[Senate Report 114-267]
[From the U.S. Government Publishing Office]
Calendar No. 108
114th Congress } { Report
SENATE
2d Session } { 114-267
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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.
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\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.
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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.
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