Loan Agents and the Section 7(a) Program Inspection Report
- Title:
- Loan Agents and the Section 7(a) Program Inspection Report
- AgencyName:
- Small Business Administration
- MajorOrganizationalSubdivision:
- Office of the Inspector General
- Unit:
- Inspection and Evaluation Division
- Abstract:
- The Office of Inspector General (OIG) issued an inspection
report that identifies cost-effective ways to prevent loan
agent fraud in the Section 7(a) program. While loan agents
can provide valuable assistance to small businesses
seeking access to capital, some have perpetrated
fraudulent schemes that have resulted in defaulted loans
that had to be purchased by SBA. The OIG recommends
that the Agency (1) establish a loan agent registration process to provide accountability, (2) propose expanding
current legislation to include loan agents among those
subject to National Crime Information Center criminal history
checks, and (3) develop a system for monitoring loan
agent performance to provide early warning of any
potential problems. The criminal history checks should be performed for each prospective loan agent as part of the
registration process to identify and/or deter unsuitable candidates. The OIG also recommends that SBA maintain
two lists on the Internet: currently registered agents, and
agents whose privilege to conduct business with the
Agency has been suspended or revoked. This would
allow borrowers and lenders to verify the status of agents
they are considering using.
- Purpose:
- The OIG initiated this inspection because of fraudulent
behavior by some loan agents. Such fraud had been a
major focus of an October 1995 hearing before the
Subcommittee on Government Programs of the House
Committee on Small Business. As of the end of Fiscal
Year 1997, in the 7(a) program alone, criminal
investigations had been initiated on 354 individuals involving loan applications handled by 18 loan agents.
Twenty-eight percent of these agents had prior criminal
records.
- AgencyProgram:
- N/A
- DistributorName:
- Office of Inspector General
- DistributorOrganization:
- Small Business Administration
- DistributorStreetAddresss:
- 409 3rd Street, S.W.
- DistributorCity:
- Washington
- DistributorState:
- DC
- DistributorZip:
- 20416-4112
- DistributorCountry:
- USA
- DistributorTelephone:
- (202) 205-7197
- DistributorFax:
- (202) 205-6922
- DistributorResourceDescription:
- 98-03-01
- DistributorOrderProcess:
- This report can be obtained by contacting the Inspection
and Evaluation Division at (202) 205-7202 or by writing to:
Office of Inspector General, Inspection and Evaluation
Division, 409 3rd Street, S.W., Mail Code 4115,
Washington, D.C. 20416-4112.
- SourcesOfData:
- N/A
- AccessConstraints:
- None
- UseConstraints:
- None
- ContactName:
- Office of Inspector General
- ContactOrganization:
- Small Business Administration
- ContactStreetAddress:
- 409 3rd Street, S.W.
- ContactCity:
- Washington
- ContactState:
- DC
- ContactZipCode:
- 20416-4112
- ContactCountry:
- USA
- ContactTelephone:
- (202) 205-7197
- ContactFax:
- (202) 205-6922
- ScheduleNumber:
- N/A
- ControlIdentifier:
- SBA10890
- RecordSourceAgencyName:
- Small Business Administration
- RecordSourceUnit:
- Office of Administrative Services
- DateOfLastModification:
- 19980502