[Congressional Record Volume 171, Number 96 (Thursday, June 5, 2025)]
[House]
[Pages H2489-H2491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CAPPING EXCESSIVE AWARDING OF SBLC ENTRANTS ACT OF 2025
Mr. WILLIAMS of Texas. Mr. Speaker, pursuant to House Resolution 458,
I call up the bill (H.R. 2987) to amend the Small Business Act to
require a limit on the number of small business lending companies, and
for other purposes, and ask for its immediate consideration in the
House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 458, the
amendment in the nature of a substitute recommended by the Committee on
Small Business, printed in the bill, is adopted and the bill, as
amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 2987
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 ``Capping Excessive Awarding
of SBLC Entrants Act of 2025'' or the ``CEASE Act of 2025''.
SEC. 2. LIMITATION ON NUMBER OF SMALL BUSINESS LENDING
COMPANIES.
Section 23 of the Small Business Act (15 U.S.C. 650) is
amended by adding at the end the following:
``(k) Limitation on Number of Small Business Lending
Companies.--The Administrator shall ensure that not more than
16 small business lending companies that are not nonprofit
entities are authorized to make loans under section 7 at any
time.''.
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour equally divided and controlled by the chair and ranking minority
member of the Committee on Small Business or their respective
designees.
The gentleman from Texas (Mr. Williams) and the gentlewoman from New
York (Ms. Velazquez) each will control 30 minutes.
The Chair recognizes the gentleman from Texas (Mr. Williams).
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 the bill under
consideration.
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 today in support of H.R. 2987, the CEASE Act,
introduced by Representative Bresnahan.
This bill is simply a reversal of an irresponsible change made by the
Biden administration's SBA, which raised concerns on both sides of the
aisle.
Unlike a traditional community bank, small business lending
companies, or SBLCs, are regulated by the SBA. Historically, the SBA
recognized that they had finite resources to conduct oversight of the
SBLCs, reinforcing a need for a cap on the number of SBLCs.
Despite this, in 2023, the Biden administration lifted the 40-year
moratorium on licensing the SBLCs to participate in its flagship 7(a)
program, a government-backed lending program.
The SBA heard concerns from Members from both Chambers and both sides
of the aisle. Even the ranking member, Ms. Velazquez, said earlier this
week during the Rules Committee hearing that she was one of the first
to raise questions when the SBA lifted the licensing moratorium.
Biden's SBA hid behind promises of lender oversight and stronger
borrower protection yet still awarded a license to an unqualified
entity. This entity, which was seeking to sell its business when it was
awarded a license, ultimately surrendered its license before it could
even make a 7(a) loan.
This legislation puts the guardrails back and restores integrity to
the 7(a) program, ensuring taxpayer dollars are safe. I am confident
that the 16 SBLCs can and will be overseen effectively under
Administrator Loeffler's leadership.
Mr. Speaker, I urge all of my colleagues to support this bill, and I
reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise today in strong opposition to H.R. 2987, the so-
called Capping Excessive Awarding of SBLC Entrants Act, or the CEASE
Act.
This bill would impose a permanent statutory cap on the number of
small business lending company, or SBLC, licenses the SBA can issue,
limiting them to just 16.
While I understand and share some of the concerns raised about how
the SBA has handled oversight of these licenses, I cannot support
legislation that is rushed, vague, and potentially harmful to the very
businesses we are supposed to be helping. Let's take a step back.
For more than 40 years, the SBA maintained a moratorium on new SBLC
licenses, citing a lack of resources to properly supervise new
entrants. That changed in 2023 when the agency finalized a new rule
lifting the moratorium and began issuing additional licenses to expand
participation in the 7(a) loan program. The goal was to help fill
lending gaps, particularly in underserved communities that have
historically struggled to access capital. That is a goal that I
support.
I also believe it should be done carefully with the right oversight
in place. I raised questions about the SBA's rollout of this policy
when it first proposed the rule. I flagged concerns about whether the
agency had the capacity to supervise these lenders effectively, and I
called for transparency and clarity every step of the way.
I am not here to defend the SBA's process blindly, but H.R. 2987
doesn't actually fix the oversight issues. It just slaps an arbitrary
cap on the program without addressing the real questions of how to
improve accountability, how to expand access responsibly, and how to
ensure these programs are helping the businesses that need it the most.
What is worse, the bill is completely silent on how this cap would
apply to the Community Advantage program, a critical SBA initiative
that helps make smaller-dollar loans available to startups, veterans,
rural entrepreneurs, and other underserved borrowers.
