Hearing — Oversight of SBA and Department of Treasury Pandemic Programs (July 17, 2020)

Summary

Small Business Committee Document Number 116–088, Oversight of the Small Business Administration and Department of Treasury Pandemic Programs, a hearing before the Committee on Small Business, U.S. House of Representatives, on Friday, July 17, 2020. The witnesses are Jovita Carranza, Administrator of the U.S. Small Business Administration, and Steven Mnuchin, Secretary of the U.S. Department of the Treasury. Opening statements come from Hon. Nydia Velázquez and Hon. Steve Chabot. In the opening statement, Chairwoman Velázquez says that about 110,000 small businesses have already closed their doors permanently and that an estimated 7.5 million additional firms are at risk.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Issuer: Congressional materials
Document type: Congressional Hearing
Case: Chrg Chrg 116Hhrg41299 Chrg 116Hhrg41299

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“Hearing — Oversight of SBA and Department of Treasury Pandemic Programs (July 17, 2020).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-chrg-116hhrg41299-chrg-116hhrg41299/, SHA-256 731bc5aec89e96257f18c55a8a0b1179e3d601b18e754427a1cad1ddd34e222d.

Full text

OVERSIGHT OF THE SMALL BUSINESS
ADMINISTRATION AND DEPARTMENT OF
TREASURY PANDEMIC PROGRAMS

HEARING
BEFORE THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION

HEARING HELD
JULY 17, 2020

Small Business Committee Document Number 116–088
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
41–299 WASHINGTON : 2021

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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina

MELISSA JUNG, Majority Staff Director
JUSTIN PELLETIER, Majority Deputy Staff Director and Chief Counsel
KEVIN FITZPATRICK, Staff Director

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CONTENTS
OPENING STATEMENTS
Page
Hon. Nydia Velázquez ............................................................................................. 1
Hon. Steve Chabot ................................................................................................... 3

WITNESSES
The Honorable Jovita Carranza, Administrator, U.S. Small Business Adminis-
tration, Washington, DC ...................................................................................... 5
The Honorable Steven Mnuchin, Secretary, U.S. Department of the Treasury,
Washington, DC ................................................................................................... 7

APPENDIX
Prepared Statements:
The Honorable Jovita Carranza, Administrator, U.S. Small Business Ad-
ministration, Washington, DC ..................................................................... 43
The Honorable Steven Mnuchin, Secretary, U.S. Department of the
Treasury, Washington, DC ........................................................................... 47
Questions and Responses:
Questions from Hon. Velázquez, Hon. Evans, Hon. Houlahan, Hon. Hern,
Hon. Burchett, and Hon. Bishop and Responses from Secretary
Mnuchin ......................................................................................................... 51
Additional Material for the Record:
Letter from William Manger, Associate Administrator, U.S. Small Busi-
ness Administration ...................................................................................... 62
National Association of Federally-Insured Credit Unions (NAFCU) ........... 00

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OVERSIGHT OF THE SMALL BUSINESS
ADMINISTRATION AND DEPARTMENT OF
TREASURY PANDEMIC PROGRAMS

FRIDAY, JULY 17, 2020

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The committee met, pursuant to call, at 10:31 a.m., Room 2118
and via Cisco WebEx, Rayburn House Office Building. Hon. Nydia
Velázquez [chairwoman of the Committee] presiding.
Present: Representatives Velázquez, Finkenauer, Golden, Kim,
Crow, Davids, Chu, Mfume, Evans, Schneider, Espaillat, Delgado,
Craig, Chabot, Balderson, Hern, Hagedorn, Stauber, Burchett,
Joyce, and Bishop.
Chairwoman VELÁZQUEZ. Good morning. I call this hearing to
order. Without objection, the Chair is authorized to declare a recess
at any time.
I want to thank everyone, especially our witnesses, for joining us
today for our committee’s hybrid hearing. I want to make sure to
note some important requirements.
Let me begin by saying that standing House and committee rules
and practice will continue to apply during hybrid proceedings.
House regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on. Remember to remain muted until you are recognized to mini-
mize background noise.
In accordance with the rules established under H.R. 965, staff
have been advised to mute participants only in the event there is
an advertent background noise.
I urge Members and staff to wear masks while in the hearing
room, and I thank you in advance for your commitment to a safe
environment for all here today.
Secretary Minuchin, Administrator Carranza, welcome to the
Small Business Committee, and thank you for being here today.
Let me start by saying I want to give a sincere thank you to all
the staff at both of your agencies who have worked tirelessly over
the last few months responding to this crisis. I am deeply appre-
ciative of all the work which helps support millions of American
jobs in a moment of unprecedented uncertainty. These are extraor-
dinary circumstances, and I would like to paint a picture for you
of the magnitude of the devastation that small businesses are going
through right now.
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Back in March, it became clear that COVID-19 will tear through
our communities leaving almost no sector of our economy un-
scathed. The heat on small businesses was in many cases deeper
than their larger counterparts.
I have been on phone calls with small business owners in my dis-
trict who have been mainstays in the community for decades, who
have lived through 9/11 and the Great Recession and are now hold-
ing back tears telling me that if we do not do more to fix the Pay-
roll Protection Program (PPP) and find long-term solutions, that
they cannot imagine their business, the source of income for them-
selves and their employees, to survive the COVID-19 pandemic. In
fact, about 110,000 small businesses have already closed their
doors permanently, and an estimated 7.5 million additional firms
are at risk for the same fate.
On top of all that, they turn on the news and see headlines like
‘‘Trump friends and family cleared for millions in small business
bailout’’ and ‘‘SBA exempted lawmakers, federal officials from eth-
ics rules in $660 billion loan program.’’
Let me tell you, that is a gut punch to the small businesses that
this program was intended to serve, the ones that did not have the
top-notch financial connections to quickly get a PPP loan. While we
are grateful to SBA for providing data that I have been calling for
since the start of PPP, it is no secret that there have been errors
that are cause for concern. I am troubled by the Bloomberg News
Report that at least 226,000 loans were likely misreported by con-
gressional districts, making it even harder for us to understand
how businesses in our district fared in the program.
Meanwhile, a report from the New York City controller suggests
that PPP loans were made in greater frequency in states that were
less hit by COVID-19 than in epicenters like New York City.
As we all know, the pandemic has been especially unforgiving for
our communities of color. Minorities have bore the brunt of the
health consequences of this terrible virus. We cannot let their busi-
nesses also disproportionately bear the economic consequences.
According to a survey, a mere 12 percent of Black and Latino
business owners who applied for PPP loans reported receiving what
they asked for, and nearly half anticipated being forced to close
permanently in the near future. We do not even know how Asian
and Native American business owners fared because demographic
data was not asked to be voluntarily provided. That is why col-
lecting demographic data on these loans was imperative. I will con-
tinue to press to set aside more resources for minority and women-
owned businesses, and I hope that we will commit to do more for
these businesses in what are sure to be tough months ahead.
I am sure you both can understand many in our country are
frightened. They are angry and they are hurting. We are here
today to bring transparency and accountability to ensure that
America knows they have a government that works as well for
them as it does for the well-connected corporations and friends of
this administration.
As lockdown orders started in March, storefronts were shuttered,
and waves of layoffs were taking place. In response, Congress pro-
vided relief to reeling business owners and their employees.

