HR-7401 — Small Business Lending Fraud Prevention Act

YourVoice.Now Summary

Transparency & Accountability

SBA loan staff would state in writing that they have no conflict of interest — before each loan.

Transparency & Accountability

Conflict-of-interest statements from SBA loan staff — required before each loan

SBA staff who help decide on a loan would sign a written statement saying they have no conflict under federal ethics law. The requirement would start 270 days after the bill becomes law.

Written promise to report later conflicts — and step off the loan

This promise is part of the same signed statement, and it covers conflicts that surface later. An employee who learns of one must report it to a supervisor at once and step away from the loan.

More about this bill

If you apply for a small business loan backed by the government, nothing about your application would change. The new rule falls on the Small Business Administration (SBA) staff who handle it. An SBA employee who helps start, review, or approve a loan would have to sign a statement first. It says they have no conflict of interest. The written statement also covers what happens later. If staff find out about a conflict after signing, they must tell their supervisor right away. They also have to stop working on that loan. Federal ethics rules already bar employees from working on matters they have a financial stake in. What is new is the signed statement, loan by loan, before the work starts. The SBA would have 180 days to write the rules. The statements would start 270 days after the bill becomes law.

Congressional Summary

Small Business Lending Fraud Prevention Act This bill requires Small Business Administration (SBA) employees who participate in the origination, review, or approval of SBA loans to certify in writing prior to such participation that the employee does not have any conflict of interest with respect to the loan, will disclose any such conflict of interest arising after the certification is made, and understands the requirements with respect to conflicts of interest applicable SBA employees. Under current law, federal employees must disclose financial conflicts of interest with respect to a particular matter and recuse themselves from such matter (with limited exceptions upon authorization from the employee's agency designee). The SBA must issue regulations implementing the requirements of this bill.

Legislative Subjects

Administrative law and regulatory proceduresGovernment employee pay, benefits, personnel managementGovernment ethics and transparency, public corruptionSmall Business Administration

Details

Congress: 119th
Chamber: House
Status: summarized
Action: Reported to House
Action Date: 2026-02-20
Date Added: 2026-06-19
Source: Congress.gov →

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