[Senate Report 114-267]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 108
114th Congress       }                         {              Report
                                 SENATE
 2d Session          }                         {               114-267
======================================================================

 
   THE COMMUNICATING LENDER ACTIVITY REPORTS FROM THE SMALL BUSINESS 
                 ADMINISTRATION (CLEAR SBA) ACT OF 2015

                                _______
                                

                  May 26, 2016.--Ordered to be printed

                                _______
                                

Mr. Vitter, from the Committee on Small Business and Entrepreneurship, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 967]

    The Committee on Small Business and Entrepreneurship to 
which was referred the bill (S. 967) to require the Small 
Business Administration to make information relating to lenders 
making covered loans publicly available, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill, as amended, do 
pass.

                            I. INTRODUCTION

    The CLEAR SBA Act (S. 967) was introduced by the 
Committee's Ranking Member, Senator Jeanne Shaheen, on April 
15, 2015. Cosponsors include: Senators Cantwell, Fischer, 
Hirono and Peters.
    The CLEAR SBA Act requires the Small Business 
Administration (SBA) to establish a searchable online database, 
known as a ``Lender Activity Index,'' to provide consumers with 
more transparent, user-friendly data about local SBA lenders.
    During the markup of the bill, the Fischer amendment to the 
bill was approved unanimously by voice vote. The Fischer 
amendment is identical to the Risch-Landrieu amendment that 
passed the Committee during the 113th Congress as part of S. 
537. The Fischer amendment provides that the SBA may not 
increase the burden on lenders in order to comply with the 
Lender Activity Index provision in the underlying bill. The 
amendment also asserts that it is the sense of Congress that no 
additional funding will be made available to carry out this 
program. Operation costs of this program, according to the 
amendment text, should be paid from existing SBA funds. The 
bill, as amended, was also approved unanimously by voice vote.

              II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

    The Small Business Administration (SBA) administers several 
loan programs to support small businesses, including its 
flagship 7(a) and 504/Certified Development Company (504/CDC) 
loan guaranty programs. By guaranteeing a portion of each loan, 
the SBA encourages banks and other lenders to make loans to 
small businesses owners who otherwise may not qualify for 
traditional financing options.
    In the past two fiscal years alone (FY13\1\ and FY14\2\), 
SBA supported $46.5 billion in loans to approximately more than 
105,000 small businesses each year through its 7(a) and 504/CDC 
loan guaranty programs. As of the end of Fiscal Year 2014, 
there were more than 2,200 7(a) lenders\3\ and 228 Certified 
Development Companies nationwide. While the SBA currently 
releases some information publicly about SBA lending partners 
and activity, it can be extremely difficult to find and 
comprehend for those who are not SBA lending professionals.
---------------------------------------------------------------------------
    \1\U.S. Small Business Administration FY2015 Congressional Budget 
Justification and FY2013 Annual Performance Report, Pg. 35, the 7(a) 
Loan program approved 46,398 loans to small businesses for $17.9 
billion. Pg. 36, the 504 Certified Development Loan program approved 
7,708 loans for a total of $5.2 billion.
    \2\U.S. Small Business Administration FY2016 Congressional Budget 
Justification and FY2014 Annual Performance Report, Pg. 37, the 7(a) 
Loan program approved 45,730 loans for $19.2 billion. Pg. 40, the 504 
Certified Development Loan program approved 5,725 loans for a total of 
$4.2 billion.
    \3\U.S. Small Business Administration FY2016 Congressional Budget 
Justification and FY2014 Annual Performance Report, Pg. 42.
---------------------------------------------------------------------------
    The CLEAR SBA Act requires the SBA to create an online, 
searchable database on the agency's website called the ``Lender 
Activity Index,'' which will provide consumers with more 
transparent, user-friendly data about their local SBA lenders. 
Potential borrowers will be able to see which banks in their 
area provide SBA loans, and with this information, approach 
those banks. The Committee believes that the Lender Activity 
Index is a common-sense proposal to increase transparency and 
accountability at the SBA, simplify the process of obtaining a 
loan, and ultimately put more capital in the hands of America's 
small businesses.
    The CLEAR SBA Act has been considered several times since 
2012.
    During the 112th Congress, Senator Landrieu included a 
provision providing for a Lender Activity Index in Senate 
Amendment 2521 (S. Amdt. 2521), which she filed to S. 2237, the 
Small Business Jobs and Tax Relief Act of 2012, on July 11, 
2012. Division B of S. Amdt. 2521, entitled the Success 
Ultimately Comes from Capital, Contracting, Education, 
Strategic Partnerships, and Smart Regulations (SUCCESS) Act, 
included the language identical to the CLEAR SBA Act as a 
portion of Title II. Although it came up short of the 60 votes 
needed to end debate, the amendment received a strong 57 
bipartisan votes, including five Republicans, when it received 
a vote on the Senate floor on July 12, 2012. Shortly 
thereafter, Chair Landrieu filed the SUCCESS Act as a 
standalone bill. On July 25, 2012, Chair Landrieu introduced S. 
3442, the SUCCESS Act of 2012, with eight co-sponsors, 
including Committee members Senator Cardin and Senator Shaheen, 
as well as Senators Blumenthal, Boxer, Gillibrand, Lieberman, 
Merkley and Whitehouse. Ultimately, however, none of the bills 
or amendments made it to the President's desk during the 112th 
Congress.
    During the 113th Congress, the CLEAR SBA Act (S. 537) was 
introduced as a standalone bill by the Committee's Chair, 
Senator Mary L. Landrieu, on March 12, 2013. The CLEAR SBA Act 
also required the Small Business Administration (SBA) to 
establish a searchable online database, known as a ``Lender 
Activity Index.'' During the markup of the bill, a Risch-
Landrieu amendment to the bill was approved unanimously by 
voice vote. The Risch-Landrieu amendment provided that the SBA 
may not increase the burden on lenders in order to comply with 
the bill. The amendment also asserted that it was the sense of 
Congress that no additional funding would be made available to 
carry out this program. The bill, as amended, was also approved 
unanimously by voice vote with the following Senators present: 
Landrieu, Risch, Cantwell, Cardin, Cowan, Fischer, Hagan, 
Heitkamp, Johnson (WI), Levin, Pryor, Rubio, Scott and Shaheen. 
Ultimately, however, the bill did not make it to the 
President's desk during the 113th Congress.