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First, Congress established the Paycheck Protection Program to
provide forgivable loans to businesses and nonprofits for mainly
covering payroll.
Second, to help small businesses that needed financing beyond
PPP, Congress enhanced SBA’s EIDL program to get more flexible
working capital to more businesses faster. Knowing that small
businesses operate on razor-thin margins, Congress created the
EIDL Grant Program to get cash into the hands of small busi-
nesses quickly to bridge the gap until their loans are dispersed. De-
spite the flaws in their implementation, these programs have been
a lifeline for millions of entrepreneurs and job creators, injecting
over $670 billion into the economy.
To address concerns and make the programs work better, our
committee held numerous hearings and forums with small busi-
nesses, lenders, and leading policy experts over the past few
months. One of the top issues we heard from PPP stakeholders is
the incomplete and everchanging guidance. Borrowers testified that
they have very little guidance regarding how to spend their loans
so they could qualify for full forgiveness. Lenders are still reporting
the process for seeking forgiveness is unclear and unworkable.
If forgiveness is the centerpiece of the program, a streamline effi-
cient process for getting those loans forgiven should be a priority.
Turning briefly to EIDL, the lack of clear communication has been
an ongoing issue. Given the urgency of this pandemic and the un-
certainty for so many small businesses, SBA must do a better job
communicating. As the spread of COVID-19 has accelerated in re-
cent weeks and lockdown orders return, it will be extremely impor-
tant that we take lessons learned since March to stave off unneces-
sary bankruptcies and make sure these programs are working for
America’s small firms. We also need to explore other ways SBA can
support our small business sector, like turning to tried and true
program enhancements that work after the Great Recession.
Once again, thank you for being here today. I know yield to
Ranking Member Chabot for his opening statement.
Mr. CHABOT. Thank you, Madam Chair. And I want to thank
Administrator Carranza, as well as Secretary Mnuchin, for being
with us here today and taking time out of your very busy schedule.
So thank you so much for being here, both of you.
While we all agree we must be forward-looking as we continue
to respond to the COVID-19 pandemic, the topic of today’s discus-
sion is equally important. We must continue to work together to
ensure the Federal government’s relief efforts face sound and pru-
dent oversight. These programs were developed to assist the Na-
tion’s smallest firms. Instances where ineligible businesses and en-
tities, including political organizations who benefitted from the pro-
grams must be examined closely.
Take, for example, the over $300,000 taxpayer-backed loans that
were received by the Ohio Democratic Party in May, and Madam
Chair, for the record, I would oppose such a bailout for the Repub-
lican Party as well, but it happened to be the Democratic Party in
Ohio that took advantage of this. And I do not think it was ever
intended for that type of thing to happen.
Additionally, oversight of how well the billions of dollars allo-
cated to assist small businesses was utilized is imperative. That

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will help us to formulate a future strategy and to make well-in-
formed decisions that benefit the greatest number of Americans.
I happen to represent most of the City of Cincinnati. For the past
few months I visited with countless small businesses, and obvi-
ously, many of their employees as well. And I and my staff have
spoken with representatives from the Cincinnati African American
Chamber of Commerce and the Urban League. And some of our
smallest businesses, particularly those in minority and economi-
cally disadvantaged communities, oftentimes the smallest busi-
nesses, and typically under 10 employees, when this started, and
many of them still do not, they did not have the strongest relation-
ship with banks or credit unions when they were seeking these
loans. So I think that it is something, and I know as this has
evolved and the Chair has been instrumental in that effort as well
and we have worked with her and her staff on that, but we have
to make sure that those folks in these economically disadvantaged
areas have access to this. Because as I say, oftentimes the relation-
ship they have had with the banking institutions, financial institu-
tions just is not there. So it makes it even tougher for them.
Now, it is impossible to legislate from Washington for every sin-
gle situation across the country. Likewise, it is impossible to regu-
late from Washington for every scenario that may come up. All of
the folks in this room recognize this and have been reminded since
March of that structural impossibility. Congress acted quickly ear-
lier this spring. Speed was paramount in getting funds into the
hands of small business owners to keep them afloat when they
were forced to shut down through no fault of their own. Consoli-
dating 6 months of legislative work in a little more than 6 days,
the Coronavirus Aid Relief and Economic Security (CARES) Act
was passed with overwhelming bipartisan support, Republicans
and Democrats working together, and it was signed into law by
President Trump on March 27th. This more than $2 trillion eco-
nomic relief package delivered on our commitment to do everything
possible to protect the American people from the public health and
economic impacts of COVID-19.
The CARES Act created the Paycheck Protection Program. Fol-
lowing passage of this landmark legislation, the SBA and the De-
partment of the Treasury worked tirelessly to execute the law and
issue regulations to inform borrowers and lenders alike how the
program would be administered. To the credit of everyone involved,
the first loans flowed from private lenders 7 days, just 1 week later
on April 3rd. Since that date, the PPP program has distributed
nearly 5 million loans to small firms in the amount of over half a
trillion dollars. In my district and the surrounding area alone,
small businesses utilized the program to preserve nearly a half a
million jobs.
These successes cannot be ignored, and Ohio is not alone. This
program provided small businesses and their workers a lifeline
across the entire Nation. Were there bumps in the road? Of course.
As I stated earlier, it is very difficult to get a program this size up
and running in a week. Have there been communication issues be-
tween the Federal government and the lenders and the borrowers?
Undoubtedly.

