[Congressional Record Volume 155, Number 165 (Friday, November 6, 2009)]
[House]
[Pages H12466-H12469]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           SMALL BUSINESS MICROLENDING EXPANSION ACT OF 2009

  Ms. VELAZQUEZ. Madam Speaker, I move to suspend the rules and pass 
the bill (H.R. 3737) to amend the Small Business Act to improve the 
Microloan Program, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3737

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Microlending 
     Expansion Act of 2009''.

     SEC. 2. MICROLOAN CREDIT BUILDING INITIATIVE.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
     is amended by adding at the end the following:
       ``(14) Credit reporting information.--The Administrator 
     shall establish a process, for use by an intermediary making 
     a loan to a borrower under this subsection, under which the 
     intermediary shall provide to the major credit reporting 
     agencies the information about the borrower, both positive 
     and negative, that is relevant to credit reporting, such as 
     the payment activity of the borrower on the loan. Such 
     process shall allow an intermediary the option of providing 
     information to the major credit reporting agencies through 
     the Administration or independently.''.

     SEC. 3. FLEXIBLE CREDIT TERMS.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), 
     as amended by this Act, is further amended--
       (1) in paragraph (1)(B)(i) by striking ``short-term,'';
       (2) in paragraph (6)(A) by striking ``short-term,''; and
       (3) in paragraph (11)(B) by striking ``short-term,''.

     SEC. 4. INCREASED PROGRAM PARTICIPATION.

       Section 7(m)(2) of the Small Business Act (15 U.S.C. 
     636(m)(2)) is amended--
       (1) in subparagraph (A) by striking ``paragraph (10)'' and 
     inserting ``paragraph (11)''; and
       (2) by amending subparagraph (B) to read as follows:
       ``(B) has--
       ``(i) at least--

       ``(I) 1 year of experience making microloans to startup, 
     newly established, or growing small business concerns; or
       ``(II) 1 full-time employee who has not less than 3 years 
     of experience making microloans to startup, newly 
     established, or growing small business concerns; and

       ``(ii) at least--

       ``(I) 1 year of experience providing, as an integral part 
     of its microloan program, intensive marketing, management, 
     and technical assistance to its borrowers; or
       ``(II) 1 full-time employee who has not less than 1 year of 
     experience providing intensive marketing, management, and 
     technical assistance to borrowers.''.

     SEC. 5. INCREASED LIMIT ON INTERMEDIARY BORROWING.

       Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
     636(m)(3)(C)) is amended--
       (1) by striking ``$750,000'' and inserting ``$1,000,000'';
       (2) by striking ``$3,500,000'' and inserting 
     ``$7,000,000''; and
       (3) by adding at the end the following: ``The Administrator 
     may treat the amount of $7,000,000 in this subparagraph as if 
     such amount is $10,000,000 if the Administrator determines, 
     with respect to an intermediary, that such treatment is 
     appropriate.''.

     SEC. 6. EXPANDED BORROWER EDUCATION ASSISTANCE.

       Section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 
     636(m)(4)(E)) is amended--
       (1) in clause (i) by striking ``25 percent'' and inserting 
     ``35 percent''; and
       (2) in clause (ii) by striking ``25 percent'' and inserting 
     ``35 percent''.

     SEC. 7. YOUNG ENTREPRENEURS PROGRAM.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended by adding at the end the following:
       ``(G) Young entrepreneurs program.--
       ``(i) In general.--An intermediary that receives a grant 
     under paragraph (1)(B)(ii) may establish a program for the 
     geographic area served by such intermediary that provides to 
     young entrepreneurs technical assistance regarding the 
     following:

       ``(I) Establishing or operating a small business concern in 
     the geographic area served by the intermediary.

[[Page H12467]]

       ``(II) Acquiring or securing financing to carry out the 
     activities described in subclause (I).

