,,ii #aaeth ,,congress #b;d ,session ,s4 #bbhc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #i1 #bjah,mr4 ,risch 7for himself and ,mrs4 ,shaheen7 introduced the following bill2 which was read twice and referred to the ,committee on ,small ,business and ,entrepreneurship ,a ,,bill ,to amend the ,small ,business ,act to strengthen the ,office of ,credit ,risk ,management within the ,small ,business ,administration1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,small ,business #g7;a7 ,lending ,oversight ,reform ,act of #bjah4 #b4 ,definitions ,in this ,act1 the terms ,administration and ,administrator mean the ,small ,business ,administration and the ,administrator thereof1 respectively4 #c4 ,codification of the ,office of ,credit ,risk ,management and the ,lender ,oversight ,committee 7a7 ,in general ,the ,small ,business ,act 7#ae ,u4,s4,c4 #fca et seq47 is amended-- 7#a7 by redesignating section #dg as section #di2 and 7#b7 by inserting after section #df the following3 #dg4 ,office of ,credit ,risk ,management 7a7 ,establishment ,there is established within the ,administration the ,office of ,credit ,risk ,management 7in this section referred to as the ,office74 7b7 ,duties ,the ,office shall be responsible for supervising-- 7#a7 any lender making loans under section #g7;a7 7in this section referred to as a #g7;a7 lender72 7#b7 any participant in a lending program of the ,office of ,capital ,access of the ,administration2 and 7#c7 any small business lending company or a non-,federally regulated lender without regard to the requirements of section #bc4 7c7 ,director ,the ,office is headed by the ,director of the ,office of ,credit ,risk ,management 7in this section referred to as the ,director71 who shall-- 7#a7 be a career appointee in a ,senior ,executive ,service position 7as defined in section #cacb of title #e1 ,united ,states ,code72 and 7#b7 be responsible for oversight of the lenders and participants described in subsection 7b71 including by conducting periodic reviews of the compliance and performance of those lenders and participants4 7d7 ,supervision duties for #g7;a7 lenders 7#a7 ,reviews ,with respect to #g7;a7 lenders1 an employee of the ,office shall-- 7,a7 be present for and supervise any review of a #g7;a7 lender that is conducted by a contractor of the ,office on the premises of the #g7;a7 lender2 and 7,b7 supervise any review of a #g7;a7 lender that is not conducted on the premises of the #g7;a7 lender4 7#b7 ,review report timeline ,notwithstanding any other requirements of the ,office or the ,administrator1 the ,administrator shall develop and implement a review report timeline which shall-- 7,a7 require the ,administrator to-- 7i7 deliver a written report of the review to the #g7;a7 lender not later than #fj business days after the date on which the review is conducted2 or 7ii7 if the ,administrator expects to submit the report after the end of the #fj-;business-day period described in clause 7i71 notify the #g7;a7 lender in writing of the expected submission day of the report and the reason for the delay2 and 7,b7 if a response by the #g7;a7 lender is requested in a report submitted under subparagraph 7,a71 require the #g7;a7 lender to submit a response to the ,administrator not later than #de business days after the date on which the #g7;a7 lender receives the report4 7e7 ,enforcement authority against #g7;a7 lenders 7#a7 ,informal enforcement authority ,the ,director may take an informal enforcement action against a #g7;a7 lender if the ,director finds that the #g7;a7 lender has violated a requirement under section #g7;a7 or any requirement in a ,standard ,operating ,procedures ,manual or ,policy ,notice related to a program or function of the ,office of ,capital ,access4 7#b7 ,formal enforcement authority 7,a7 ,in general ,with the approval of the ,lender ,oversight ,committee established under section #dh1 the ,director may take a formal enforcement action against any #g7;a7 lender if the ,director finds that the #g7;a7 lender has violated-- 7i7 a requirement under section #g7;a71 including a requirement relating to credit elsewhere1 or any regulation implementing such section2 or 7ii7 any requirement described in a ,standard ,operating ,procedures ,manual or ,policy ,notice related to a program or function of the ,office of ,capital ,access4 7,b7 ,enforcement actions 7i7 ,in general ,any enforcement action taken with respect to a #g7;a7 lender by the ,director under subparagraph 7,a7-- 7,i7 shall be based on the severity or frequency of the violation2 and 