HR-4743 has passed in both the House and the Senate, and went to the desk of President Trump on June 13, 2018, for signature. One of the most talked about parts of this bill is that it provides the ability for the SBA to increase the cap on loans each year by 15% if that cap could be exceeded in that fiscal year (which ends September 30). The SBA must give notice to certain committees in both the House and Senate at least 30 days before the date they intend to exercise this authority. This flexibility will avoid loans being held up like they were in 2015 when the cap was reached mid-year and the SBA had to go to Congress to get additional funding for the loans, suspending the loan program with over 900 applicants waiting loan guarantee approvals.
In addition, HR-4743 provides statutory authority for the Small Business Administration (SBA) Office of Credit Risk Management and the SBA Lender Oversight Committee to act in general. This includes granting the director the authority to take formal enforcement action against 7(a) lenders that have violated a statutory or regulatory requirement or any requirement of the SOPs (Standard Operating Procedures). An enforcement action can include a fine of up to $250,000, based on the severity or frequency of the violation.