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But that is one of the reasons why we are here today. We must
examine and learn from the past and prepare for the future. Unfor-
tunately, there are still challenges that are presenting obstacles for
the Nation’s smallest firms. Because we continue to face this
threat, we must be forward-thinking. More needs to be done, and
we have proven that when we work together across the aisle,
across the capital, and across the different ends of Pennsylvania
Avenue, we can move mountains.
We are not done yet, and I look forward to engaging with you,
Madam Administrator, and you, Mr. Secretary, as well as you,
Madam Chair, as we continue to work for American small busi-
nesses. I want to thank you both for being here, and again, thank
the Chair for holding this hearing today. And I yield back.
Chairwoman VELÁZQUEZ. Thank you, Mr. Chabot.
I would like to take a moment to explain how this hearing will
proceed. Each witness will have 5 minutes to provide a statement,
and each committee Member will have 5 minutes for questions.
Please ensure that your microphone is on when you begin speaking
and that you return to mute when finished.
With that I would like to introduce our witnesses.
Our first witness today is The Honorable Jovita Carranza, Ad-
ministrator of the SBA. Administrator Carranza has an inspiring
background. Born in Illinois to an immigrant family from Mexico,
she began her career at UPS as a part-time employee, ultimately
climbing the corporate ranks to become President of Latin America
and Caribbean operations. In 2006, President Bush named her
Deputy Administrator for the Small Business Administration, and
most recently was the Treasurer of the United States. Welcome
back to our committee, Administrator Carranza.
Our second witness is The Honorable Steven Mnuchin, the Sec-
retary of the U.S. Department of Treasury. Mr. Mnuchin had a suc-
cessful career as a banker at Goldman Sachs for multiple decades
before leaving to join other hedge funds throughout the 2000s. He
was appointed Treasury Secretary by President Trump where he
has served for the last 3 years. Welcome to the House Small Busi-
ness Committee, and thank you for joining us today, Mr. Mnuchin.
Administrator Carranza, you are recognized for 5 minutes.

STATEMENTS OF THE HONORABLE JOVITA CARRANZA, AD-
MINISTRATOR, U.S. SMALL BUSINESS ADMINISTRATION; THE
HONORABLE STEVEN MNUCHIN, SECRETARY, U.S. DEPART-
MENT OF TREASURY

STATEMENT OF JOVITA CARRANZA
Ms. CARRANZA. Thank you, Chairwoman. Thank you.
Chairwoman VELÁZQUEZ. The mic is not on.
Ms. CARRANZA. It says green and talk.
Chairwoman VELÁZQUEZ. Okay. Maybe bring it closer to you.
Ms. CARRANZA. Can you hear me now?
Chairwoman VELÁZQUEZ. Okay, now. Right.
Ms. CARRANZA. Thank you, Chairwoman Velázquez, Ranking
Member Chabot, and members of the Committee for the invitation
to testify this morning. I am eager to update you on the progress

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that has been made by the agency in helping small business weath-
er the coronavirus pandemic.
Since March, the SBA has processed more loan volume than it
has in the entire 67-year history of the agency. As of this morning,
the PPP has approved nearly 5 million loans for over $518 billion
in much-needed fiscal relief to America’s small businesses.
We administered this first of its kind program with an eye to-
wards equity, recognizing that this pandemic has been particularly
harmful to socially and economically disadvantaged businesses.
We mobilized thousands of new lenders, including community
banks, credit unions, FinTech companies, farm credit lenders, and
hundreds of CDFIs and MDIs that specialize in providing liquidity
to underrepresented communities.
Through economic injury disaster loans and EIDL advances, the
agency has reached over 8 million small businesses, disbursing
nearly $170 billion in assistance. That amount is more than all
other disasters combined in the history of the agency. EIDL loans
are currently being processed in just 5 days with disbursements oc-
curring in just 2 days. These programs help the small business sec-
tor survive ‘‘once in a lifetime’’ disruption.
Since early June, I have made a concerted effort to personally
speak to businesses left reeling by this pandemic and to financial
institutions so that I can see for myself what is working and where
improvements need to be made.
One of the scores of business I visited was an African American
logistics management firm in Dallas. SBA loans provided him with
a bridge, a financial bridge over the most tumultuous waters he
has ever experienced. It helped him not only keep his employees
on the payroll, but also hire new workers who received comprehen-
sive skills training and professional certifications.
Many small business owners use that term ‘‘bridge’’ to describe
how SBA loans provided them with time and the space needed to
rethink, innovate, and to adapt their business models for success
in this new environment. One African American manufacturer in
Greensboro, North Carolina, told me that an SBA loan helped her
develop brand new lines of revenue online. SBA loans helped a
whiskey distiller in Travis City, Michigan, transition his manufac-
turing operation to hand sanitizer to meet both a social need and
financial gaps.
This pandemic has been an impetus for innovation in the small
business sector. But Chairwoman, it also has accelerated mod-
ernization at the SBA. For example, we have created an internal
oversite plan for each CARES Act program, and we have looked
long term at our management responsibilities for millions of busi-
nesses and disaster loans.
The agency has brought on thousands of staff to support our
COVID disaster operations while simultaneously servicing 175 nat-
ural disaster declarations.
We have significantly corrected the customer service experience
for EIDL applicants by accelerating processing of our loan queue,
helping them to better plan. Our dedicated SBA professionals have
been working hard to achieve this largely on telework status and
as a result we are more nimble, more responsive, and better pre-
pared for tomorrow.

