H.R 4256 would increase the amount that certain banks and savings associations may invest in Small Business Investment Companies (SBICs) from 5 percent to 15 percent, subject to the approval of the appropriate federal banking agency. SBICs are privately owned and managed investment funds, licensed and regulated by the Small Business Administration (SBA), that use debt guaranteed by the SBA and private capital to make investments in qualifying small businesses. Using information from the SBA, CBO estimates that implementing the act would have an insignificant effect on the administrative costs of operating the SBIC program because of the limited number of banks that would probably be affected; any additional spending for administrative costs would be subject to the availability of appropriations.
Enacting H.R. 4256 would increase administrative costs for approving proposed investments that exceed 5 percent of the capital and surpluses of certain banks and savings associations. Costs for the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) are recorded as increases in direct spending and costs for the Federal Reserve are recorded as reductions in revenue. CBO estimates that those effects would be insignificant.