       ``(ii) Young entrepreneur defined.--For purposes of this 
     subparagraph, a young entrepreneur is an individual who--

       ``(I) is 25 years of age or younger; and
       ``(II) has resided in the geographic area served by the 
     intermediary for not less than 2 years.

       ``(iii) Good faith effort requirement.--If a young 
     entrepreneur who receives technical assistance under this 
     subparagraph from an intermediary establishes or operates a 
     small business concern, the young entrepreneur shall make a 
     good faith effort to establish or operate such concern in the 
     geographic area served by the intermediary.
       ``(iv) Deferred repayment.--If a small business concern 
     established or operated by a young entrepreneur receives a 
     loan under this subsection, such concern may defer repayment 
     on such loan for a period of not more than 6 months beginning 
     on the date that such concern receives the final disbursement 
     of such loan.''.

     SEC. 8. INTEREST RATES AND LOAN SIZE.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), 
     as amended by this Act, is further amended--
       (1) in paragraph (3)(F)(iii) by striking ``$7,500'' and 
     inserting ``$10,000'';
       (2) in paragraph (6)(C)(i) by striking ``$7,500'' and 
     inserting ``$10,000''; and
       (3) in paragraph (6)(C)(ii) by striking ``$7,500'' and 
     inserting ``$10,000''.

     SEC. 9. REPORTING REQUIREMENT.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), 
     as amended by this Act, is further amended by adding at the 
     end the following:
       ``(15) Reporting requirement.--Not later than 90 days after 
     the end of each fiscal year, the Administrator shall submit 
     to the Committee on Small Business of the House of 
     Representatives and the Committee on Small Business and 
     Entrepreneurship of the Senate a report that includes, with 
     respect to such fiscal year of the microloan program, the 
     following:
       ``(A) The names and locations of each intermediary that 
     received funds to make microloans or provide marketing, 
     management, and technical assistance.
       ``(B) The amounts of each loan and each grant provided to 
     each such intermediary in such fiscal year and in prior 
     fiscal years.
       ``(C) A description of the contributions from non-Federal 
     sources of each such intermediary.
       ``(D) The number and amounts of microloans made by each 
     such intermediary to all borrowers and to each of the 
     following:
       ``(i) Women entrepreneurs and business owners.
       ``(ii) Low-income entrepreneurs and business owners.
       ``(iii) Veteran entrepreneurs and business owners.
       ``(iv) Disabled entrepreneurs and business owners.
       ``(v) Minority entrepreneurs and business owners.
       ``(E) A description of the marketing, management, and 
     technical assistance provided by each such intermediary to 
     all borrowers and to each of the following:
       ``(i) Women entrepreneurs and business owners.
       ``(ii) Low-income entrepreneurs and business owners.
       ``(iii) Veteran entrepreneurs and business owners.
       ``(iv) Disabled entrepreneurs and business owners.
       ``(v) Minority entrepreneurs and business owners.
       ``(F) The number of jobs created and retained as a result 
     of microloans and marketing, management, and technical 
     assistance provided by each such intermediary.
       ``(G) The repayment history of each such intermediary.
       ``(H) The number of businesses that achieved success after 
     receipt of a microloan.''.

     SEC. 10. SURPLUS INTEREST RATE SUBSIDY FOR BUSINESSES.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), 
     as amended by this Act, is further amended by adding at the 
     end the following:
       ``(16) Interest assistance.--The Administrator is 
     authorized to make grants to intermediaries for the purposes 
     of reducing interest rates charged to borrowers that receive 
     financing under this subsection.''.

     SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended by inserting after subsection (e) the following:
       ``(f) Fiscal Years 2010 and 2011 With Respect to Section 
     7(m).--
       ``(1) Program levels.--For the programs authorized by this 
     Act, the Administration is authorized to make during each of 
     fiscal years 2010 and 2011--
       ``(A) $80,000,000 in technical assistance grants, as 
     provided in section 7(m);
       ``(B) $110,000,000 in direct loans, as provided in section 
     7(m); and
       ``(C) $10,000,000 in interest assistance grants, as 
     provided in section 7(m)(16).
       ``(2) Authorization of appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     paragraph (1).''.

