[Congressional Record Volume 169, Number 16 (Wednesday, January 25, 2023)]
[House]
[Pages H303-H304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         MICROLOAN TRANSPARENCY AND ACCOUNTABILITY ACT OF 2023

  Mr. WILLIAMS of Texas. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 449) to amend the Small Business Act to increase 
transparency, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 449

       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 ``Microloan Transparency and 
     Accountability Act of 2023''.

     SEC. 2. PORTFOLIO RISK ANALYSIS OF MICROLOANS.

       Section 7(m)(10) of the Small Business Act (15 U.S.C. 
     636(m)(10)) is amended--
       (1) by redesignating subparagraphs (A) through (F) as 
     clauses (i) through (vi), respectively, and adjusting the 
     margins accordingly;
       (2) by amending clause (iv), as so redesignated, to read as 
     follows:
       ``(vi) the number, amount, and percentage of microloans 
     made by intermediaries to small business concerns--

       ``(I) that went into default in the previous year; and
       ``(II) that were charged off in the previous year by such 
     intermediaries;'';

       (3) in clause (vi), as so redesignated, by striking ``and'' 
     at the end;
       (4) by redesignating subparagraph (G) as clause (xviii), 
     and adjusting the margin accordingly;
       (5) by striking ``On November 1, 1995,'' and all that 
     follows through ``the following:'' and inserting the 
     following:
       ``(A) In general.--Beginning on February 1, 2023, and 
     annually thereafter, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives, and make available to the public on the 
     website of the Administration, a report on the effectiveness 
     of the microloan program during the fiscal year preceding the 
     date of the report. Such report shall include--'';
       (6) in subparagraph (A), as so designated, by inserting 
     after clause (vi) the following new clauses:
       ``(vii) the number and type of enforcement actions taken by 
     the Administrator against noncompliant intermediaries;
       ``(viii) an analysis of compliance by intermediaries with 
     the credit availability requirements of paragraph (3)(E) for 
     loans in an amount greater than $20,000;
       ``(ix) the extent to which microloans are provided to small 
     business concerns in rural areas;
       ``(x) the number of underserved borrowers, as defined by 
     the Administration, participating in the microloan program;
       ``(xi) the average rate of interest for each microloan;
       ``(xii) the average amount of fees charged for each 
     microloan;
       ``(xiii) the average size of each microloan, including--

       ``(I) the number of loans made in an amount greater than 
     $20,000; and
       ``(II) the average size and charge-off rate of such loans;

       ``(xiv) the subsidy cost to the Administration;
       ``(xv) the number and percentage of microloans that were 
     made to refinance other loans;
       ``(xvi) the number and percentage of microloans made to new 
     program participants and the number and percentage of 
     microloans made to previous program participants;
       ``(xvii) the average amount of technical assistance grant 
     monies spent on each loan; and''; and
       (7) by adding at the end the following:
       ``(B) Privacy.--Each report submitted under subparagraph 
     (A) shall not contain any personally identifiable information 
     of any borrower.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Williams) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. WILLIAMS of Texas. 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 this measure.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. WILLIAMS of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 449, the Microloan 
Transparency and Accountability Act.
  When an entrepreneur wants to start a business, finding starting 
capital can be one of the hardest challenges there is. SBA's microloan 
program looks to solve this issue and provide capital to people who 
need help getting their businesses off the ground.
  While this program is well intended, Congress currently doesn't have 
access to some key metrics that we need to evaluate the effectiveness 
of this program. For example, it would be very helpful to have a 
comprehensive review of where the loans are being distributed to see if 
it is being utilized in many rural areas of the country. Additionally, 
we are currently left in the dark about the overall risk profile of the 
entirety of the program.
  This bill would solve these problems by directing the SBA to do a 
comprehensive analysis to evaluate the effectiveness of this program.
  The Microloan Transparency and Accountability Act will provide 
Congress with much-needed insight to make determinations on how to 
better optimize this program to assist small businesses.
  I thank my colleague from Tennessee, who has advanced this bill for 
the last few Congresses, for his dedication to improving this program.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of the bill before us today, H.R. 449, 
the Microloan Transparency and Accountability Act, which will improve 
SBA's data reporting with respect to the microloan program.
  Congress created the microloan program in 1991 to make funds 
available to nonprofit, community-based lenders who, in turn, make 
small-dollar loans to eligible borrowers. Many of these borrowers are 
unable to get a traditional loan due to poor credit, no credit history, 
or a lack of business experience.
  This program reaches various demographic groups that will otherwise 
not be served by the private sector or even the SBA's 7(a) program, 
especially businesses located in underserved communities.
  In fact, in fiscal year 2021, the program delivered more than 4,500 
loans to small businesses in these communities, totaling almost $75 
million. This fiscal year, the SBA estimates it will assist over 5,700 
small businesses, supporting approximately 24,000 jobs.
  The bill we are considering today will help Congress and the public 
better evaluate the program and its impact on underserved communities.
  Despite the program's record of success, many participating 
intermediaries report being restricted in their lending activity as a 
result of numerous rules governing the program being outdated. The 
information received from these reports will assist Congress and the 
agency in developing policies to continue the strong performance of the 
program.
  I applaud the bipartisanship shown by Mr. Burchett and Mr. Kim, the 
sponsors of this bill.
  Mr. Speaker, I urge all of my colleagues to vote ``yes,'' and I 
reserve the balance of my time.
  Mr. WILLIAMS of Texas. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Tennessee (Mr. Burchett), a great patriot 
who loves our country.

