[Congressional Record Volume 172, Number 13 (Tuesday, January 20, 2026)]
[House]
[Pages H932-H934]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
504 PROGRAM RISK OVERSIGHT ACT
Mr. WILLIAMS of Texas. Madam Speaker, I move to suspend the rules and
pass the bill (H.R. 5788) to amend title V of the Small Business
Investment Act of 1958 to require an annual portfolio risk analysis of
loans guaranteed under such title, and for other purposes.
The Clerk read the title of the bill.
[[Page H933]]
The text of the bill is as follows:
H.R. 5788
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 ``504 Program Risk Oversight
Act''.
SEC. 2. PORTFOLIO RISK ANALYSIS OF LOANS GUARANTEED UNDER THE
504 PROGRAM.
Title V of the Small Business Investment Act of 1958 (15
U.S.C. 695 et seq.) is amended by adding at the end the
following:
``SEC. 511. PORTFOLIO RISK ANALYSIS.
``(a) In General.--The Administrator shall annually conduct
a risk analysis of the portfolio of the Administration with
respect to all loans guaranteed under this title.
``(b) Report to Congress.--Not later than December 1, 2025,
and annually thereafter, the Administrator shall submit to
Congress a report containing the results of each portfolio
risk analysis conducted under subsection (a) during the
fiscal year preceding the submission of the report, which
shall include--
``(1) an analysis of the overall program risk of loans
guaranteed under this title;
``(2) an analysis of the program risk, set forth separately
by industry concentration;
``(3) without identifying individual development companies
by name, a consolidated analysis of the risk created by
development companies making loans under this title that are
responsible for not less than 1 percent of gross loan
approvals under this title, set forth separately by--
``(A) the dollar value of the loans made by such
development companies;
``(B) the number of loans made by such development
companies; and
``(C) an analysis of the program risk for such loans with a
dollar value--
``(i) less than or equal to $500,000;
``(ii) greater than $500,000 and less than or equal to
$1,000,000;
``(iii) greater than $1,000,000 and less than or equal to
$2,000,000; and
``(iv) greater than $2,000,000 and less than or equal to
$5,500,000;
``(4) an analysis of the program risk for loan guarantees
made under this title for loans that were originated--
``(A) less than one year before the date of submission of
the report;
``(B) at least one year, but not more than two years before
such date; and
``(C) more than two years before such date;
``(5) an analysis of the program risk for loan guarantees
made under this title for loans that were originated--
``(A) to a borrower that uses such loan to open a business;
``(B) to a borrower not described in subparagraph (A) that
is a business concern that has been in operation for less
than or equal to two years before the date of origination;
and
``(C) to a borrower that is a business concern that has
been in operation for more than two years on the date of
origination;
``(6) an analysis of the program risk for loan guarantees
made under this title for loans that were originated for
limited or special purpose properties;
``(7) steps taken by the Administrator to mitigate the
risks identified in paragraphs (1), (2), (3), (4), (5), and
(6);
``(8) the number of development companies, the number of
loans made, and the gross dollar amount of the loans made
under this title;
``(9) the number and total dollar amount of purchases by
the Administrator of the principal and interest of loans
guaranteed under this title that are in default, the total
dollar amount of collections recovered on such purchases, and
the number and total dollar amount of charge-offs for such
purchases;
``(10) the number and type of enforcement actions with
respect to a loan made by a development company under this
title recommended by the Administrator; and
``(11) the number and dollar amount of any civil monetary
penalty assessed pursuant to an enforcement action described
in paragraph (10).
``(c) Availability of Report.--The Administrator shall make
available to the public on a website of the Administration
the report required under subsection (b) not later than 7
days after the Administrator submits such report to Congress.
``(d) Limited or Special Purpose Property Defined.--In this
section, the term `limited or special purpose property' has
the meaning given by the Administrator in the guidance titled
`Lender and Development Company Loan Programs' (SOP 50 10 8;
as in effect on June 1, 2025).''.
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. Madam 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.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. WILLIAMS of Texas. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, I rise today in strong support of H.R. 5788, the 504
Program Risk Oversight Act introduced by Representatives Tran and
Patronis.
This bipartisan piece of legislation would give Congress greater
accountability and oversight of the SBA's 504 Loan Program by requiring
the SBA to provide Congress and the public with annual, data-driven
risk assessments of the 504 loan portfolio.
The 504 program is an incredibly important tool that helps small
businesses obtain long-term, fixed-rate financing like the acquisition
of fixed assets such as land, buildings, and heavy machinery.
In fiscal year 2025, the program supported $7.8 billion in loans to
small businesses nationwide. Specifically, H.R. 5788 would require the
SBA to provide Congress with annual reports on the health of the 504
loan portfolio.
This would include an analysis of any risk to the program broken down
by multiple data points, including industry concentration, loan age,
and gross dollar amount.
{time} 1600
These reports would be made available to the public within 7 days of
being provided to Congress. The transparency measures in this bill are
particularly important in light of the House passage of my bill, H.R.
3174, the Made in America Manufacturing Finance Act, which raised the
loan limit for American manufacturers under the SBA's 7(a) and 504 loan
programs to $10 million. I hope it will quickly move through the Senate
and to President Trump's desk.
Madam Speaker, H.R. 5788 marks a critical step toward identifying and
mitigating risks early, strengthening the long-term viability and
affordability of the 504 loan program and ensuring continued support
for American entrepreneurs.