                      III. HEARINGS & ROUNDTABLES

    In the 112th Congress:
    On November 29, 2012, the Committee held a hearing 
entitled, ``Creating Jobs and Growing the Economy: Legislative 
Proposals to Strengthen the Entrepreneurial Ecosystem.'' The 
purpose of the hearing was to discuss the legislative proposals 
included in the ``Success Ultimately Comes from Capital, 
Contracting, Education, Strategic Partnerships, and Smart 
Regulation (SUCCESS) Act of 2012'' (S. 3442), which was the 
result of recommendations gathered during a series of three 
Committee roundtables examining the entrepreneurial ecosystem 
during the 112th Congress. Among the provisions that the 
Committee examined during the hearing was Section 231, which 
provided for the Lender Activity Index and would later comprise 
the CLEAR SBA Act of 2013.
    In the 113th Congress:
    On March 14, 2013, the Committee held a roundtable 
entitled, ``Helping Small Businesses Weather Economic 
Challenges & Natural Disasters: Review of Legislative Proposals 
on Access to Capital and Disaster Recovery.'' The purpose of 
the roundtable was to discuss four legislative proposals on 
small business access to capital and disaster recovery on which 
the Committee would focus during the beginning of the 113th 
Congress, including the CLEAR SBA Act. Participants included a 
wide range of small business owners, investors, stakeholders 
and SBA representatives, including the Associate Administrator 
for the SBA's Office of Capital Access. The roundtable followed 
up on previous Committee roundtables and legislative hearings 
held during the 112th Congress and provided an opportunity for 
Committee members to highlight their relevant priorities ahead 
of an upcoming markup on access to capital and disaster 
recovery legislation.

                        IV. DESCRIPTION OF BILL

    S. 967 requires the SBA to post a user-friendly Lender 
Activity Index on the SBA website. Users will be able to access 
the following data for any given bank: name of bank or 
Certified Development Company (CDC), number of SBA loans each 
lender made, total dollar amount of SBA loans of each bank or 
CDC, zip code of lender activity (zip code of borrower), 
industries lent to (hospitality, manufacturing, service, 
software, etc.), stage of business cycle (new or existing 
business) and other business specific information (i.e. Women-
Owned Businesses, Minority-Owned Businesses, or Veteran-Owned 
Businesses). The Committee intends for the data to be available 
for the year to date and for users to be able to compare data 
to 3 previous fiscal years. The Committee also intends for 
quarterly and annual data to be included.
    The Fischer substitute amendment to S. 967 stipulates that 
in creating the Lender Activity Index, the SBA cannot require 
additional paperwork from lenders or otherwise increase the 
burden on them in any way. Furthermore, the SBA is expected to 
use existing funds to create the database. Thus, the Lender 
Activity Index comes at no cost to taxpayers.

