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Bipartisan coalition calls on SBA to roll back record-related restrictions in COVID-19 small business loan programs

[womenagainstregistry.org and ccresourcecenter.org –  4/18/20]

On April 17 a diverse bipartisan group of civil rights, advocacy, and business organizations, including CCRC, sent a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza expressing concern over the restrictions imposed by the SBA on people with a record of arrest or conviction under two programs recently authorized by Congress in response to the COVID-19 crisis.  The letter points out that these unwarranted restrictions on loan programs intended to aid small businesses and non-profits will have a significant and detrimental impact in communities across the country, and a particularly harsh effect on minority business owners and employees who are disproportionately affected by the criminal legal system as a result of institutional discrimination.  It urges that federal relief be made equitably accessible to all who need it.

The letter describes how the SBA’s program restrictions based on record are

  • unnecessary and confusing
  • inconsistent with Congress’ intent in enacting the CARES Act
  • overbroad and unfair
  • racially discriminatory

In conclusion, the letter urges the SBA to take the following steps:

  • At a minimum, bring the record restrictions for PPP and EIDL programs in line with those that applied to Section 7(a) and 7(b) loans under regulations adopted prior to enactment of the CARES Act.
  • Relax existing rules and policies that restrict access to PPP or EIDL financial assistance for people with a record in the urgent circumstances presented by the pandemic, in line with the purposes of the CARES Act.
  • Ensure that the application forms for SBA financial assistance accurately reflect the eligibility requirements and are written in a clear manner.

An Appendix to the letter describes how the new rules and policies governing the Payroll Protection Program are more restrictive than those governing the 7(a) program generally, and how barriers based on arrest or conviction may also disqualify people with any sort of a record from loans under the EIDL program authorized under the SBA’s existing 7(b) disaster loan program.

The letter —available in PDF below – was sent by the following organizations:

American Civil Liberties Union
Chicago Lawyers’ Committee for Civil Rights
Collateral Consequences Resource Center
Community Legal Services of Philadelphia
Drug Policy Alliance
FreedomWorks
Georgia Justice Project
Interfaith Action for Human Rights
Jewish Council for Public Affairs
Justice & Accountability Center of Louisiana
Justice Action Network
Leadership Conference on Civil and Human Rights
National Association of Criminal Defense Lawyers
National Employment Law Project
Public Interest Law Center
Reproductive Justice Inside
Safer Foundation
Washington Lawyers’ Committee for Civil Rights and Urban Affairs
Women Against Registry

 

Read the article on ccresourcecenter.org

Read the letter on ccresourcecenter.org

 

 

 

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I am glad to see these organizations come together for a group that has a hard self-advocating.

Unfortunately, I can actually see them loosening restrictions; except for, of course…. any one required to register as a sex offender.

On April 17 a diverse bipartisan group of civil rights, advocacy, and business organizations, including CCRC, sent a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza expressing concern over the restrictions imposed by the SBA on people with a record of arrest or conviction under two programs recently authorized by Congress in response to the COVID-19 crisis.  The letter points out that these unwarranted restrictions on loan programs intended to aid small businesses and non-profits will have a significant and detrimental impact in communities across the country, and a particularly harsh effect on minority business owners and employees who are disproportionately affected by the criminal legal system as a result of institutional discrimination.  It urges that federal relief be made equitably accessible to all who need it.

For the first time, this Covid-19 crisis is shedding a spot light on the true cost of the limitations and restrictions placed on business owners being able to receive SBA loans. I was unable to get money through the SBA when I ran my business, and the politicians I contacted basically had no sympathy saying that if I suffered it was my own fault.

Now, they are seeing that it’s not just the business owner – it’s the employees that lose as well. Suddenly eyes are being opened to the fact that it doesn’t matter the background of a business owner – they are employers and their workers need to eat just like employees everywhere.

Perhaps there is still hope. Rep. Sensenbrenner says that he will not seek re-election, and he has been a major push behind legislation like this over the years. I talked to him years ago at one of his open-office-hours events here in town, and he was totally unwilling/unable to listen to anything he disagreed with. Since he single-handedly pushed lots of this type of legislation maybe things will change, at least a little.

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