[Congressional Record Volume 172, Number 105 (Tuesday, June 23, 2026)]
[House]
[Pages H4140-H4141]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS LENDING FRAUD PREVENTION ACT
Mr. WILLIAMS of Texas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 7401) to require employees of the Small Business
Administration to certify that the employee does not have any
prohibited conflicts of interest with respect to loans in which the
employee is involved, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7401
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 Lending Fraud
Prevention Act''.
SEC. 2. SMALL BUSINESS ADMINISTRATION EMPLOYEE CONFLICT OF
INTEREST CERTIFICATION.
(a) In General.--Beginning on the date that is 270 days
after the date of the enactment of this Act, an employee of
the Administration that will personally and substantially
participate in the origination, review, or approval of a loan
administered by the Administration shall, prior to such
participation in such loan, certify to the Administrator in
writing that such employee--
(1) to their knowledge, does not have any conflict of
interest prohibited under section 208 of title 18, United
States Code, or section 2635.502 of title 5, Code of Federal
Regulations, with respect to such participation in such loan;
(2) upon learning of any such conflict of interest after
submitting such certification, will immediately disclose such
conflict of interest to the supervisor of such employee and
recuse themselves from participating in such loan; and
(3) understands the requirements applicable to such
employee under Federal law and regulations of the
Administration regarding conflicts of interest with respect
to such participation in such loan.
(b) Regulations.--Not later than 180 days after the date of
enactment, the Administrator shall issue regulations
implementing this Act.
(c) Definitions.--In this Act:
(1) Administration.--The term ``Administration'' means the
Small Business Administration.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Administration.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Williams) and the gentleman from Maryland (Mr. Olszewski)
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 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. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of H.R. 7401, the Small
Business Lending Fraud Prevention Act, introduced by the gentleman from
Pennsylvania (Mr. Meuser) and the gentlewoman from New Hampshire (Ms.
Goodlander).
Last year, a former SBA loan officer pled guilty to submitting false
statements in order to fraudulently secure over $500,000 in pandemic
relief loans for herself and family members. When the SBA initially
denied the loans, the SBA employee approved them herself.
The SBA Office of Inspector General identified multiple instances in
which SBA employees approved loans to relatives or others who were
barred from conflict of interest rules and noted that such cases were
rarely prosecuted. We must take serious steps to avoid such cases in
the future. It should not be possible for fraud like this to occur.
This bipartisan legislation offers a commonsense solution to add a
layer of security to crack down on loan fraud. H.R. 7401 requires SBA
employees to certify that they have no conflicts of interest before
processing a loan, to disclose any conflicts immediately, and to recuse
themselves if a conflict of interest is discovered.
It is our responsibility to ensure taxpayer funds are handled
appropriately. This bill will provide a safeguard against improper loan
approvals and establish a clear basis for prosecution if an employee
knowingly approves loans prohibited by conflict of interest rules.
Mr. Speaker, I urge my colleagues to support H.R. 7401, and I reserve
the balance of my time.
Mr. OLSZEWSKI. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of the Small Business Lending Fraud
Prevention Act.
Let me begin by commending Representatives Meuser and Goodlander for
their bipartisan work on this bill, which would enhance SBA's internal
processes to further detect fraud.
As the chairman mentioned, recently an SBA loan officer pled guilty
to making false statements after approving more than $550,000 in
fraudulent COVID-19 pandemic loans for herself and for family members.
The previous administration identified the wrongdoing, terminated the
employee, and referred the case to the Office of Inspector General.
This proves that the process worked. However, requiring loan officers
to attest that they are not violating any conflict of
[[Page H4141]]
interest laws or regulations every time they originate, review, or
approve a loan is a simple step that further reinforces ethical
standards and reminds them that misconduct has consequences.
Implementing this practice will help to increase accountability,
strengthen compliance, and deter fraud.
Mr. Speaker, I am pleased to support this bipartisan bill, and I
reserve the balance of my time.
Mr. WILLIAMS of Texas. Mr. Speaker, we must pass H.R. 7401 to
strengthen integrity in SBA lending programs by requiring employees
involved in loan decisions to certify they have no prohibited conflicts
of interest.
Mr. Speaker, I reserve the balance of my time.
Mr. OLSZEWSKI. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, in closing, this committee has played an integral role
in conducting oversight of SBA programs, especially the pandemic relief
programs. Approximately $1.2 trillion of economic aid was distributed
through SBA's pandemic relief programs over the course of the pandemic,
providing economic relief to small businesses all over the country.
Unfortunately, bad actors took advantage of the programs, and it has
become clear that we need to work together to recover fraudulent
dollars. The previous administration took strong steps to root out
fraud and to put internal controls in place to prevent it, and the
Inspector General has been working diligently to uncover fraudulent
schemes.
The bottom line is that the current process worked. The bad actor at
the SBA was identified, investigated, and prosecuted. Moving forward,
SBA employees being required to certify there is no conflict of
interest before approving a loan provides an extra layer of security
which will help deter fraud.
Once again, I applaud Representatives Goodlander and Meuser for
working together on this bill that enhances conflict of interest laws
at SBA and provides even more accountability.
Mr. Speaker, I yield back the balance of my time.
{time} 1500
Mr. WILLIAMS of Texas. Mr. Speaker, I urge my colleagues to vote in
favor of H.R. 7401 to support transparency, accountability, and public
confidence in the administration of SBA loans, 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. 7401.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. WILLIAMS of Texas. 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, further
proceedings on this question will be postponed.
The point of no quorum is considered withdrawn.
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