                           V. COMMITTEE VOTE

    In compliance with rule XXVI (7)(b) of the Standing Rules 
of the Senate, the following vote was recorded on April 23, 
2015.
    A motion to adopt the Communicating Lender Activity Reports 
from the Small Business Administration (CLEAR) Act, a bill to 
require the Small Business Administration to make information 
related to lenders making covered loans publicly available, as 
amended by the Fischer substitute amendment, was agreed to by 
voice vote as part of a manager's package that included seven 
additional bills. The following Senators were present: Vitter, 
Risch, Fischer, Gardner, Ernst, Ayotte, Enzi, Shaheen, 
Cantwell, Cardin, Heitkamp, Booker, Coons, Hirono, and Peters.

                           VI. COST ESTIMATE

    In compliance with rule XXVI(11)(a)(1) of the Standing 
Rules of the Senate, the Committee estimates the cost of the 
legislation will be equal to the amounts discussed in the 
following letter from the Congressional Budget Office:

                                                      May 14, 2015.
Hon. David Vitter, 
Chairman, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 967, the 
Communicating Lending Activity Reports from the Small Business 
Administration Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                       Keith Hall. 
    Enclosure.

S. 967--Communicating lending activity reports from the Small Business 
        Administration Act

    As ordered reported by the Senate Committee on Small 
Business and Entrepreneurship on April 23, 2015.
    S. 967 would require the Small Business Administration 
(SBA) to develop a database that tracks information about 
lenders that participate in the agency's loan guarantee 
programs and the loans they have made under those programs 
(which are termed covered loans in the bill). The database 
would contain information, such as the name of the lender, the 
number and total dollar amount of covered loans made by the 
lender, whether the loans are made for existing or new 
businesses, and the SBA program that provided the guarantee for 
the loans. The SBA would be required to collect this 
information for fiscal years 2009 through 2015 and to make it 
available on the agency's website.
    Based on information from the SBA, CBO expects that lender 
data already collected by the agency would be sufficient to 
meet the bill's requirements to collect information and that 
the cost to present that information on the agency's website 
would be insignificant. Therefore, CBO estimates that 
implementing S. 967 would have no significant effect on 
spending subject to appropriation. Enacting S. 967 would not 
affect direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    S. 967 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by Theresa Gullo, Assistant Director 
for Budget Analysis.

                  VII. EVALUATION OF REGULATORY IMPACT

    In compliance with rule XXVI(11)(b) of the Standing Rules 
of the Senate, it is the opinion of the Committee that no 
significant additional regulatory impact will be incurred in 
carrying out the provisions of this legislation. There will be 
no additional impact on the personal privacy of companies or 
individuals who utilize the services provided.

                   VIII. SECTION-BY-SECTION ANALYSIS


Section 1. Title

    This section provides the title of the bill. This Act may 
be cited as the ``Communicating Lender Activity Reports from 
the Small Business Administration Act'' or the ``CLEAR SBA 
Act.''

Section 2. SBA Lender Activity Index

    The Small Business Act is amended to create an SBA website 
database of information on lenders making loans covered under 
the Small Business Act or Small Business Investment Act of 
1958. The Administrator has 6 months from enactment to create 
the Lender Activity Index.
    It must include: (i) name of the lender, (ii) number of 
covered loans made by the lender, (iii) total dollar amount of 
the covered loans, (iv) the ZIP code of each loan recipient, 
(v) the industries of the loan recipients, (vi) whether the 
covered loan is for an existing business or a new business, 
(vii) number and total dollar amount of covered loans to women-
owned, minority-owned, or veteran-owned businesses and (vii) 
whether the covered loan was made under the 7(a) or 504 loan 
programs. Data will initially cover fiscal years 2009-2015.
    The section, as amended, also specifies that no additional 
paperwork burdens may be put on lenders in order to comply with 
the Lender Activity Index provision and states that the SBA is 
expected to use existing funds to create the database.

                                  [all]