[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.
____________________