     SEC. 12. REGULATIONS.

       Except as otherwise provided in this Act or in amendments 
     made by this Act, after an opportunity for notice and 
     comment, but not later than 180 days after the date of the 
     enactment of this Act, the Administrator shall issue 
     regulations to carry out this Act and the amendments made by 
     this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New York (Ms. Velazquez) and the gentleman from Missouri (Mr. Graves) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from New York.
  Ms. VELAZQUEZ. Madam Speaker, I just would like the record to reflect 
the fact that I am a Mets fan, and I do not associate myself with the 
previous comments.
  During economic downturns, like the one our Nation faces today, many 
Americans who cannot find work elsewhere take the initiative to launch 
their own ventures. Time and time again, these start-up businesses have 
helped strengthen the economy, created new jobs, and led our Nation to 
recovery. And in the short term, these new businesses give hard-working 
Americans a way to support their families when times are tough.
  The Small Business Administration's microloan program helps 
entrepreneurs secure the start-up capital they need to get new ventures 
off the ground. Microloans have always been a great tool for job 
creation. At its core, this program is about helping Americans with a 
good business idea take the first step to get a new business off the 
ground.

                              {time}  1000

  New businesses mean new jobs. With this bill, we are making the 
microloan program an even more powerful tool for job creation.
  The legislation before us will make a number of important changes to 
improve how the SBA microloan program functions. Under the bill, we 
will reduce the interest rate that borrowers pay in the program. The 
bill will also help more lenders get involved in the program, giving 
businesses more options and making it easier to access the program. And 
this legislation will allow existing lenders to increase the amount of 
money they lend. These changes will expand the program's capacity and 
mean additional capital flows to small businesses.
  Finally, the bill allows lenders to spend more on providing technical 
assistance for small firms. The valuable services that microlenders 
provide, like teaching entrepreneurs how to write a business plan, 
often means the different between a new venture succeeding or failing.
  The American spirit of entrepreneurship is critical during times of 
economic downturn. By improving the SBA's microloan program and getting 
more capital in the hands of small business owners, this bill will 
accelerate our Nation's recovery. I urge the bill's passage. I reserve 
the balance of my time.
  Mr. GRAVES. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in support of H.R. 3737, which is the Small 
Business Microlending Expansion Act of 2009, and with that, I will go 
ahead and yield such time as he may consume to the gentleman from 
Indiana (Mr. Pence), who is the Chairman of the Republican Caucus.
  (Mr. PENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. PENCE. Mr. Speaker, first, I thank the gentleman for yielding.
  Let me thank the chairman of the committee and the ranking member for 
working in a bipartisan way on what is very worthy legislation that I 
support. Small business America is the engine of the American economy, 
and I appreciate in these tumultuous times the development of this 
program in this legislation.
  But I rise today with a heavy heart, Mr. Speaker, a heavy heart, 
because this morning we crossed a milestone. Unemployment was announced 
this morning at 10.2 percent, the worst rate of unemployment in the 
United States of America since 1983. Now, that is just a number, but I 
can't help but feel and see in my mind the faces and the families and 
the businesses that that represents.
  Working families, small businesses, and family farmers in this 
country are hurting; and at 10.2 percent unemployment, it is time for 
this Congress to rethink the approach that we have taken to legislation 
and to this economy.