[[Page H304]]

  

  Mr. BURCHETT. Mr. Speaker, Mr. Chairman, Ranking Member Velazquez--I 
believe I got that right; I have been working on it for about 5 years--
it is a pleasure being here with you all.
  Mr. Chairman, I appreciate the great work you do. There is nobody, I 
think, better at the helm of the Small Business Committee than somebody 
who has actually taken a business and made it into something. That is 
very American and very cool, and I thank you for your friendship to me 
and my family.
  Mr. Speaker, I rise today in support of H.R. 449, the Microloan 
Transparency and Accountability Act of 2023.
  The Small Business Administration's microloan program helps America's 
entrepreneurs access capital to help their small businesses grow.

                              {time}  1330

  These loans are usually around $13,000; $13,000, the difference 
between them making it or not. That kind of money would go a long way 
for a lot of our mom-and-pop stores in the rural areas of East 
Tennessee that I am proud to represent, and in our inner cities, as 
well.
  Unfortunately, the microloan program has a low participation rate, 
Mr. Speaker, among our rural businesses. My bill would increase 
transparency by requiring the Small Business Administration to report 
data about the program to Congress. This will help us better understand 
how the program is operating and what we can do to improve it.
  Government programs that support small businesses shouldn't be full 
of waste, and they shouldn't neglect businesses simply because of their 
ZIP Code.
  My bill will increase transparency and establish accountability at 
the Small Business Administration to ensure it is working on behalf the 
small businesses everywhere.
  I thank my colleagues, especially my sponsor across the aisle who has 
been my friend for a few years here, for their support on this 
bipartisan, commonsense bill which passed the House in the 116th and 
117th Congresses, and I look forward to seeing the Microloan 
Transparency and Accountability Act pass the House again today.
  I also look forward to the Senate doing their work and taking this 
up, Mr. Speaker.
  Ms. VELAZQUEZ. Mr. Speaker, I yield 2 minutes to the gentleman from 
New Jersey (Mr. Kim).
  Mr. KIM of New Jersey. Mr. Speaker, during the last Congress, Mr. 
Burchett and I introduced this important bill as part of a two-bill 
microloan major impact package.
  Together, these bills would increase the number of microloan lenders 
in our communities, increase access to capital, and ensure greater 
transparency around how taxpayer dollars are being spent by the SBA.
  I look forward to continuing to work with the chairman and the 
ranking member, as well as Congressman Burchett to again advance these 
pieces of legislation.
  Today, I rise in support of the Microloan Transparency and 
Accountability Act, and I look forward to working with them to advance 
the Microloan Improvement Act in the 118th Congress, as well.
  I have heard from a diverse range of businessowners across New 
Jersey's Third District about how just small increases in access to 
capital could make an enormous impact for them.
  These businessowners aren't asking for the moon. Many of them are in 
communities that are underserved and may not have a credit history, 
extensive past business experience, or the luxury of coming from 
wealth, but they have a dream. They are entrepreneurial, and with a 
small investment, a microloan to get started in some cases, they can 
launch their business, chase their dreams, create jobs, and transform 
communities.
  By passing this bill, we can help enhance microloans in rural areas 
and provide greater transparency to ensure we are using taxpayer 
dollars efficiently and effectively.
  This bill will help make sure the SBA's microloan program is reaching 
those most in need, best serving America's small businessowners, and 
giving them a fair shot at success.
  I thank Congressman Burchett for leading this effort and for the 
support of the Small Business Committee. I urge all of my colleagues to 
support small businesses across this country and vote ``yes'' on this 
bill.
  Mr. WILLIAMS of Texas. Mr. Speaker, I have no further speakers, and I 
am prepared to close.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  This bill will greatly increase the publicly available information 
about the microloan program's performance and impact.
  If we intend to continue to support the smallest of small businesses, 
especially women- and minority-owned businesses, we need to make sure 
the programs targeting them are operating at their best. That starts 
with improving the data and information available about where the loans 
are going, how affordable they are, and where the gaps in coverage are.
  With more data, Congress will be able to monitor the program and 
identify areas for improvement.
  I thank the gentlemen from Tennessee and New Jersey for their hard 
work and collaboration in bringing this bill to the floor today. I urge 
my colleagues to vote ``yes,'' and I yield back the balance of my time.
  Mr. WILLIAMS of Texas. Mr. Speaker, the microloan program which 
delivers capital assistance to the Nation's smallest businesses is an 
important lending tool at the SBA.
  H.R. 449, the Microloan Transparency and Accountability Act, will 
deliver comprehensive data and information on the effectiveness of the 
program. I applaud all of the members for working on this important 
legislation in an effort to shine more light on how well the program is 
working.
  From my State of Texas to both of the Nation's coasts, accessing 
capital remains a top challenge facing all small businesses. We must 
ensure these programs and tools are operating at a high level and 
delivering on the goals that Congress set for them.
  Mr. Speaker, I urge my colleagues to support H.R. 449, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Williams) that the House suspend the rules 
and pass the bill, H.R. 449.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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