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Before I conclude, I want to say a few words about the PPP data
disclosure made earlier this month. The data reflects information
about loans approved by lenders and entered into the SBA loan
system by those lenders.
It does not mean that SBA has determined that a borrower has
complied with program rules or is eligible to receive a loan and for-
giveness.
We are reviewing all loans. Moreover, we have provided the op-
portunity for business or lenders who believe that their reported in-
formation is inaccurate, to contact us, and we will work with them
to fix it.
At the same time, we should not lose sight of the fact that this
unprecedented program has emerged as one of the most successful
and consequential Federal economic response efforts in history.
That success is the result of a collaborative effort that includes the
White House, Treasury, SBA, the lending community, chambers of
commerce, and importantly, each, and every one of you.
I know that there is more work to be done and we all share the
same goal of helping small businesses across the country. I look
forward to working with this Committee and other members of
Congress. Thank you.
Chairwoman VELÁZQUEZ. Thank you, Administrator Carranza.
Secretary Mnuchin, you are now recognized for 5 minutes.
STATEMENT OF STEVEN MNUCHIN
Secretary MNUCHIN. Thank you very much.
Chairwoman Velázquez, Ranking Member Chabot, and members
of the Committee, I am pleased to join you today to discuss how
the Department of the Treasury and the SBA are working together
to provide relief to businesses and their workers through the PPP.
We remain committed to working together until every American
gets back to work as quickly as possible.
America’s economy continues to recover from the challenges
posed by COVID-19. For the second month in a row, the jobs report
vastly exceeded forecasts, with a record of nearly 5 million jobs.
This brings the 2-month gain to approximately 8 million jobs.
While the unemployment rate is still historically high, we are see-
ing additional signs and conditions of improvement. The Blue Chip
Report is forecasting that our GDP will grow by 18 percent in the
third quarter. The U.S. Chamber of Commerce reports that 79 per-
cent of small businesses are at least partially open, and half of the
remaining businesses will open soon. Retail sales rose by 18 per-
cent in May, and by 7.5 percent in June.
But let me point out, June was actually 1.1 percent higher than
June 2019. This is a result of all of our programs and working with
Congress.
Investors and businesses have historically high cash positions
and are beginning to put them back to work. We are in a strong
position to recover because the Trump Administration worked with
Congress to pass legislation on an overwhelmingly bipartisan basis
and provide liquidity to workers and markets in record time. In
particular, the PPP is keeping tens of millions of employees in their
jobs. Economic impact payments are also helping millions of fami-
lies. We are monitoring economic conditions closely. Certain indus-

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tries, such as construction, are recovering quickly, while retail and
travel are facing longer-term prospects. We are sensitive to the fact
that certain areas of the country are experiencing increased num-
bers of cases. The Task Force, working with state and local offi-
cials, is helping to ensure that people can work safely in this envi-
ronment. We look forward to continued conversations with this
Committee and other members of Congress to address these critical
issues.
Turning to the PPP, the SBA and Treasury worked together to
launch this in unprecedented time. We approved over 5 million
loans for $517 billion to support the employment of over 50 million
jobs. This is truly an extraordinary achievement, and we are
pleased that the loans were broadly distributed and made across
diverse areas of the economy, with 27 percent of the funds going
to low- and moderate-income communities, which is consistent with
the proportion of the percentage of the population.
As you might expect with a program of this magnitude, executed
on a national scale rapidly, we initially experienced some complica-
tions. We resolved them quickly. To implement the program, our
teams worked with members of Congress on a bipartisan basis to
issue rules and guidance to provide clarity. By standing up the pro-
gram quickly, we were able to support tens of millions of jobs.
We have worked closely with members of Congress in both par-
ties to pass three subsequent pieces of critical legislation. We also
reached a second round of funding for over $300 billion. I look for-
ward to these continued bipartisan efforts. A next phase of relief
should extend the PPP, but on a more targeted basis for smaller
companies and those that are especially hard hit, such as res-
taurants, hotels, and other travel and hospitality businesses.
The Treasury Department is implementing the CARES Act with
transparency and accountability. We have released a significant
amount of information on our website reporting on
USAspending.gov, and providing updates to Congress. We are co-
operating with various oversight bodies.
Regarding the PPP, Treasury and SBA regularly released data.
On programs, the Treasury and IRS have made data and informa-
tion regarding millions of economic impact payments available on
their websites and to the GAO. We are pleased that the Treasury,
working with the Federal Reserve, has announced to add to exist-
ing disclosure on the liquidity facilities by posting additional infor-
mation on the website.
Chairman Powell and I have had very productive discussions
with the members of the Congressional Oversight Commission. In
addition to the PPP, we had 160 million payments for the economic
impact payments. We have made massive amounts to support air
carriers. We have had $150 billion to the Coronavirus Relief Fund.
The Federal Reserve Facility is up and running. I am pleased to
announce that Main Street made its first loan for $12.3 million to
doctors’ offices consisting of 15 practices in Wisconsin. The lender
was Starion Bank, a family-owned $1.2 billion community bank.
There is a $50 million construction loan which will save over 3,000
jobs in the working.
I look forward to working with Congress next week on a bipar-
tisan basis to pass additional legislation.

