H.R.2987 - Capping Excessive Awarding of SBLC Entrants Act; CEASE Act (119th Congress)
Summary
H.R. 2987, also known as the CEASE Act, aims to amend the Small Business Act by placing a limit on the number of small business lending companies (SBLCs) authorized to make loans under section 7. The bill proposes capping the number of for-profit SBLCs at 16. This legislation was introduced in the House of Representatives on April 24, 2025, and referred to the Committee on Small Business.
Expected Effects
The primary effect of the CEASE Act would be to restrict the number of authorized small business lending companies. This could lead to increased competition among potential SBLCs seeking authorization. It may also impact the availability of loans for small businesses, depending on the efficiency and effectiveness of the remaining SBLCs.
Potential Benefits
- Could lead to more rigorous oversight and potentially higher quality lending practices among the limited number of SBLCs.
- May reduce the risk of fraud or mismanagement within the SBLC program due to increased scrutiny.
- Could foster greater stability within the small business lending market by limiting the number of participants.
- Might encourage existing SBLCs to improve their services and offerings to remain competitive.
- Could simplify regulatory compliance and oversight for the Small Business Administration (SBA).
Potential Disadvantages
- May reduce access to capital for small businesses, particularly those in underserved markets, if the existing SBLCs are insufficient to meet demand.
- Could stifle innovation and competition within the small business lending sector by limiting new entrants.
- May create barriers to entry for new lending companies with potentially beneficial approaches or technologies.
- Could lead to regional disparities in access to capital if the authorized SBLCs are not evenly distributed geographically.
- Might increase the potential for lobbying and political influence among existing SBLCs seeking to maintain their authorized status.
Constitutional Alignment
The bill appears to align with the constitutional power of Congress to regulate commerce (Article I, Section 8). The Small Business Act, which this bill amends, is an exercise of this power to support and regulate small businesses, which are integral to the national economy. The limitation on the number of lending companies does not appear to infringe on any specific constitutional rights or protections.
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).