HR 9691 — 7(a) Program Risk Oversight Act

(a) Establishment There is established within the Administration the Office of Credit Risk Management (in this section referred to as the “Office”). (b) Duties The Office shall be responsible for supervising— (1) any lender making loans under section 7(a) [15 U.S.C. 636(a)] (in this section referred to as a “7(a) lender”); (2) any Lending Partner or Intermediary participant of the Administration in a lending program of the Office of Capital Access of the Administration; and (3) any small business lending company or a non-Federally regulated lender without regard to the requirements of section 650 of this title. (c) Director (1) In general The Office shall be headed by the Director of the Office of Credit Risk Management (in this section referred to as the “Director”), who shall be a career appointee in the Senior Executive Service (as defined in section 3132 of title 5). (2) Duties The Director shall be responsible for oversight of the lenders and participants described in subsection (b), including by conducting periodic reviews of the compliance and performance of such lenders and participants. (d) Supervision duties for 7(a) lenders (1) Reviews With respect to 7(a) lenders, an employee of the Office shall— (A) be present for and supervise any such review that is conducted by a contractor of the Office on the premise 1 of the 7(a) lender; and (B) supervise any such review that is not conducted on the premise 1 of the 7(a) lender. (2) Review report timeline (A) In general Notwithstanding any other requirements of the Office or the Administrator, the Administrator shall develop and implement a review report timeline which shall— (i) require the Administrator to— (I) deliver a written report of the review to the 7(a) lender not later than 60 business days after the date on which the review is concluded; or (II) if the Administrator expects to submit the report after the end of the 60-day period described in clause (i), notify the 7(a) lender of the expected date of submission of the report and the reason for the delay; and (ii) if a response by the 7(a) lender is requested in a report submitted under subparagraph (A), require the 7(a) lender to submit responses to the Administrator not later than 45 business days after the date on which the 7(a) lender receives the report. (B) Extension The Administrator may extend the time frame described in subparagraph (A)(i)(II) with respect to a 7(a) lender as the Administrator determines necessary. (e) Enforcement authority against 7(a) lenders (1) Informal enforcement authority The Director may take an informal enforcement action against a 7(a) lender if the Director finds that the 7(a) lender has violated a statutory or regulatory requirement under section 7(a) [15 U.S.C. 636(a)] or any requirement in a Standard Operating Procedures Manual or Policy Notice related to a program or function of the Office of Capital Access. (2) Formal enforcement authority (A) In general With the approval of the Lender Oversight Committee established under section 657u of this title, the Director may take a formal enforcement action against any 7(a) lender if the Director finds that the 7(a) lender has violated— (i) a statutory or regulatory requirement under section 7(a), including a requirement relating to credit elsewhere; or (ii) any requirement described in a Standard Operating Procedures Manual or Policy Notice, related to a program or function of the Office of Capital Access. (B) Enforcement actions An enforcement action imposed on a 7(a) lender by the Director under subparagraph (A) shall be based on the severity or frequency of the violation and may include assessing a civil monetary penalty against the 7(a) lender in an amount that is not greater than $250,000. (3) Appeal by lender A 7(a) lender may appeal an enforcement action imposed by the Director described in this subsection to the Office of Hearings and Appeals established under section 634(i) of this title or to an appropriate district c...