[[Page H12468]]

  First, on the economy. Clearly, the so-called stimulus bill that was 
passed in February of this year has failed. The American people know 
that we can't borrow and spend and bail our way back to a growing 
economy. But, sadly, that was the approach that this administration and 
this majority took. Borrowing more than $700 billion from future 
generations of Americans, spreading it out in a wish list of liberal 
spending priorities, has seen unemployment go from 7.5 percent at the 
time the stimulus bill was passed to today's gut-wrenching 10.2 percent 
unemployment. So we have got to take a different approach to this 
economy.
  Back in Indiana, I can tell you a lot of things we focus on out here 
are not really what I hear about walking up and down the streets of 
Muncie and Anderson and New Castle, Indiana. I hear people talking 
about jobs. People are asking, when is Congress going to get the 
message that the time has come for us to enact fast-acting tax relief 
for working families, small businesses, and family farms, tax relief 
that would take effect right now, hit the bottom line of households and 
businesses all across this country right now?
  Republicans offered an alternative to the so-called stimulus bill 
earlier this year that, using the economic models of the White House at 
the time, would have cost half as much and created twice as many jobs; 
and there is still time to get it right.
  The lessons of history are clear: John F. Kennedy knew it, Ronald 
Reagan knew it, and after the Towers fell, George W. Bush knew it. The 
way to jump-start the American economy is to give the American people 
more of their hard-earned tax dollars to spend on their families and on 
their enterprises, and that we should do. That is first.
  Secondly, let me say I think the time has come, Mr. Speaker, for this 
Congress to make the priorities of the American people its priorities 
and set aside this massive government takeover of health care that is 
being driven to the floor of the Congress tomorrow, with $700 billion 
in higher taxes, with $1.3 trillion in new spending. 111 new government 
programs and bureaucracies are created; 43 entitlements are created or 
expanded.
  At 10.2 percent unemployment, now is not the time to launch a massive 
new government-run insurance plan and pay for it on the backs of 
working families, small businesses, and family farms.
  An analysis of the tax increase, there is $729.5 billion in new taxes 
on small businesses and individuals who can't afford health coverage in 
the Democrat health care bill. I saw one piece of analysis that 
suggested that, despite the President's promise in last year's election 
that he would allow no tax increases on any Americans that make less 
than $200,000 per year, 87 percent of the new taxes in the Democrat 
health care bill will be paid by Americans who make less than $200,000 
per year. A 1,990-page bill creating a massive new government-run 
insurance plan at a time when working families and small businesses are 
struggling and shedding jobs and making sacrifices at home and at work 
just to keep the lights on and the doors open is unthinkable.
  So, Mr. Speaker, I plead with this party: Belay your plans to launch 
a government takeover of health care. Put the interests of American 
families in this hurting economy first. Let's not add the insult of a 
massive new government program to the injury of 10.2 percent 
unemployment.
  And one last point. I note, Mr. Speaker, an admired colleague of mine 
just moments ago said on the floor of this House that it was a shame 
that Members of the minority were using unrelated legislation to talk 
about health care reform, and I don't begrudge that esteemed Member his 
opinion.
  But let me say, with press reports that suggest that we won't spend 
any more than half a day on the floor of this House debating what could 
amount to a government takeover of one-sixth of the American economy, 
it is a shame. There are great ideas on the Democrat side of the aisle. 
I want to say without hesitation, there are better ideas on the 
Republican side of the aisle.
  But why don't we let the People's House work its will? Why don't we 
start the debate immediately? Let's bring the hundreds of amendments 
that Republicans and Democrats have offered, as we do with 
appropriations bills, let's bring them to the floor. Let's have wide-
open, free-wheeling debate, and let's call the votes one after another. 
I have nowhere to be, except home standing with my veterans next 
Wednesday, from now until Thanksgiving. So let's get started. Let's go 
around the clock.
  The people that should be feeling shame, Mr. Speaker, are those that 
would pile drive through this Congress a massive expansion of the 
Federal Government, an enormous increase in taxes, at a heart-breaking 
time when unemployment reaches historic levels in this generation. It 
is time for Washington, DC, to listen to the heart of the American 
people and make their priorities our priorities.