Madam Speaker, I urge my colleagues to vote ``yes'' on H.R. 5788, and
I reserve the balance of my time.
Ms. VELAZQUEZ. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I rise in support of the bill before us today, H.R.
5788, the 504 Program Risk Oversight Act.
Madam Speaker, transparency is key to ensuring the proper operation
and functioning of the SBA lending programs, including the 504/CDC
program. This bill will give the Committee on Small Business the
necessary information to carry out our oversight authority.
Federal law requires the SBA Office of Credit Risk Management to
conduct an annual portfolio risk analysis of the SBA flagship 7(a) loan
program and provide Congress with a detailed report of their results.
This report has been crucial in Committee on Small Business Democrats'
investigation into the rising default levels in the 7(a) program and
has helped us to respond accordingly.
Unfortunately, no statutory reporting requirement exists for the 504/
CDC loan program. H.R. 5788 will fix that by adding a requirement that
the SBA conduct an annual risk analysis of the 504/CDC program and
provide Congress with their results. Tailored to the 504/CDC program's
unique features, the report will provide Congress with many of the same
data points it currently provides on the 7(a) program, but the bill
also requires several new data points to improve our stewardship of the
program.
While loan defaults aren't currently a concern for the 504 program,
this bill will provide Congress with valuable information needed to
monitor the program's operation, guard against future risk, and ensure
that the program's zero-subsidy requirement is maintained.
Madam Speaker, I applaud Representatives Tran and Patronis for their
work on this bill, which is supported by the National Association of
Development Companies. I ask my colleagues to support it, and I reserve
the balance of my time.
Mr. WILLIAMS of Texas. Madam Speaker, I yield such time as he may
consume to the gentleman from Florida (Mr. Patronis).
[[Page H934]]
Mr. PATRONIS. Madam Speaker, I thank the lead of this bill, the
gentleman from California (Mr. Tran), for his work on this bill.
I appreciate the opportunity to serve as co-lead on this legislation.
The SBA's 504 program helps small businesses to grow, create jobs, and
invest in their communities. Since this program uses taxpayer-backed
loans, it is important that we properly review and manage risk.
Madam Speaker, H.R. 5788 makes a simple fix. It requires risk
assessments for the 504 loan program, just like we already do with
other major SBA loan programs. This helps to close the gap and improves
oversight.
Transparency matters. When we clearly understand how a program is
working, we can protect taxpayer dollars and make sure the program
stays strong.
This bill helps us to ensure that we are responsible with taxpayer
money while continuing to support small businesses.
Madam Speaker, I urge my colleagues to support H.R. 5788.
Ms. VELAZQUEZ. Madam Speaker, I yield 3 minutes to the gentleman from
California (Mr. Tran), the lead sponsor of the bill.
Mr. TRAN. Madam Speaker, I rise today in strong support of H.R. 5788,
the 504 Program Risk Oversight Act, bipartisan legislation that
strengthens one of SBA's most successful financing programs.
For decades, the SBA's 504 loan program has been a cornerstone of
economic development in communities across America. Through public and
private partnership with certified development companies, the 504
program helps small businesses to grow, create jobs, and invest in
their communities.
Since its inception in 1986, the program has provided approximately
$400 billion in total project financing and created over 3.3 million
jobs. In California alone, that translates to $95 billion in total
capital and the creation of over 715,000 good-paying jobs.
For entrepreneurs in California's 45th District and across the
Nation, the 504 loan program's unique model provides them with access
to long-term, fixed-rate financing to help them to expand operations,
purchase property, and make lasting investments in their local economy.
In Orange County and Los Angeles County alone, the 504 program has
injected more than $27 billion into local businesses and helped to
create over 175,000 jobs over the last 25 years.
My bipartisan bill, the 504 Program Risk Oversight Act, builds on
that success by ensuring that all partners--the SBA, Congress, and
industry--have access to clear, consistent, and transparent data about
the health of the program.
Currently, SBA is not required to conduct an annual risk analysis of
the 504 loan program and provide Congress with any performance data. My
bill addresses this problem and requires the SBA to conduct an annual
risk assessment of the 504 program and provide Congress with detailed
insights into overall health of the program and information needed to
strengthen program performance.
Madam Speaker, transparent data is the cornerstone of a productive
partnership between the SBA, Congress, and industry and the work that
we do collectively to keep the 504 program healthy for future
generations of entrepreneurs. Now more than ever, small businesses need
what the 504 loan program provides: certainty and affordable patient
capital.
Madam Speaker, I am proud to lead this bill, and I thank my
colleague, Representative Jimmy Patronis, for his partnership in co-
leading this important piece of legislation with me. Of course, this
bill would not be possible without the leadership of Ranking Member
Velazquez and Chair Williams.
Madam Speaker, I urge my colleagues to support this bill.
Mr. WILLIAMS of Texas. Madam Speaker, I have no further speakers, and
I am prepared to close. I reserve the balance of my time.
Ms. VELAZQUEZ. Madam Speaker, I again applaud Representatives Tran
and Patronis for their bipartisan work on this bill. I encourage all of
my colleagues to vote ``yes,'' and I yield back the balance of my time.
Mr. WILLIAMS of Texas. Madam Speaker, H.R. 5788 provides transparency
to the SBA's 504 loan program, a key program that promotes job creation
and small business growth.
Madam Speaker, I urge my colleagues to support this legislation, 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. 5788.
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.
____________________