7,,ii7 may include assessing a civil monetary penalty against the #g7;a7 lender in an amount that is not greater than #bej1jjj4 7#c7 ,appeal by lender ,a #g7;a7 lender may appeal an enforcement action imposed by the ,director described in paragraph 7#b7 to the ,office of ,hearings and ,appeals established under section #e7;i7 or to an appropriate district court of the ,united ,states4 7f7 ,regulations ,not later than #a year after the date of enactment of the ,small ,business #g7;a7 ,lending ,oversight ,reform ,act of #bjah1 the ,administrator shall issue regulations1 after opportunity for notice and comment under section #eec of title #e1 ,united ,states ,code1 to carry out subsection 7e74 7g7 ,servicing and liquidation responsibilities ,during any period during which a #g7;a7 lender is suspended from participating under section #g7;a71 or if a #g7;a7 lender is prohibited from making loans under section #g7;a71 the #g7;a7 lender shall remain obligated to maintain all servicing and liquidation activities delegated to the lender by the ,administrator1 unless otherwise specified by the ,director4 7h7 ,portfolio risk analysis of #g7;a7 loans 7#a7 ,in general ,the ,director shall annually conduct a risk analysis of the portfolio of the ,administration with respect to all loans guaranteed under section #g7;a74 7#b7 ,report to ,congress ,on ,december #a1 #bjah1 and every ,december #a thereafter1 the ,director shall submit to ,congress an annual report containing the results of each portfolio risk analysis conducted under paragraph 7#a7 during the fiscal year preceding the submission of the report1 which shall include-- 7,a7 an analysis of the overall program risk of loans guaranteed under section #g7;a72 7,b7 an analysis of program risk1 set forth separately by industry concentration2 7,c7 without identifying individual #g7;a7 lenders by name1 a consolidated analysis of the risk created by the individual #g7;a7 lenders responsible for not less than #a percent of the gross loan approvals by dollar and amount of loans for the year covered by the report2 7,d7 steps taken by the ,administrator to mitigate the risks identified in subparagraphs 7,a71 7,b71 and 7,c72 7,e7 the number of #g7;a7 lenders1 the gross and net number of loans made1 and the gross and net dollar amount of loans made2 7,f7 the number and dollar amount of total defaults and total repurchases1 and the percentage and total amount of recoveries2 7,g7 the number and type of enforcement actions recommended by the ,director2 7,h7 the number and type of enforcement actions approved by the ,lender ,oversight ,committee established under section #dh2 7,i7 the number and type of enforcement actions disapproved by the ,lender ,oversight ,committee2 and 7,j7 the number and dollar amount of civil monetary penalties assessed4 7i7 ,budget submission and justification ,effective for the first fiscal year occurring after the date of enactment of the ,small ,business #g7;a7 ,lending ,oversight ,reform ,act of #bjah1 and each fiscal year thereafter1 the ,director shall provide1 in writing a budget submission and justification for the submission to the ,administrator1 which shall-- 7#a7 include the salaries and expenses of the ,office and lender oversight fees2 7#b7 be submitted at or about the time of the budget submission by the ,president under section #aaje7;a7 of title #ca1 ,united ,states ,code2 and 7#c7 be maintained in an indexed form and made available for public review for a period of not less than #e years beginning on the date of submission4 #dh4 ,lender ,oversight ,committee 7a7 ,establishment ,there is established within the ,administration the ,lender ,oversight ,committee 7in this section referred to as the ,committee74 7b7 ,membership ,the ,committee shall consist of #aa members appointed by the ,administrator1 of whom-- 7#a7 #c members shall be voting members1 of whom #b shall be career appointees serving in a ,senior ,executive ,service position 7as defined in section #cacb of title #e1 ,united ,states ,code72 and 7#b7 #h members shall be nonvoting members who shall serve in an advisory capacity on the ,committee4 7c7 ,duties ,the ,committee shall-- 7#a7 review reports on lender oversight activities2 7#b7 review formal enforcement action recommendations of the ,director of the ,office of ,credit ,risk ,management with respect to any lender making loans under section #g7;a7 and any participant in a lending program of the ,office of ,capital ,access of the ,administration2 7#c7 in carrying out paragraph 7#b7 with respect to a formal