Disaster Loan Accountability and Reform Act or the DLARA

This bill modifies the Small Business Administration (SBA) disaster loan program and requires external review of, and reporting on, the program.

First, the bill requires the SBA to report monthly on the operation of the disaster loan program. (Currently, the SBA must report only during the applicable period for a major disaster.) The report must estimate the date on which available funding for such loans will reach 10% of the most recent appropriation and the date on which the funds will be depleted.

Second, the President's annual budget must include separate statements regarding the appropriations request for SBA disaster loans and COVID-19 Economic Injury Disaster Loans (EIDL), including explanations for any difference between the amount requested and the 10-year average cost for such loans.

Third, for a period of four years, the SBA must notify Congress when the unobligated balance of amounts available for disaster loans is less than 10% of the 10-year average annual cost provided in the most recent Presidential budget. At such point, the SBA may limit disaster loans to collateralized amounts.

Finally, the bill requires additional oversight of the disaster loan program, including

• a Government Accountability Office report on the disbursement of disaster loans and the effect of specified SBA rules on home lending limits,
• an SBA Office of Inspector General review of recent funding shortfalls for disaster loans, and
• an SBA report on improvements for forecasting the cost of disaster loans.