504 Program Risk Oversight Act

This Act may be cited as the “504 Program Risk Oversight Act”.

Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at the end the following:

“511. Portfolio risk analysis.—

(a) In general.— The Administrator shall annually conduct a risk analysis of the portfolio of the Administration with respect to all loans guaranteed under this title.

(b) Report to Congress.— Not later than December 1, 2025, and annually thereafter, the Administrator shall submit to Congress a report containing the results of each portfolio risk analysis conducted under subsection (a) during the fiscal year preceding the submission of the report, which shall include—

(1) an analysis of the overall program risk of loans guaranteed under this title;

(2) an analysis of the program risk, set forth separately by industry concentration;

(3) without identifying individual development companies by name, a consolidated analysis of the risk created by development companies making loans under this title that are responsible for not less than 1 percent of gross loan approvals under this title, set forth separately by—

(A) the dollar value of the loans made by such development companies;

(B) the number of loans made by such development companies; and

(C) an analysis of the program risk for such loans with a dollar value—

(i) less than or equal to $500,000;

(ii) greater than $500,000 and less than or equal to $1,000,000;

(iii) greater than $1,000,000 and less than or equal to $2,000,000; and

(iv) greater than $2,000,000 and less than or equal to $5,500,000;

(4) an analysis of the program risk for loan guarantees made under this title for loans that were originated—

(A) less than one year before the date of submission of the report;

(B) at least one year, but not more than two years before such date; and

(C) more than two years before such date;

(5) an analysis of the program risk for loan guarantees made under this title for loans that were originated—

(A) to a borrower that uses such loan to open a business;

(B) to a borrower not described in subparagraph (A) that is a business concern that has been in operation for less than or equal to two years before the date of origination; and

(C) to a borrower that is a business concern that has been in operation for more than two years on the date of origination;

(6) an analysis of the program risk for loan guarantees made under this title for loans that were originated for limited or special purpose properties;

(7) steps taken by the Administrator to mitigate the risks identified in paragraphs (1), (2), (3), (4), (5), and (6);

(8) the number of development companies, the number of loans made, and the gross dollar amount of the loans made under this title;

(9) the number and total dollar amount of purchases by the Administrator of the principal and interest of loans guaranteed under this title that are in default, the total dollar amount of collections recovered on such purchases, and the number and total dollar amount of charge-offs for such purchases;

(10) the number and type of enforcement actions with respect to a loan made by a development company under this title recommended by the Administrator; and

(11) the number and dollar amount of any civil monetary penalty assessed pursuant to an enforcement action described in paragraph (10).

(c) Availability of report.— The Administrator shall make available to the public on a website of the Administration the report required under subsection (b) not later than 7 days after the Administrator submits such report to Congress.

(d) Limited or special purpose property defined.— In this section, the term “limited or special purpose property” has the meaning given by the Administrator in the guidance titled “Lender and Development Company Loan Programs” (SOP 50 10 8; as in effect on June 1, 2025).”.