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I would like to thank the members of this Committee for working
with us to help the American people, and I look forward to answer-
ing your questions.
Chairwoman VELÁZQUEZ. Thank you, Mr. Secretary.
I will begin by recognizing myself for 5 minutes.
Secretary Mnuchin, ethics rules were waived administratively in
the PPP, allowing friends of the Trump Administration to get ac-
cess without any further review. Meanwhile, there are thousands
of small businesses, many owned by women or minorities and lo-
cated in rural areas that were desperately seeking assistance. Were
you concerned about those optics?
Secretary MNUCHIN. Well, let me just say as it relates to cer-
tain loans as the administrator said, there will clearly be loans
that are reviewed for appropriateness. But let me just comment on
the conflict of interest rules.
I had very specific discussions with Senator Schumer and
McConnell on the conflicts rules, and it relates to the direct loans
from Treasury and the loans from the Federal Reserve. There were
very specific requirements and certifications that were required for
members of Congress and the administration.
As it relates to the SBA program, Congress could have included
those same requirements but decided not to do so, and indeed, the
SBA followed their standard provisions for the SBA. The SBA
Standards Conduct Commission determined that the PPP loans
should be governed by similar disaster programs and explicitly, and
again, this was a Committee that did not consist of political people,
explicitly decided to provide the same waivers that they have done
for other programs. So again, we look forward to working with
Oversight Committees to make sure that proper rules and regula-
tions were followed.
Chairwoman VELÁZQUEZ. Well, I welcome that, and we intend
to exert our responsibility and our constitutional duty to be at the
table. I am the first minority female chairing a committee, and
when we are discussing lending programs that are within the juris-
diction of this committee, I will demand for the Ranking Member
and myself to be at the table. I insisted that ethics rules should not
be waived. These are lending programs. If it is good for the 7(a)
and 504 and FDIC, it should be good for this type of lending and
I will insist on that when we sit down to discuss going forward.
I understand EIDLs were capped at $150,000 in an effort to
stretch the funding. However, I ask you, Administrator, the appro-
priators asked you, and the Senate asked you on numerous occa-
sions if you needed additional funding, and the answer was not.
Yet here we are. It is our small businesses that are suffering. Mov-
ing forward, you must work with us and I ask that you remove the
cap for new EIDL loans immediately and allow those with existing
loans to obtain the capital they deserve. You still have $200 billion
of loan-making authority left in the EIDL program while small
businesses are hurting. Help us help you because Members of this
committee and businesses who came to testify before this com-
mittee, they said that they might remain open but will not be able
to keep those businesses open because when they were thinking
that they were applying for the maximum allowable loans, then

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you reduced it to $150,000. We need to do better than that. This
is not going away and too many businesses are suffering.
Mr. Mnuchin, the pandemic has cost the rate of Black-owned
businesses to drop by an astonishing 41 percent and the rate for
Latino-owned businesses by 32 percent. These numbers are unac-
ceptable and are only going to get worse unless we act now and
meet reports. Should we not set aside a percentage of the remain-
ing funds for small businesses that need it most? I just heard you
saying that you are going to ask for hotels, restaurants, the trav-
eling industry. What about minority businesses?
Secretary MNUCHIN. I agree with you. There should be a set-
aside for small minority businesses.
Chairwoman VELÁZQUEZ. Thank you. Thank you.
Can I count on your support that we could set aside funding for
mission-based lenders? Because, you know, we are discussing here
the smaller of the small businesses who have no connection, who
have no preexisting banking relationships with those financial in-
stitutions. Those who have relationships are mission-based, like
CDFI, like MDI, like microlenders, and I hope that we could going
forward work with you on that issue.
My time has expired, and now I recognize Ranking Member
Steve Chabot.
Mr. CHABOT. Administrator Carranza, I will go to you first.
Given the overwhelming response to this emergency, is the SBA
prepared to respond to other disasters such as floods and hurri-
canes and fires? We know they are coming at some point. Are you
all prepared for that?
Ms. CARRANZA. Yes, Mr. Chabot. At this point we have about
three type of disaster declarations that are being submitted by the
governors. It is either economic disruption based on civil unrest or
it is natural disaster, and then, of course, the March declaration of
economic disaster. So, we are processing all three as we speak.
Mr. CHABOT. Very good. Thank you.
Secretary Mnuchin, I will move to you next.
Does the loan forgiveness process need to be simplified any
more? For example, I know there are some members of Congress
that have suggested perhaps even forgiving all the loans under
$150,000, for example. I am not saying we should or should not do
that, but I would love to hear your kind of thoughts about it. I have
heard a lot of concerns from folks out there about how complicated
the forgiveness process can be. If you could talk a little about that.
Secretary MNUCHIN. We look forward to working with this
Committee and the Senate Small Business Committee to simplify
the process. There were provisions in the existing act that made it
complicated. We tried to issue as much guidance as we could. I
know one of the things that we will talk about is should we just
have forgiveness for all the small loans? I think that is something
we should consider. We should obviously make sure there is some
fraud protection. But we look forward to working with this Com-
mittee and others.
Mr. CHABOT. Thank you.
As you know, at this point there is approximately $130 billion
that is still in the PPP program. So everyone is talking about, so
what do we do with that? You know, do we reduce the number of

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employees eligible from say 500 down to 100? Or do we stick with
what we have? Do we do a second PPP? And I know these are ne-
gotiations that everyone is having now, including the Administra-
tion, the House, the Senate, this Committee and others. What are
your current thoughts about that?
Secretary MNUCHIN. The administration supports using the ex-
isting money and topping it up with some additional money and
that will be discussed and allowing for a second payment to the
businesses that are especially hard hit. And Chairwoman, let me
just say, I was only giving examples of businesses. I did not mean
to in any way imply that those are the only businesses that are
hard hit. I think this time we need to have a revenue test and
make sure that money is going to businesses that have significant
revenue declines. That is something that Congress did not have in
the first provision, but make sure that the businesses that are es-
pecially hard hit, particularly small businesses, and put in certain
safeguards so some of the types of people we saw that took out
loans, and I look forward to working with Congress. If Congress
wants to put back in the conflict rules, we are more than happy
to work with Congress. The Administration supports, we will par-
ticipate on the same basis of the House and the Senate.
Mr. CHABOT. Secretary Mnuchin, also one of the things that
you all were operating under impossible time constraints. You
know, we passed this. I was at the signing ceremony on a Friday.
The next week the loans were literally going out the door, although
not that many, and it was not glitch-free. We all know that. But
you all got your act together pretty quickly and saved a whole lot
of businesses all across the country. And God bless you all for
doing that. And this Committee was involved in it and many others
as well.
I know one of the things that was frustrating, and again, I do
not want to be critical here, but it was frustrating. I heard this
from lenders. I heard this from small business folks. I heard it
from our staff. Was just the time it took to get the guidance out,
so people knew what the rules were, what we were all operating
under. Do you have any thoughts for the future as to what we
might be able to do with respect to that?
Secretary MNUCHIN. Sure. Let me say in one of the more ridic-
ulous statements I have ever made, I committed we get the pro-
gram up in 2 weeks. And working with the SBA and the staffs, we
were able to do that. Now, obviously, in doing that it ran into a
lot of issues, but we made the judgment it was more important to
get it up and running quickly, that sending money to people 4
months later was not going to help small businesses. Now that we
have it up and running, especially to the extent there are minor
changes to the PPP and the EIDL programs, working with the
SBA, we can get the guidance out very quickly. We will not have
the technology issues we had last time. And again, I would encour-
age this Committee to work in the context of these programs and
put more restraints.
The other thing I think you should consider on the EIDL is now
that we have Main Street open for loans above $250,000, that we
really do focus EIDL on loans that are $250,000 and below.

