business growth.
Earlier today, Congressman Meuser spoke on the House floor in favor of H.R. 1804 here.
Text of the legislation can be found here.