H.R. 4238 — Disaster Loan Accountability and Reform Act

This section defines terms used throughout the Act, including the Small Business Administration and its Administrator, the specified Senate and House committees as the appropriate committees of Congress, and an SBA disaster loan as a direct loan under section 7(b) of the Small Business Act excluding those authorized under section 1110 of the CARES Act.

This section requires monthly reports on the operation of the Small Business Administration disaster loan program regardless of whether a major disaster has been declared. It revises the funding estimate to specify the dates when available funding reaches 10 percent of the most recent appropriation and when funds will be depleted, adds a summary of changes to estimates and assumptions on obligations and expenditures with supporting data, and prohibits official travel by the Administrator until a late report is submitted.

This section requires the President's annual budget submission to include separate statements comparing requested appropriations for SBA disaster loans and COVID-EIDL loans to their respective 10-year averages, along with explanations for any differences, for both loan costs and administrative costs. It defines an SBA disaster loan as a direct loan under section 7(b) of the Small Business Act (15 U.S.C. 636(b)) other than a COVID-EIDL loan, and a COVID-EIDL loan as a direct loan authorized under section 1110 of the CARES Act.

This section requires the Administrator of the Small Business Administration to notify the Senate and House Committees on Appropriations and Small Business within 24 hours after the balance of funds for direct disaster loans falls below 10 percent of the 10-year average annual cost, using the most recent presidential budget request or, if unavailable, the prior 10-year period.

This section directs the Comptroller General to report within 180 days on the average weekly obligation rate of unobligated balances for SBA disaster loans, average weekly disbursements during the first 12 weeks after loan acceptance for home, business, and economic injury disaster loan borrowers from October 1, 2015, through the date of enactment, and average amounts of fully disbursed loans originated after July 31, 2023, separated by loan type. It requires the Administrator to respond within 90 days with an implementation plan for any recommendations.

This section directs the Comptroller General to submit a report within one year of enactment to the appropriate congressional committees on the cost, as defined under the Federal Credit Reform Act, of increases in home loan limits, extensions of deferment periods, expansions of mitigation options, modifications to credit-elsewhere criteria, changes to collateral requirements, and other terms for loans under section 7(b)(1) of the Small Business Act made by two specified SBA final rules, as well as the effect of those changes on loan subsidies.

This section directs the Administrator of the Small Business Administration to submit a report to the appropriate congressional committees within 30 days of enactment detailing planned corrections to improve forecasting, data quality, and budget assumptions for the cost of direct disaster loans. It further requires progress updates every 90 days until 90 days after all corrections are implemented.