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Mr. CHABOT. Thank you very much. My time has expired,
Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
Now we recognize the gentlelady from Iowa, Ms. Finkenauer, for
5 minutes.
Ms. FINKENAUER. Thank you, Madam Chair. I appreciate you
holding this hearing.
So just for Secretary Mnuchin and Secretary Carranza, for you
guys to understand, the district that I represent is in Northeast
Iowa. It has three bigger city centers and the rest is pretty rural.
And our district has been hit very hard on a number of levels,
whether it has been the attacks on our agricultural community
over the last few years or now this pandemic and how it has af-
fected not just our cities but also our rural areas as well. And one
of the things I want to touch on, Secretary Mnuchin, I know you
brought this up, but I really want to dive into this, are those eco-
nomic impact payments. Those direct assistance payments that are
important for individuals who are worried about how are they
going to pay their mortgage, their rent, put food on the table, but
also for our local businesses as well who have been able to stay
open to have some sort of economic stimulus here during this pan-
demic.
And one of the things that I was really concerned about is when
these went out to folks, obviously, if they had a direct deposit set
up those went into their accounts, most of them. However, we
heard from 700 people within my district about these payments
who did not receive them or they received them but they were in
the debit cards and did not realize that they were these economic
impact payments. And so why was this set up the way that it was?
Why was there no real communication out to these districts, out to
folks who need it, to understand how these were coming out? And
then also, I know we wrote you a letter, actually, Secretary
Mnuchin, about the fees and reissuing these cards because so many
folks were throwing them away. I am glad you listened and decided
to waive that $7.50 charge for replacing, but why does it cost $17
to priority ship these cards to folks? Why do taxpayers who need
their money now have to wait longer and it cost the more? This is
just something again that needs to be dealt with, and I am glad
you fixed a piece of it, but what are we going to do down the road
when hopefully we issue more support to folks and actually have
that education, and why was this done in the first place?
Secretary MNUCHIN. Well, thank you for your comments. And
let me just say, the fact that there were 700 of those in your com-
munity is inexcusable. And if you have specific issues, we are
happy to follow up.
I would say the IRS and Fiscal Services did an extraordinary job
in sending out over 150 million payments, again, in a record period
of time. The debit cards you did point out something; we did not
realize that the debit cards were sent in unmarked envelopes. We
will correct that going forward. I do think the debit cards actually
was an interesting addition for two reasons. One, it allowed us to
get payments out quicker since we could only create so many
checks. And two, going forward, debit cards——

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Ms. FINKENAUER. I am sorry. I am sorry, Secretary Mnuchin,
how long did we have to wait to put those out because the Presi-
dent decided to have his name on those checks or on the paperwork
that went out with those? How long——
Secretary MNUCHIN. I can assure you there was zero delay as-
sociated with either one of those issues. It had no impact on the
timing. We were limited in the number of checks we could print per
week but that had no impact on it.
And I think the fees were waived. If the fees were not waived
and you have constituents that still have issues, again, I am happy
to follow up on that.
Ms. FINKENAUER. Yeah. The fee of $7.50 to replace was
waived, but then there is the $17 that it cost for the priority ship-
ping of the cards.
Secretary MNUCHIN. You let me know and we will follow up.
That should be waived as well.
Ms. FINKENAUER. Thank you.
And then I also have a question about the PPP program. Obvi-
ously, this has been incredibly important all over the country and
in districts like mine, but I have to be honest; I was really dis-
appointed at the beginning when this rolled out. I mean, we allo-
cate these dollars, and then they go to these agencies. So they go
to SBA, they go to Treasury to set up how these are doled out. And
communities like mine, quite frankly, were left behind because we
have the highest concentration of community-based financial insti-
tutions in the entire country within my district. And so the first
batch essentially went to big banks and people who were connected
with their banks and left out communities like mine. Did either of
you think about how this would impact our folks who lend with
community-based financial institutions? Why was this done the
way that it was at the very beginning? I know we have that set
aside now for those dollars, but how can we ensure that as we con-
tinue to look at this, that we are doing what we should here with
these agencies to make sure we do not forget about rural areas.
I mean, on the SBA, I understand as well that we lost the head
of Rural Affairs. Actually, she got moved. I know we are, you know,
short on staffing to deal with this but it is not the time to move
somebody that represents rural areas and then——
Chairwoman VELÁZQUEZ. Time has expired.
If you wish to answer the question, sir.
Secretary MNUCHIN. I can assure you we are very focused in
making sure that the community banks and the CDFIs have equal
access. And you are correct. Unfortunately, there were issues in the
beginning. We corrected it very quickly.
Chairwoman VELÁZQUEZ. Thank you.
The gentleman from Ohio, Mr. Balderson, is recognized for 5
minutes.
Mr. BALDERSON. Thank you, Madam Chair. Thank you both
for being here today.
My first question is for the administrator. Thank you again for
being here today, administrator. I greatly appreciate your leader-
ship through this pandemic. I would also like to convey to you that
your local office in my district, Columbus, Ohio, SBA, has been a
phenomenal partner and resource for me. We have been doing a

