Letter to The Honorable Isabella Casillas Guzman, Administrator, U.S. Small Business Administration (July 19, 2023)

Summary

A letter dated July 19, 2023 to Administrator Isabella Casillas Guzman of the U.S. Small Business Administration, with a signature block naming Roger Williams, Chairman, Committee on Small Business. The letter states that the roll-out of the SBA's new lending rules affecting the 7(a) loan program has been problematic and refers to inquiries about the Office of Capital Access' communications with outside stakeholders. It recounts the April 26, 2023 Senate Small Business Committee hearing at which Patrick Kelley testified and Ranking Member Joni Ernst's May 17, 2023 follow-up letter. The House Committee on Small Business requests the same information, including Kelley's emails, calendar notices and phone call records for October 26, 2022 to April 12, 2023, no later than August 2, 2023.

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Full text

                                                 July 19, 2023

The Honorable Isabella Casillas Guzman
Administrator
U.S. Small Business Administration
409 3rd Street, SW
Washington, D.C. 20416

Dear Administrator Guzman:

        As noted by Republicans and Democrats on both the Senate and House Committees on
Small Business, the roll-out of the Small Business Administration’s (SBA) new lending rules
that affect the agency’s flagship 7(a) loan program have been problematic.1 Aside from the
policy implications of these drastic changes, official inquiries have been made regarding the
Office of Capital Access’ communications with external stakeholders during the notice and
comment periods during these two rulemakings. We write today to reiterate these requests for
information on the problematic rules and their drafting.

        In the Senate Small Business Committee hearing with then Associate Administrator
Patrick Kelley on April 26, 2023, Mr. Kelley was asked whether he had made any, “promises or
commitments concerning the SOPs documents or agency procedural notices in order to garner
support for these rules.”2 He testified under oath that he had not.3 During the hearing, Ranking
Member Joni Ernst requested, and Mr. Kelley agreed, to share records of his schedule, phone
logs, and email communications during the rulemaking periods for both 7(a) rules for the period
covering October 2022 – April 2023.4

        Ranking Member Ernst sent a follow-up letter on May 17, 2023, regarding this request.5
The letter asked that the SBA honor the commitment by Mr. Kelley to share his communication
records despite his resignation from the SBA on May 12, 2023.6 The House Committee on Small
Business shares the concerns articulated by Ranking Member Ernst and believes the requested

1
  Letter from Benjamin Cardin et al., Chairman, S. Comm. on Small Bus. & Entrepreneurship, to Isabella Casillas
Guzman, Administrator to the U.S. Small Bus. Admin. (May 16, 2023).
2
  Oversight of SBA’s Implementation of Final Rules to Expand Access to Capital: Hearing Before S. Comm. on
Small Business and Entrepreneurship, 118th Cong. (Apr. 26, 2023).
3
  Id. (statement of Associate Administrator of the Office of Capital Access, Patrick Kelley, U.S. Small Business
Admin.).
4
  Id.
5
  Letter from Joni Ernst, Ranking Member, S. Comm. on Small Bus. & Entrepreneurship to Isabella Casillas
Guzman, Administrator, U.S. Small Bus. Admin. (May 17, 2023).
6
  Id.
The Honorable Isabella Casillas Guzman
July 19, 2023
Page 2 of 2

information is vital to better understand the actions taken by Mr. Kelley and ensure nothing
nefarious happened outside of the public notice and comment period to influence the outcomes
of these rulemakings. Therefore, the House Committee on Small Business requests the same
information sought in Ranking Member Ernst’s letter from May 17, 2023 (copied below for your
convenience) as soon as possible but no later than August 2, 2023:

       1. Patrick Kelley’s emails, calendar notices, phone call records, and any other official
          communications during the full rulemaking periods for both rules which ran from
          October 26, 2022 to April 12, 2023.

       To schedule the delivery of your response or ask any related follow-up questions, please
contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee on
Small Business has broad authority to investigate “problems of all types of small business” under
House Rule X. Thank you in advance for your cooperation with this inquiry.

                                           Sincerely,




                                     Roger Williams
                                         Chairman
                                 Committee on Small Business


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