House Small Business Committee advances seven bills altering SBA rules, staffing and lending oversight

The House Committee on Small Business on May 21 advanced seven bills affecting the Small Business Administration (SBA), voting to report each measure to the full House after debate and roll-call votes.

Committee members said the package aims to refocus the SBA on lending and small-business services, tighten oversight of nonbank lenders, and reduce regulatory burdens. Ranking members and other Democrats countered that the bills are largely messaging measures that could disrupt SBA operations, increase costs, or impede access to SBA programs.

The bills the committee reported would: (1) bar certain SBA activities described by sponsors as "electioneering" (H.R. 2968, Business Over Balllots Act); (2) require relocation of a portion of SBA headquarters staff into the field (H.R. 2027, Returning SBA to Main Street Act); (3) codify citizenship/immigration verification for some SBA applicants (H.R. 2966, American Entrepreneurs First Act); (4) relocate SBA offices out of jurisdictions deemed "sanctuary" by sponsors (H.R. 2931, Save SBA from Sanctuary Cities Act); (5) limit the number of Small Business Lending Companies (SBLCs) the SBA may license (H.R. 2987, the CS Act); (6) impose an SBA regulatory budget cap and require agency reporting on regulatory costs (H.R. 2965, Small Business Regulatory Reduction Act of 2025); and (7) create new procedures for petitions and retrospective review under the Regulatory Flexibility Act (H.R. 1163, Prove It Act of 2025).

Why it matters: Committee Republicans framed the package as restoring the SBA to its core mission of helping Main Street — reducing fraud, limiting political activity, and moving staff closer to lenders and entrepreneurs. Democrats and several witnesses warned the bills were rushed, lacked adequate oversight, and could have unintended legal and operational consequences for borrowers, lenders and SBA employees.

Major points from committee debate and staff statements

- Allegations of political activity and prior investigations: Majority members repeated findings from previous oversight that they said showed the SBA under the prior administration engaged in inappropriate voter-registration arrangements; sponsors said statutory codification is needed so future administrations cannot repeat such activity. Ranking Member Nydia Velázquez and other Democrats said the committee had not found evidentiary support for the broad claims and called for the SBA administrator to testify before legislation moves forward. Velázquez said, "there hasn't been presented any shred of evidence that undocumented immigrants have been given any loans." (Velázquez)

- Workforce relocation and staffing reductions: Multiple speakers described recent and proposed SBA personnel changes. Several Democrats noted that the SBA already had a large field presence — one member said "only 12% of SBA's workforce was located at its headquarters" as of December 2024 — and warned the committee that the administrator's announced reorganization and voluntary separation incentives could shrink the workforce further. Sponsors countered that the bills require moving staff "back to Main Street," citing a 30% relocation goal included in the underlying text and praising Administrator Kelly Loeffler's reorganization plans. (Rep. Alford; Rep. McGarvey)

- Lending, SBLC oversight and Community Advantage program concerns: Supporters of the CS Act said the SBA previously lifted a decades-long moratorium on new SBLC licenses and that legislation is needed to cap licenses to what the agency can oversee. Ranking members said the bill was silent on how it would affect Community Advantage SBLCs and noted that the Community Advantage program has many registered lenders and issued loans in recent fiscal years; they urged hearings before codifying limits.

- Citizenship verification and lending access: Proponents of the American Entrepreneurs First Act argued citizenship/immigration verification is needed to protect taxpayer-backed lending; opponents said legal status is not a proxy for creditworthiness and raised potential conflicts with the Equal Credit Opportunity Act and practical compliance burdens for program lenders.

- Regulatory reform and small-business protections: Several bills would change how agencies account for costs and conduct retrospective reviews. Sponsors argued rules have imposed large compliance costs and need more robust small-business review; opponents and nonpartisan analyses cited by Democrats (including the Government Accountability Office and CBO estimates cited in debate) warned the proposals could disrupt necessary rulemaking, increase administrative burdens, or be used by large interests to delay rules that benefit small entities.

Votes at a glance (committee roll-call tallies)

- H.R. 2968, Business Over Ballots Act (as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 2027, Returning SBA to Main Street Act (as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 2966, American Entrepreneurs First Act (as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 2931, Save SBA from Sanctuary Cities Act (as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 2987, CS Act (SBLC cap; as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 2965, Small Business Regulatory Reduction Act of 2025 (as amended): approved by committee, tally reported as 15 ayes, 11 noes. - H.R. 1163, Prove It Act of 2025 (as amended): approved by committee, tally reported as 15 ayes, 11 noes.

What was not decided here

- Multiple members asked for additional oversight briefings and the SBA administrator's testimony on workforce reductions, office relocations and any plans to assume student-loan servicing responsibilities. Several amendments that would have required GAO analysis, administrator testimony, or exemptions for veterans were debated and, where roll calls were held, some were not agreed to by the committee; recorded votes were ordered and postponed for several of those amendments during markup.

Background and next steps

The committee recorded roll-call votes and ordered the measures reported to the House, where they may receive further floor action, amendments, or referral to other committees. Committee Democrats said they will seek additional oversight and information from the SBA before further action; committee Republicans said prompt reporting is necessary to implement changes quickly. Several members asked that committee staff make technical conforming changes and reserved the right to file supplemental views within two business days.

Ending note: The markup split largely along party lines on the bills' final disposition, with sponsors calling the package necessary to restore SBA focus on lending and field services and opponents calling for more oversight, hearings, and analysis before codifying the proposed changes into law.