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Back to Business tour for the last 3 weeks. Everett Woodel from
your office has been with me along the way and his team, and we
are very grateful to see the business owners that encounter the
SBA while we are there and to put a face with the name is very
pleasing for them as well. So thank you.
An issue that I have heard more and more from my constituents
is the lack of clarity on PPP forgiveness. Specifically, I hear this
often from business owners looking to have their businesses bought
out. This could be because of the pandemic or a planned sale prior
to COVID-19 that has been placed on hold because of the virus.
In this situation, the business owner took PPP in order to sup-
port their employees and now they cannot sell their business with
this forgivable loan on the books. Why is this?
Ms. CARRANZA. Thank you, Congressman.
This is a situation that I would have to speak with you person-
ally or address the particular case because this is news to me about
them taking a PPP and then wanting to sell. It is not a new inci-
dent where small businesses that are ready to sell because they do
not care to go through another pandemic or another crisis. They
are in a position and interested in selling their company but the
PPP or the EIDL loan issue was not raised when we had those dis-
cussions. But I have experience similar to you that there are busi-
nesses that are ready to sell. But I would have to look into it, and
I will confer with the Treasury, on how to manage that situation
and the forgiveness. We have not addressed that at this point, an
entity wanting to sell their firm and they have a loan.
Mr. BALDERSON. We will work with you on that.
Ms. CARRANZA. Yes.
Mr. BALDERSON. And the business, for example, that I have
been in communication with, they were doing an exchange in Janu-
ary before the pandemic hit. So most of them that I have been in
contact with have been having this issue before the pandemic even
started. So we will work with your office and address that. Thank
you very much.
Ms. CARRANZA. Look forward to it.
Mr. BALDERSON. Mr. Mnuchin, thank you. My next question is
for you.
I have introduced legislation with my colleague from across the
aisle, Congresswoman Brenda Lawrence, that would provide a tax
credit for small businesses to purchase and install PPE and related
safety equipment. This legislation would help small businesses that
are suffering financially under the weight of mandatory closures,
be able to afford the personal protective equipment required to re-
open their doors. Are you open to working with myself and Ms.
Lawrence to ensure small businesses are safely prepared to wel-
come customers again?
Secretary MNUCHIN. Yes, absolutely. And I am not familiar
with this specific legislation, but I like the concept a lot.
Mr. BALDERSON. I appreciate it. It is up to $25,000 tax credit,
so thank you. I look forward to that.
Administrator, back to you. If a business owner decides to use
personal finances, monies that is not associated with their business
to pay off their PPP loan in order to move forward with the sale

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of the business, they just have to eat this as a loss? And again, that
may be something that you and I may need to sit and discuss.
Ms. CARRANZA. Yes. I agree. I need to understand all the nu-
ances to that particular situation.
Mr. BALDERSON. Understand.
Ms. CARRANZA. And perhaps there are other businesses that
may be facing the same thing that we need to look into.
Mr. BALDERSON. Thank you very much.
Ms. CARRANZA. You are welcome.
Mr. BALDERSON. Mr. Secretary, my last question is for you. I
greatly appreciate your leadership. It has been fascinating to watch
you.
As we look towards the next aid package, much of the focus
seems to be on providing aid to schools, hospitals, and first re-
sponders. I support these efforts but also believe we must continue
consideration of America’s economic engine, small business and I
know that Madam Chair and Ranking Member Chabot have both
talked about this. What types of considerations for small busi-
nesses and workforce development efforts are also being consid-
ered?
I did not leave you much time, Mr. Secretary.
Secretary MNUCHIN. Various items, but again, I think that is
something that should be considered, and we look forward to work-
ing with you.
Mr. BALDERSON. Thank you, sir.
Madam Chair, I yield back my remaining time.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Maine, Mr. Golden, for 5
minutes.
Mr. GOLDEN. Thank you, Madam Chair.
Secretary Mnuchin, I have a question that I would like to raise
with you, but first I just want to point out, as you were talking in
your opening statement about extending the PPP program but per-
haps trying to target the assistance to businesses that need that
help the most, as well as maybe learning from some of the lessons
along the way. As we work on the PPP program together, I want
to encourage you to look at the Restart Act introduced in the Sen-
ate by Senators Bennett and Young, and here in the House by my-
self. This bill builds upon the PPP program. It models itself after
that, but I think importantly, it has some provisions in there that
would target the aid to businesses that can demonstrate that they
have, in fact, suffered revenue losses over the past several months
related to coronavirus and the economic impact.
I do not know if you are familiar with the Restart Act, but I
would encourage you to give it a look as you are looking to improve
upon whatever it is that we do next to assist businesses here in
the United States as we shift into a recovery phase.
Secretary MNUCHIN. I am familiar with it, and I think parts of
it should be incorporated.
Mr. GOLDEN. Thank you for that. And I look forward to work-
ing with you and with the senators and House members on some-
thing similar to PPP and the program proposed in Restart.

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I wanted to raise an issue with you on behalf of critical access
care hospitals, including some in my district. Are you familiar with
critical access hospitals?
Secretary MNUCHIN. A little bit.
Mr. GOLDEN. You know, federally defined as providing impor-
tant healthcare access in rural areas, in rural communities. These
are hospitals that are going to operate under very thin margins
and struggle financially, but it is important the Federal govern-
ment recognizes how important they are to access to care. In addi-
tion to access to health care, they are often the largest employers
in a rural region and therefore are just critically important.
Your department has I think rightly looked at organizations ap-
plying for PPP who are forgoing, you know, undergoing bankruptcy
as ineligible. I understand why you would do that under normal
circumstances but there are a number of critical care hospitals in
the Nation who are undergoing chapter 11 restructurings. And
given the fact that we are dealing with a pandemic and a recession
and that these hospitals have a very unique, Federally-recognized
mission, and are providing important access to health care in areas
where it is going to be hard even in good times to be making
money. These are really like nonprofit hospital organizations.
I was wondering if you would consider reconsidering eligibility
for critical care hospitals undergoing chapter 11 restructurings for
the remaining PPP funding that you have. To date they have been
excluded and you can imagine during this pandemic and the reces-
sion, the fact that they could not do certain types of services that
they normally would be doing, they are really struggling and sev-
eral of them are at risk of closing which would be a terrible loss
for these communities.
Secretary MNUCHIN. I am very sympathetic to those types of
hospitals and we look forward to working with you and considering
that.
Mr. GOLDEN. Well, I appreciate that very much. As you know,
the Treasury and SBA have been able to make some changes in the
program for eligibility for organizations to include some nonprofit
hospitals that are tax exempt under Section 115 and hospitals
owned by state or local government as well as others. But I think,
you know, those jobs are obviously very important in rural commu-
nities, but even more important is ensuring the access to CARES
is preserved. And they have been applying for PPP. They were re-
jected. In some instances, some of these hospitals have gone to
courts who essentially have said that the determinations made by
the Treasury and SBA would have to be changed or Congress
would have to act. So I do not know if you think that you need
some kind of legislative action or if you think that you have the
authority you do to look at this and make that change yourself. But
I want to thank you for working with both my office but also Sen-
ator King and Senator Collins from Maine, and I am sure other
senators who represent similar hospitals in similar situations are
eager to work with you to try and help these hospitals.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
Now we recognize the gentleman from Oklahoma, Mr. Hern.
Mr. HERN. Thank you, Madam Chair, Ranking Member Chabot.

