Licensing of small business lending companies

(a)

In general

Section 7(a)(17) of the Small Business Act (15 U.S.C. 636(a)(17)) is amended to read as follows:

(17)

Licensing of small business lending companies

(A)

In general

The Administration shall authorize lending institutions and other entities, including small business lending companies, non-Federally regulated lenders, and non-depository lending institutions, in addition to banks to make loans authorized under this subsection.(B)

Criteria

In authorizing lending institutions and other entities under subparagraph (A), the Administration shall ensure that each such institution or other entity—(i)provides an independent audit by a third party or internal independent audit department that examines adherence to all applicable Federal anti-money laundering, terrorist financing, sanctions, and financial crimes laws and regulations; and(ii)has in place a compliance program that is designed to be in conformance with all relevant anti-money laundering laws and regulations expectations described in the Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual and other regulatory guidance, including—(I)an annual financial crimes risk assessment;(II)designation of an anti-money laundering Officer;(III)a customer identification program;(IV)customer due diligence and enhanced due diligence;(V)suspicious activity monitoring and reporting;(VI)information sharing;(VII)record retention;(VIII)sanctions implemented by the Office of Foreign Assets Control;(IX)annual employee training, including general training and job-specific training; and(X)monitoring and testing. (C)

Prohibition on moratorium

The Administration may not impose a moratorium on the licensing of lending institutions described in subparagraph (A).(D)

New applicants

Not later than 1 year after the date of enactment of the Expanding Access to Affordable Credit for Small Businesses Act, the Administration shall begin accepting applications for the licensing of lending institutions described in subparagraph (A).(E)

Reports

Not later than 1 year after the date of enactment of the Expanding Access to Affordable Credit for Small Businesses Act, and annually thereafter, the Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report that includes, with respect to the year preceding the report—(i)the number of lending institutions and other entities described in subparagraph (A) that applied to make loans under this subsection;(ii)the number of lending institutions and other entities described in subparagraph (A) that the Administration approved to make loans under this subsection;(iii)if the application of a lending institution or other entity described in subparagraph (A) was denied, the reason why for each such denial;(iv)the number and total amount of loans made by under this subsection by lending institutions and other entities described in subparagraph (A); and(v)demographic information on the recipients of the loans described in clause (iv). (F)

Rule of construction

Nothing in this paragraph shall be construed to provide authority to the Administration to regulate small business lending companies, non-Federally regulated lenders, or non-depository lending institutions.

(b)

Funding

There is authorized to be appropriated for the Office of Credit Risk Management of the Small Business Administration such sums as may be necessary to conduct oversight of lenders authorized under section 7(a)(17) of the Small Business Act (15 U.S.C. 636(a)(17)).