                             General Leave

  Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on H.R. 3737, as amended.
  The SPEAKER pro tempore (Mr. Serrano). Is there objection to the 
request of the gentleman from New York?
  There was no objection.
  Ms. VELAZQUEZ. I yield myself such time as I may consume.
  I just would like to comment to the previous speaker that it seems 
like the American public didn't buy the argument that the other side 
has a better idea, and that is why they are in the minority today.
  I would like to take this opportunity to commend the sponsor of this 
bill, Mr. Ellsworth from Indiana.
  I would like to inquire from the ranking member if he has further 
speakers at this time?
  Mr. GRAVES. Just myself, Mr. Speaker.
  Ms. VELAZQUEZ. I reserve my time.
  Mr. GRAVES. Mr. Speaker, just before I get started, in talking about 
the last bill that was up, I want the chairman of the committee to know 
that I am going to reserve my judgment on how I am going to vote on 
that bill, since we have a recorded vote, until I consult with her, 
given her statement that she is a Mets fan. So I just wanted to make 
sure she knew that. So I will wait to see how she votes before I make a 
decision on how I am going to vote on that.
  Mr. Speaker, I mentioned earlier I do rise today in support of H.R. 
3737, which is the Small Business Microlending Expansion Act of 2009. 
The committee has worked on a very bipartisan basis to bring this 
technical but very important piece of legislation to the floor.
  H.R. 3737 represents the first substantive change to the microloan 
program in nearly a decade. In the United States, microlending is used 
as potential engines of economic activity for those individuals that do 
not have access to commercial financial institutions and the technical 
knowledge needed to start a small business.
  The Small Business Administration created a pilot program and 
Congress created a permanent authority for the program in 1992. SBA 
does not provide micro-credit directly to entrepreneurs. Instead, the 
SBA provides below-market rate loans to nonprofit intermediaries. These 
institutions then make loans to entrepreneurs.
  As with other SBA financing programs, the SBA does not provide all 
the funds for financing. Intermediaries must contribute 15 percent of 
the value of loans in non-Federal funds.
  But the key to the success of microlending is not the loans, but, 
rather, it is the education and counseling that the intermediaries 
provide to their borrowers. With this knowledge, these entrepreneurs 
are able to manage their financial resources and ensure repayment of 
the loans. The success is demonstrated by the very low number of 
defaults by borrowers and cost-effective means by which it produces 
jobs in areas that need economic revitalization.
  Despite its success, the microloan program needs to be revised in 
light of changes to the economy during the past 6 years and in some 
cases to update matters that have not been altered since the program's 
inception more than 15 years ago.
  Microlenders exist mainly because normal commercial lending 
institutions do not provide access to credit for

[[Page H12469]]

those who are highly credit risky. One way to improve that is to have 
borrowers' histories passed along to credit bureaus, and I think having 
the SBA work with the intermediaries to accomplish the delivery of 
credit histories will benefit borrowers.

                              {time}  1015

  H.R. 3737 also enables the intermediaries to determine the length of 
the credit that will be made available to the borrowers. Given the 
expertise of the intermediaries, it makes abundant sense for the 
determinations on the length of loans to rest with the intermediaries 
and the borrowers. I want to emphasize that this change has no impact 
on the loan obligations of intermediaries to the SBA. So the change 
involves no risk to the Federal Treasury.
  H.R. 3737 also raises the level of the average loan size in the 
intermediary's portfolio from $7,500 to $10,000. This level has not 
been changed since 1992, and the adjustment is appropriate to take 
account of inflation in the intervening 15 years. One key element in 
the microloan program is the preloan training provided by 
intermediaries to ensure that only those individuals with the right 
aptitude start small businesses. H.R. 3737 expands the capacity of 
intermediaries to provide such training.
  Again, I would like to thank the chairwoman and the gentleman from 
Indiana for bringing forward these important changes to the microloan 
program.
  Mr. Speaker, I don't think we have anymore speakers, so I will yield 
back the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from New York (Ms. Velazquez) that the House suspend the 
rules and pass the bill, H.R. 3737, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. VELAZQUEZ. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

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