enforcement action taken under subsection 7d7 or 7e7 of section #bc1 vote to recommend the action or vote to not recommend the action to the ,administrator or a designee of the ,administrator2 7#d7 in carrying out paragraph 7#b7 with respect to any other formal enforcement action not otherwise specified in subsection 7d7 or 7e7 of section #bc1 vote to approve1 disapprove1 or modify the action2 7#e7 review in an advisory capacity any lender oversight1 portfolio risk management1 or program integrity matters brought by the ,director of the ,office of ,credit ,risk ,management2 and 7#f7 take such other actions and perform such other functions as may be delegated to the ,committee by the ,administrator4 7d7 ,meetings 7#a7 ,in general ,the ,committee shall meet as necessary1 but not less frequently than on a quarterly basis4 7#b7 ,reports ,the ,committee shall submit to the ,administrator a report detailing each meeting of the ,committee1 including if the ,committee does or does not vote to recommend a formal enforcement action of the ,director of the ,office of ,credit ,risk ,management with respect to a lender4 4 7b7 ,transfer of functions 7#a7 ,office of ,credit ,risk ,management ,all functions of the ,office of ,credit ,risk ,management of the ,administration1 including the personnel1 assets1 and obligations of the ,office of ,credit ,risk ,management1 as in existence on the day before the date of enactment of this ,act1 shall be transferred to the ,office of ,credit ,risk ,management established under section #dg of the ,small ,business ,act1 as added by subsection 7a74 7#b7 ,lender ,oversight ,committee ,all functions of the ,lender ,oversight ,committee of the ,administration1 including the personnel1 assets1 and obligations of the ,lender ,oversight ,committee1 as in existence on the day before the date of enactment of this ,act1 shall be transferred to the ,lender ,oversight ,committee established under section #dh of the ,small ,business ,act1 as added by subsection 7a74 7c7 ,deeming of name 7#a7 ,office of ,credit ,risk ,management ,any reference in a law1 regulation1 document1 paper1 or other record of the ,united ,states to the ,office of ,credit ,risk ,management of the ,administration shall be deemed a reference to the ,office of ,credit ,risk ,management of the ,administration established under section #dg of the ,small ,business ,act1 as added by subsection 7a74 7#b7 ,lender ,oversight ,committee ,any reference in a law1 regulation1 document1 paper1 or other record of the ,united ,states to the ,lender ,oversight ,committee of the ,administration shall be deemed a reference to the ,lender ,oversight ,committee of the ,administration established under section #dh of the ,small ,business ,act1 as added by subsection 7a74 7d7 ,technical and conforming amendments ,the ,small ,business ,act 7#ae ,u4,s4,c4 #fca et seq47 is amended-- 7#a7 in section #c7r77#b7 7#ae ,u4,s4,c4 #fcb7r77#b77-- 7,a7 in this paragraph heading1 by striking ,,sba2 and 7,b7 in the matter preceding subparagraph 7,a71 by striking ,,sba2 and 7#b7 in section #ah 7#ae ,u4,s4,c4 #fdg71 by striking subsection 7b7 and inserting the following3 7b7 ,as used in this ,act1 the term agricultural enterprises means those small business concerns engaged in the production of food and fiber1 ranching1 and raising of livestock1 aquaculture1 and all other farming and agricultural related industries4 4 #d4 ,definition of credit elsewhere ,the ,small ,business ,act 7#ae ,u4,s4,c4 #fca et seq47 is amended-- 7#a7 in section #c 7#ae ,u4,s4,c4 #fcb71 by striking subsection 7h7 and inserting the following3 7h7 ,the term credit elsewhere means-- 7#a7 for the purposes of this ,act 7except as used in section #g7;b771 the availability of credit on reasonable terms and conditions to the individual loan applicant from non-,federal1 non-,state1 or non-local government sources1 considering factors associated with conventional lending practices1 including-- 7,a7 the business industry in which the loan applicant operates2 7,b7 whether the loan applicant is an enterprise that has been in operation for a period of not more than #b years2 7,c7 the adequacy of the collateral available to secure the requested loan2 7,d7 the loan term necessary to reasonably assure the ability of the loan applicant to repay the debt from the actual or projected cash flow of the business2 and 7,e7 any other factor relating to the particular credit application1 as documented in detail by the lender1 that cannot be overcome except through obtaining a ,federal loan guarantee under