Since being transitioned into the SBLC framework, Community Advantage
lenders have continued to show strong results. Last year alone, the
program issued over 1,100 loans worth nearly $200 million, with an
average loan size of just $175,000.
These are the kinds of loans that traditional banks often will not
make because they are not profitable, but they are exactly what many
small businesses need to get off the ground. By leaving out an
exception for mission-based CA lenders from the cap, this bill opens
the door for a future administration to freeze new licenses or even
eliminate the CA SBLCs altogether. That is a concern we have heard
directly from lenders, community organizations, and small business
advocates around the country.
These are the very lenders we relied on to help target PPP assistance
to the smallest of small businesses during the global pandemic. They
met the moment for many small employers in our communities that were
locked out of the first rounds of PPP assistance.
At a time when small businesses are facing rising costs, tariff
uncertainty, and tightening credit, Congress should be doing everything
it can to expand access to capital, not pulling back on programs that
are actually working. That is why I cannot support this bill in its
current form.
Mr. Speaker, 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 Pennsylvania (Mr. Bresnahan).
Mr. BRESNAHAN. Mr. Speaker, my bill, the Capping Excessive Awarding
of SBLC Entrants Act, or the CEASE Act, restores a vital piece of
integrity to the flagship SBA 7(a) loan program.
The Small Business Administration is authorized to issue government-
backed 7(a) loans through certified depository institutions, like banks
and credit unions, as well as certified nonbank lenders, like fintech
companies.
Unlike certified depository institutions, whose primary regulator is
the
[[Page H2490]]
Federal Reserve, the nonbank SBLCs are primarily regulated by the SBA,
meaning they are not subject to the same regulations and requirements.
{time} 1300
Together, the limited number of SBLCs and prudent lending standards
that used to be in place at the SBA were necessary guardrails to ensure
that the 7(a) program remained zero-subsidy, costing taxpayers zero
dollars.
The SBA had its own concerns that it did not have the oversight
capabilities to monitor and regulate an unlimited number of SBLCs. Yet
the Biden-Harris administration sought to expand the number of SBLC
licenses, while also lowering lending standards and loosening
underwriting criteria in the 7(a) program. The previous administration
did this, even though these SBLCs facilitated massive fraud of the
Paycheck Protection Program.
Expanding SBLCs' licenses when the SBA itself acknowledged that it is
unequipped to regulate additional for-profit, nonbank lenders is
problematic. That is why my legislation is so important to ensure the
SBA is not adding excessive SBLCs that it cannot properly regulate. We
cannot continue giving the Federal Government ways to abuse taxpayer
dollars.
I thank the Trump administration for taking swift action in returning
prudent lending standards to the 7(a) program. Combined with the CEASE
Act, those efforts will return the SBA to its proper oversight
capabilities and ensure that federally regulated lenders, such as
community banks, remain a fundamental pillar of 7(a) lending.
The bill was thoughtfully drafted to encompass the original 14 SBLCs
and 2 additional SBLCs licensed in 2024 after the Biden-era rule
changed. No existing SBLC licenses would be revoked as part of this
bill.
Mr. Speaker, I thank the great members and staff of the Small
Business Committee for working with me in bringing this bill to the
House floor today.
Mr. Speaker, I ask my colleagues on both sides of the aisle to vote
``yes'' on this practical and sensible piece of legislation.
Ms. VELAZQUEZ. Mr. Speaker, I yield 5 minutes to the gentlewoman from
Minnesota (Ms. Morrison).
Ms. MORRISON. Mr. Speaker, I rise today to discuss H.R. 2987, the
CEASE Act, which would place a statutory moratorium on the number of
Small Business Lending Company licenses that can be issued by the U.S.
Small Business Administration.
What does this bill do? It will cap the number of SBA 7(a) nonbank
lenders who can give loans to America's small businesses, a reasonable
endeavor that could have generated bipartisan support had there been
any effort by the majority to engage in a thoughtful discussion with
us.
Since there was no such engagement, this bill does nothing to protect
the hugely successful Community Advantage program. Community Advantage
Small Business Lending Companies provide loans to small businesses
located in underserved and rural communities, to new businesses, and to
veteran-owned small businesses.
For far too long, far too many people in our country have not been
able to access capital and participate in the American Dream of
starting a business, creating jobs, and growing our economy. The Small
Business Administration plays a critical role in providing capital to
our small businesses. The Community Advantage program has a
demonstrated track record of helping entrepreneurs who face higher
barriers to accessing capital grow and scale their businesses.
