7(a) Loan Agent Oversight Act
Officially: “7(a) Loan Agent Oversight Act” Read the full text
What it does
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1Short title
This section would give the Act its short title, the 7(a) Loan Agent Oversight Act.
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1. Short title This Act may be cited as the 7(a) Loan Agent Oversight Act .
2Report on 7(a) agents
This section would amend section 47 of the Small Business Act by adding a new subsection requiring the Director to submit an annual report to Congress on 7(a) agents, in addition to a report already required under a separate subsection of that section. For each calendar year covered, the new report would have to include: the number of 7(a) agents who assisted loan applicants under the section 7(a) loan program, broken down by the type of agent using information collected on the Fee Disclosure and Compensation Agreement or any later form that collects that same kind of information; the number of fraudulent loans made where the applicant used the services of a 7(a) agent; the rate at which the Administrator purchased loans where the applicant used the services of a 7(a) agent; the number and total dollar value of referral fees paid to 7(a) agents, broken down by whether the applicant or the 7(a) lender paid the fee; a combined risk analysis, without naming individual agents, covering the agents who are each responsible for at least 1 percent of both the dollar value of loans made with 7(a) agent assistance and the number of loans made with 7(a) agent assistance; an analysis of interest rates on loans where the applicant or the 7(a) lender used an agent's services; and a description of how the Administrator communicates with 7(a) agents. The new subsection would also define a 7(a) agent as a person who provides covered services on behalf of a lender or an applicant, and would define covered services as either helping complete an application for a loan under section 7(a) (including preparing a business plan, cash flow projections, financial statements, and related documents), or providing consulting, broker, or referral services for a loan under section 7(a).
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2. Report on 7 (a) agents Section 47 of the Small Business Act ( 15 U.S.C. 657t ) is amended by adding at the end the following new subsection: (j) Annual report (1) In general The Director shall submit to Congress, in addition to the report required under subsection (h)(2), an annual report including, for the calendar year covered by the report— (A) the number of 7(a) agents assisting applicants for loans under section 7(a), disaggregated by the type of 7(a) agents consistent with information reported on the Fee Disclosure and Compensation Agreement, or any subsequent agreement forms that collect such information; (B) the number of fraudulent loans made for which an applicant used services of a 7(a) agent; (C) the purchase rate by the Administrator of loans for which an applicant used services of a 7(a) agent; (D) the number and aggregate dollar value of referral fees paid to 7(a) agents, disaggregated by whether the applicant or 7(a) lender paid such fees; (E) without identifying individual 7(a) agents by name, a consolidated analysis of the risk created by the individual 7(a) agents responsible for not less than 1 percent of— (i) the dollar value of loans made with the assistance of 7(a) agents; and (ii) the number of loans made with the assistance of 7(a) agents; (F) an analysis of interest rates on loans for which an applicant or 7(a) lender used services of an agent; and (G) a description of how the Administrator communicates with 7(a) agents. (2) Definitions In this subsection: (A) 7(a) agent The term 7(a) agent means a person who provides covered services on behalf of a lender or applicant. (B) Covered services The term covered services means— (i) assistance with completing an application for a loan under section 7(a) (including preparing a business plan, cash flow projections, financial statements, and related documents); or (ii) consulting, broker, or referral services with respect to a loan under section 7(a). .
Where it is
In the House.