S. 2659 — 504 Credit Risk Management Improvement Act of 2025

This section expands the duties of the Office of Credit Risk Management to include oversight of certified development companies (CDCs) participating in the section 504 loan program (i.e., SBA-guaranteed loans for small business acquisition or improvement of major fixed assets). Specifically, it (1) requires random complete file reviews of loan closings with reports due within 60 days to the CDC, closing attorney, and Commercial Loan Service Center, and correction of deficiencies that could cause losses to SBA; (2) directs supervision of CDC reviews by Office staff (including on-site presence) and sets report timelines of 90 days after review conclusion (with delay notification) and CDC responses within 45 business days if requested; (3) authorizes the Director to take informal enforcement actions for violations and, with Lender Oversight Committee approval, formal actions including civil monetary penalties up to $250,000 based on violation severity or frequency, plus for annual report failures after 60 days either suspension from the program up to 30 days or penalties up to $10,000; and (4) requires annual risk analyses of the SBA 504 loan portfolio with reports to Congress on December 1 beginning in 2025 detailing overall program risk and other factors.

This section directs the Administrator of the Small Business Administration to issue rules, not later than 180 days after enactment, clarifying procedures for eligible certified development companies—those receiving assistance under title V of the Small Business Investment Act of 1958 (i.e., the SBA's 504 loan program for small business fixed assets)—to comply with the National Environmental Policy Act of 1969 (NEPA). The section states that it does not modify NEPA requirements.