This is exactly what we should be doing: opening more doors for more
Americans to start a business, create jobs in their community, and
strengthen their local economy.
My question to my Republican colleagues is: Without providing
protections for Community Advantage Small Business Lending Companies in
the text of this bill, are you suggesting we eliminate this crucial
program? Why would you threaten to remove a way for veteran-owned small
businesses to access capital? What is your message to American
entrepreneurs looking to access that first loan that could help turn
their best ideas into a new small business?
Mr. Speaker, let's just take a step back here. Right now, small
businesses across the country are ringing the alarm bells saying that
the tariff wars are going to put them out of business in a matter of
weeks or months.
Just this past week, we heard from Minnesota's Small Business Person
of the Year, given the award by the Trump administration, who said she
has 6 weeks until she goes out of business.
These are successful small businesses, small businesses that were
thriving, growing, expanding until President Trump started this
completely unnecessary, completely chaotic trade war by setting
exorbitant tariffs as high as 145 percent, changing policies
haphazardly, at times literally by the hour. No one can run a business
with that level of uncertainty, and our small businesses are getting
hit the hardest.
They can't plan for the future. They don't have the luxury of time.
The threat is here right now. They certainly don't have the resources
to personally lobby the President like the massive tech companies who
got exemptions did. President Trump's so-called tariff policy is
literally killing our small businesses.
Mr. Speaker, Congress has the power to stop it. Article I of the
Constitution says Congress has the power to levy tariffs, but what is
the Republican majority doing?
They are ceding all their power to this President and completely
disregarding their constitutional duty and the outcries from small
business owners who are warning us they will have to close their doors
in a matter of weeks if this tariff war doesn't end.
Mr. Speaker, the three bills the Republicans are choosing to bring to
the floor this week have nothing to do with the existential threat that
these tariffs are posing to our Nation's small businesses. The lack of
courage to stand up for our Nation's small businesses, and to stand by
and watch their downfall, is shameful. We should be passing legislation
to end this tariff war and save our small businesses.
Ms. VELAZQUEZ. Mr. Speaker, I yield 5 minutes to the gentlewoman from
California (Ms. Chu).
Ms. CHU. Mr. Speaker, I rise in strong opposition to H.R. 2987, the
CEASE Act, because it has the potential to harm our Nation's most
underserved small businesses.
This bill would cap the number of Small Business Lending Company, or
SBLC, licenses that the SBA can issue at its current level of 16
licenses. These licenses enable lenders to make loans of up to $5
million to small businesses that we know often struggle to secure
financing from traditional banks.
If Republicans wanted to find a solution to bipartisan concerns about
SBA's capacity to oversee an increased number of licenses, Democrats
would have been happy to work together on this. Unfortunately, this
bill fails to address our serious concerns about how it could devastate
opportunities for capital access for the small businesses that need
SBA's help the most.
Specifically, this bill is completely silent about how this cap on
licenses would impact Community Advantage SBLCs. We know that one of
small businesses' greatest challenges is obtaining access to financial
capital. For over a decade now, the Community Advantage program has
been helping close this funding gap for underserved businesses who face
this challenge disproportionately like rural, veteran, and low-income
small business owners.
I will never forget visiting one of these businesses in Santa Monica,
California. It was a salad-based restaurant owned by two young Hispanic
men who had this dream of expanding their restaurant, but they were
turned away by every traditional bank due to a lack of assets and
credit history. Finally, they were able to get a $250,000 Community
Advantage loan, and now they have six of these restaurants.
It was a relatively modest sum, but $250,000 was what it took to make
these small business owners successful, and that is why I have long
believed in the Community Advantage program. However, it was operating
only as a pilot program, and that is why I sponsored a bill to make it
permanent. This bipartisan bill has passed out of the House, but the
Senate did not take it up.
Great relief, however, came in 2023 when the SBA established by rule
the Community Advantage SBLC program
[[Page H2491]]
to provide long-term assurance for the program and lenders. Since then,
there has been great progress: 143 lenders have registered as Community
Advantage SBLCs. In 2024 alone, these lenders have already issued 1,100
loans totaling $196 million to the most underserved small businesses
with an average loan size of $160,000.
Congress needs to build on these efforts by providing statutory
permanency for Community Advantage, but the bill before us today goes
in the opposite direction, potentially threatening the future of
Community Advantage SBLCs because it makes no mention of how these
licenses would be impacted by the statutory cap.
Congress must ensure that our most underserved small businesses have
the resources they need to not just survive but to grow. That is why I
will reintroduce the Community Advantage Loan Program Act, which will
give permanent authorization to this program.