prudent lending standards2 and 7#b7 for the purposes of section #g7;b71 the availability of credit on reasonable terms and conditions from non-,federal sources taking into consideration the prevailing rates and terms in the community in or near where the applicant small business concern transacts business1 or the applicant homeowner resides1 for similar purposes and periods of time4 2 and 7#b7 in section #g7;a77#a77;,a77i7 7#ae ,u4,s4,c4 #fcf7;a77#a77;,a77i771 by inserting ,the ,administrator has the authority to direct1 and conduct oversight for1 the methods by which lenders determine whether a borrower is able to obtain credit elsewhere4 before ,no financial assistance4 #e4 ,authority for administrator to increase amount for general business loans ,section #bj of the ,small ,business ,act 7#ae ,u4,s4,c4 #fca note7 is amended-- 7#a7 by redesignating subsection 7j7 as subsection 7f72 and 7#b7 by adding at the end the following3 7g7 ,authority ,to increase amount of general business loans 7#a7 ,in general ,with respect to fiscal year #bjah and each fiscal year thereafter1 if the ,administrator determines that the amount of commitments by the ,administrator for general business loans authorized under section #g7;a7 for a fiscal year could exceed the limit on the total amount of commitments the ,administrator may make for those loans under this ,act1 an appropriations ,act1 or any other provision of law1 the ,administrator may make commitments for those loans for that fiscal year in total amount equal to not more than #aae percent of that limit4 7#b7 ,approval required before exercising authority 7,a7 ,in general ,not later than #cj days before the date on which the ,administrator intends to exercise the authority under paragraph 7#a71 the ,administrator shall submit notice of the intent of the ,administrator to exercise the authority to-- 7i7 the ,committee on ,small ,business and ,entrepreneurship and the ,subcommittee on ,financial ,services and ,general ,government of the ,committee on ,appropriations of the ,senate2 and 7ii7 the ,committee on ,small ,business and the ,subcommittee on ,financial ,services and ,general ,government of the ,committee on ,appropriations of the ,house of ,representatives4 7,b7 ,approval ,the ,administrator may not exercise the authority under paragraph 7#a7 unless the exercise of authority has been approved1 in writing1 by the ,committee on ,appropriations and the ,committee on ,small ,business and ,entrepreneurship of the ,senate and the ,committee on ,appropriations and the ,committee on ,small ,business of the ,house of ,representatives4 7#c7 ,limitation ,the ,administrator shall not exercise the authority under paragraph 7#a7 more than once during any fiscal year4 4 #f4 ,disclosure of waivers 7a7 ,in general ,if the ,administrator exercises statutory or regulatory authority to waive a regulation related to a program or function of the ,office of ,capital ,access of the ,administration-- 7#a7 the waiver shall be in writing and shall specify the grounds for approving the waiver2 and 7#b7 the ,administrator shall notify the public of all waivers of regulations approved by the ,administration1 which notice shall-- 7,a7 be published in the ,federal ,register not less than annually2 7,b7 cover the period beginning on the date after the last day covered by the previous notice2 7,c7 describe the nature of the requirement that has been waived and specify the regulation involved2 7,d7 include a brief description of the grounds for approval of the waiver2 and 7,e7 state how more information about the waiver and a copy of the request and the approval may be obtained4 7b7 ,no new waiver authority ,nothing in subsection 7a7 shall be construed as creating new authority for the ,administrator to waive regulations of the ,administration4 7c7 ,,gao study on standard operating procedures manual or policy notice waiver process ,not later than #a year after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to the ,committee on ,small ,business and ,entrepreneurship of the ,senate and the ,committee on ,small ,business of the ,house of ,representatives a report evaluating-- 7#a7 the methods and specific processes used by the ,administration to waive requirements in the ,standard ,operating ,procedures ,manual or ,policy ,notices relating to loans made under section #g7;a7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fcf7;a772 and 7#b7 the number of waivers described in paragraph 7#a7 granted during the period of #e fiscal years preceding the date of enactment of this ,act4