504 Program Risk Oversight Act
Summary
The 504 Program Risk Oversight Act mandates the Administrator of the Small Business Administration (SBA) to conduct an annual risk analysis of the portfolio of loans guaranteed under Title V of the Small Business Investment Act of 1958. This analysis aims to assess the overall program risk associated with these loans. The Act requires the Administrator to submit an annual report to Congress detailing the findings of the risk analysis, starting December 1, 2025, and to make the report publicly available on the SBA's website within 7 days of submission to Congress.
Expected Effects
The Act will increase transparency and oversight of the SBA's 504 loan program. This will allow Congress and the public to better understand the risks associated with these loans. It will also enable the SBA to identify and mitigate potential risks, potentially leading to a more stable and effective program.
Potential Benefits
- Improved Risk Management: The annual risk analysis will help the SBA identify and mitigate potential risks in the 504 loan program.
- Increased Transparency: The public availability of the report will increase transparency and accountability.
- Better Informed Decision-Making: Congress and the SBA will be better informed about the risks associated with the 504 loan program, leading to better decision-making.
- Support for Small Businesses: By ensuring the stability and effectiveness of the 504 loan program, the Act supports small businesses.
- Economic Stability: By mitigating risks in the loan program, the Act contributes to economic stability.
Potential Disadvantages
- Increased Administrative Burden: The annual risk analysis and reporting requirements may increase the administrative burden on the SBA.
- Potential for Over-Regulation: The increased oversight could lead to over-regulation of the 504 loan program, potentially hindering its effectiveness.
- Cost of Compliance: The SBA will incur costs associated with conducting the risk analysis and preparing the report.
- Potential for Misinterpretation: The risk analysis report could be misinterpreted, leading to unwarranted concerns about the 504 loan program.
- Limited Impact: The Act may have a limited impact if the SBA does not effectively use the risk analysis to mitigate risks.
Constitutional Alignment
The Act aligns with the US Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce and to make all laws which shall be necessary and proper for carrying into execution the foregoing powers. The Act's provisions for oversight and risk analysis of the SBA's loan programs fall under Congress's authority to regulate commerce and promote the general welfare. The reporting requirements to Congress also align with Congress's oversight responsibilities.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).