Mr. Speaker, I urge my colleagues to support our Nation's veteran,
rural, and low-income entrepreneurs by voting ``no'' on this bill.
Mr. WILLIAMS of Texas. Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I am not opposed to oversight. I am not opposed to
having a real conversation about the future of SBA programs. I am
opposed to legislation that leaves key questions unanswered and puts
proven programs in jeopardy.
The Community Advantage program and the CA SBLCs have been a lifeline
for thousands of small businesses, particularly in rural areas and for
unbanked businesses.
They fill the gap that traditional lenders and larger 7(a) lenders
won't. Small and new businesses often require small-dollar loans, not
million-dollar loans. They simply need enough capital to get their
business off the ground or finance modest expansions. That is why the
CA SBLC lenders are so critical to growing our small business
ecosystem.
The CA lenders have had bipartisan support for years, so why are my
colleagues so afraid to include a provision of congressional intent to
protect them from the cap? I just don't get it.
The Small Business Committee has always worked in a bipartisan
manner, and here we are with a proven program that has had bipartisan
support, and the Republicans with this legislation will put an end to
CA SBLC.
We should be working together to support and expand the CA SBLC
program, not passing vague bills that threaten to cut it off.
At a time when small businesses need more capital, more support, and
more stability, this bill moves us in the wrong direction.
In sum, I oppose H.R. 2987 because it will not protect the Community
Advantage program, which has a solid track record of providing smaller
dollar loans to thousands of women, veterans, rural, and underserved
entrepreneurs.
At the appropriate time, I will offer a motion to recommit this bill
back to the committee. If the House rules permitted, I would have
offered the motion with an important amendment to this bill. My
amendment will ensure the requirements of the bill shall not apply to
Community Advantage SBLCs, and it prohibits implementation of the bill
until the Administrator certifies to Congress that 7(a) loan
originations will not decrease to unbanked small business borrowers
operating in rural- or low-income markets.
Mr. Speaker, I ask unanimous consent to insert the text of my
amendment into the Record immediately prior to the vote on the motion
to recommit.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Ms. VELAZQUEZ. Mr. Speaker, I hope my colleagues will join me in
voting for the motion to recommit and vote ``no'' on H.R. 2987.
Mr. Speaker, I yield back the balance of my time.
Mr. WILLIAMS of Texas. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 458, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Ms. VELAZQUEZ. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Ms. Velazquez of New York moves to recommit the bill H.R.
2987 to the Committee on Small Business.
The material previously referred to by Ms. Velazquez is as follows:
Ms. Velazquez of New York moves to recommit the bill H.R.
2987 to the Committee on Small Business with instructions to
report the same back to the House forthwith, with the
following amendment:
Add at the end the following new sections:
SEC. 3. APPLICABILITY TO COMMUNITY ADVANTAGE SMALL BUSINESS
LENDING COMPANIES.
The requirements of section 2 shall not apply to a small
business lending company (as defined in section 3(r) of the
Small Business Act (15 U.S.C. 632(r))) that is operating as a
Community Advantage Small Business Lending Company.
SEC. 4. EFFECTIVE DATE; CERTIFICATION.
(a) In General.--The requirements of section 2 shall take
effect on the date on which the Administrator of the Small
Business Administration certifies to Congress that the number
of loans made under section 7(a) of the Small Business Act
(15 U.S.C. 636(a)) to unbanked small business borrowers
operating in underserved markets will not decrease.
(b) Definitions.--In this section:
(1) Rural.--The term ``rural'' means any county that the
Bureau of the Census has defined as mostly rural or
completely rural in the most recent decennial census.
(2) Underserved market.--The term ``underserved market''
means--
(A) a low- to moderate-income community;
(B) a HUBZone, as that term is defined in section 31(b) of
the Small Business Act (15 U.S.C. 657a);
(C) a rural area;
(D) a community that has been designated as an empowerment
zone or enterprise community under section 1391 of the
Internal Revenue Code of 1986;
(E) a community that has been designated as a qualified
opportunity zone under section 1400Z-1 of the Internal
Revenue Code of 1986;
(F) a community that has been designated as a promise zone
by the Secretary of Housing and Urban Development; or
(G) an area for which more than 50 percent of the employees
reside in a low- or moderate-income community.
The SPEAKER pro tempore. Pursuant to clause 2(b) of rule XIX, the
previous question is ordered on the motion to recommit.
The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Ms. VELAZQUEZ. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________