DLARA
Introduced June 27, 2025 · Last action June 24, 2026
Plain English Summary
This bill adds oversight and accountability measures to the Small Business Administration's disaster loan program following a 2024 funding shortfall. It requires the SBA to submit more detailed monthly reports to Congress, changes the presidential budget request format to include separate accounting for disaster loans, and empowers the SBA to restrict new disaster loans to those with collateral when funding falls below 10% of the 10-year average cost. The bill also mandates several government audits and reports to identify what went wrong.
Who benefits
Congressional oversight committees (Senate and House Small Business and Appropriations committees) gain enhanced reporting and audit authority; the Government Accountability Office gains statutory audit mandates; the SBA Inspector General gains investigation authority. No private-sector groups or individuals directly benefit from this bill.
Who pays / loses
Small business disaster loan applicants who do not have collateral to pledge will lose access to disaster loans when funding falls below the 10% threshold, as the SBA will be able to restrict new loans to collateral-requiring borrowers. This disproportionately affects home and business borrowers in underserved or rural areas with fewer assets. The SBA Administrator faces travel restrictions as an enforcement penalty for missing reporting deadlines. SBA staff face increased reporting and forecasting burdens.
Funding & Lobbying Interests
This bill does not authorize new spending or establish new funding streams. It is an oversight and accountability measure responding to a real funding shortfall that occurred in the SBA disaster loan program by October 2024 (per the Biden letter and SBA Administrator letters referenced in Section 9). The bill's sponsors are primarily Republican members from North Carolina, South Carolina, and other states. No donor data was provided, but the bill's focus on accountability, collateral requirements, and restricting unsecured lending aligns with conservative fiscal oversight principles and lender-friendly policies that typically receive support from business lending and banking interests.
Political Impact
Affected Groups
Small business owners and homeowners seeking disaster loans in presidentially-declared disaster areas, particularly those without significant collateral (estimated at millions based on historical disaster loan volume, but no specific number stated in the bill). Rural and disadvantaged borrowers will face the highest barriers when the 10% funding trigger is crossed. Congressional appropriations committees and the SBA's executive and Inspector General offices will face new workload demands. Affected geographic areas include any region under a major disaster declaration.
Political Subtext
Proponents argue this bill closes a critical gap in congressional oversight after the SBA failed to anticipate and report a disaster loan funding shortfall in fall 2024, characterizing it as necessary accountability to prevent future mismanagement of taxpayer funds and ensure disaster victims are not left without access to loans. Critics would likely argue the collateral requirement restriction during low-funding periods effectively cuts off access to unsecured disaster loans for the poorest disaster victims, undermining the program's purpose of reaching borrowers unable to access credit elsewhere, and that the numerous reporting requirements create bureaucratic burden without preventing fraud or improving loan quality. Non-partisan evidence on disaster loan program effectiveness is mixed: the Federal Credit Reform Act cost accounting used in Section 8 shows disaster loans have historically carried higher subsidy costs (meaning they lose money), but GAO has not yet published comprehensive analysis of the 2023-2024 loan rule changes or the October 2024 shortfall. The bill does not contradict established evidence but responds to a recent real event requiring investigation.
Real-World Stakes
If this bill passes: (1) During the next major disaster in a low-funding period, small businesses and homeowners without collateral will be unable to obtain SBA disaster loans, likely increasing reliance on private debt or leaving borrowers unserved; (2) Congress will gain real-time visibility into loan program spending via enhanced monthly reports and budget justifications, potentially enabling mid-year appropriations adjustments; (3) The SBA's forecasting methods will be audited and corrected, improving accuracy for future budgets. Analogous precedent: Following the Paycheck Protection Program (PPP) fraud scandals of 2020-2022, Congress imposed similar reporting and oversight requirements that revealed SBA's limited internal controls and forecasting capacity. The SBA's October 2024 funding shortfall—triggered by higher-than-expected disaster loan demand following Hurricanes Helene and Milton and revised loan amounts under 2023-2024 rule changes—demonstrates the risk of underestimating loan program costs. A 2024 SBA Office of Inspector General audit found the agency had not accurately tracked disaster loan subsidy costs. The collateral requirement trigger in Section 6(b) is new authority without direct federal precedent, but mirrors credit-tightening policies used by private lenders during liquidity stress.
Sponsor
Co-sponsors (19)
RRep. Murphy, Gregory F. [R-NC-3]RRep. Ciscomani, Juan [R-AZ-6]RRep. LaMalfa, Doug [R-CA-1]RRep. Flood, Mike [R-NE-1]RRep. Luna, Anna Paulina [R-FL-13]DRep. Davis, Donald G. [D-NC-1]RRep. Gimenez, Carlos A. [R-FL-28]RRep. Fry, Russell [R-SC-7]RRep. Wilson, Joe [R-SC-2]RRep. Harrigan, Pat [R-NC-10]RRep. Shreve, Jefferson [R-IN-6]DRep. Goodlander, Maggie [D-NH-2]RDel. King-Hinds, Kimberlyn [R-MP-At Large]RRep. Donalds, Byron [R-FL-19]RRep. Rouzer, David [R-NC-7]RRep. Taylor, David [R-OH-2]RRep. Begich, Nicholas J. [R-AK-At Large]RRep. Edwards, Chuck [R-NC-11]RRep. Meuser, Daniel [R-PA-9]
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
Top contributing industries
Other$361,750
Finance$39,251.01
Law$20,650
Healthcare$13,049.25
Technology$11,850
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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