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Mr. Secretary, Administrator, thank you both for being here in
person for this. This is unprecedented times.
Mr. Secretary, our office has dealt with many people who have
waited weeks and weeks for their unemployment checks to get ap-
proved at the state level. Hundreds of thousands across the country
I am sure.
As you may remember, we discussed this on a phone call over 4
months ago where we noted that under the current capacity, states
were ill-equipped to handle the influx of unemployment applica-
tions. To combat this problem and to keep hardworking Americans
employed, Congress worked in a bipartisan way, unprecedented ac-
tually in today’s times, to establish the Paycheck Protection Pro-
gram. And while I believe this program could have been expanded
and more could have been done to help the 40 million Americans
who are currently unemployed, this program has successfully saved
51 million jobs in America, which was designed so that when we
come out of this pandemic that we can quickly stand up the econ-
omy which is what we have been seeing happen in May and June
and continue to see that happen now.
You have stated many times that the priority of the PPP was to
predominantly preserve and save jobs and employees rather than
the business owners themselves. Would you still agree with that
statement?
Secretary MNUCHIN. Yes.
Mr. HERN. Additionally, could you discuss what you have
learned from this or strategies that the Federal government can
implement in the future to better prepared for this next situation
or the situation in the future?
Secretary MNUCHIN. Well, let me just comment on one of the
things that we liked about the PPP was all the money we were
spending on the employment side of this was money we saved on
unemployment. I think one of the issues we have learned and we
have to fix in the next legislation is the technical issue wherein
certain cases states with the top up were paying people more not
to work than to work. And as you said, some of the states were bet-
ter prepared; some of the states have 40-year-old computers.
I also want to just say one thing. I know a lot of people use this
40 million people unemployed. Fortunately, it is not 40 million un-
employed. People thought we would get to that, but fortunately,
right now we only have 18 million unemployed, and we have about
14 million more than where we started this. And we have got to
get those people back to work. But thank you.
Mr. HERN. Thank you.
Further, my casework team has worked with hundreds of people
who have had difficulties receiving their stimulus check. And I
know you are aware of this. We have talked to your offices. Can
you briefly explain, very briefly, what we have seen happen and
why? Is there a big issue here or are all these one-offs?
Secretary MNUCHIN. I mean, let me just say, all these one-offs,
I am sympathetic because these are real people who want their
checks. So I do not mean to in any way minimize this. But again,
we sent out over 150 million checks in record time and yes, there
were certain cases, because they were either done off of previous

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tax returns or other information that we got and that is unaccept-
able, but we will work with you on it.
Mr. HERN. Thank you.
Administrator Carranza, 2 weeks ago, Associate Administrator
Rivera testified before the Committee regarding the EIDL program.
And during my conversation with the administrator, he committed
to providing this Committee with a document outlining some best
practices by the end of the third quarter, September 30, 2020. This
will be a document to explain what the SBA has learned and how
you all believe you could be prepared in the future should another
pandemic arise.
Just as a side note in that, the administrator stated he had been
here since 9/11. He had been through 9/11, the financial crisis, and
you know, we keep reinventing the wheel. And it seems with all
of us engaged in this in a very bipartisan way that we could put
a pandemic playbook in place so that we could learn from our mis-
takes and not repeat them again. Because when we make mistakes,
people are harmed. Or at least not given stimulus when they need
it. So if we could learn from those mistakes and do better that
would be great. And I think that would be a way to do it, in a non-
political way that we could put these on the shelf.
One of the key components to this document will be to design a
communication plan for future pandemics which would greatly help
all of us work together.
Would you commit to seeing that get done by the end of the third
quarter?
Ms. CARRANZA. Yes, Congressman. We have already begun. We
have prepared the first deck on how we are addressing fraud. We
have also staffed up. I started with two additional executives,
SESs, in ODA, so we are going to reinforce the leadership in ODA
for future situations and in preparation for the end of the year.
So, definitely, you will have a full SOP on lessons learned.
Mr. HERN. And as businesspeople, and many are in this room.
I have been in business 35 years. You know, we can talk about
what happened but that does not really solve a problem. So if we
can indel in a document what those issues were so that we can not
make those again, we will make new ones, and that is human na-
ture. But if we can get that done that would be great for us.
Madam Chair, Ranking Member, I think you for allowing us to
have this meeting, and it is very important. And thank both of you
for being here, for what you have done in these unprecedented
times.
Ms. CARRANZA. I look forward to continuing to work with you.
Thank you.
Mr. HERN. Thanks.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
Now we recognize the gentleman from New Jersey, Mr. Kim, for
5 minutes.
Mr. KIM. Thank you, Chairwoman, for convening this hearing.
Thank you to the witnesses for showing up.
Secretary Mnuchin, I wanted to start with you. You rightfully
noted in your testimony that small businesses are continuing in the
face, a dire circumstance right now. Even those that have received
Paycheck Protection Program loans are telling me that they are un-

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sure whether or not they are going to be able to survive. And there
are a lot of concerns about just the bigger state of our economy and
whether or not our economy is going to be able to pursue through
these coming months, and if not, is that going to have a negative
impact on our small businesses?
In my home state in New Jersey, we have gone through a really
tough time over the last couple of months and we face a tough chal-
lenge up ahead when it comes to our state economy. It has been
crippled. We have dramatically hampered our recovery, especially
for small businesses. And these are not just about COVID-related
expenses. It is about loss of revenue that could very well create
widespread layoffs, decrease consumer spending, weaken our in-
vestment in our communities.
Secretary, I wanted to ask you if you would commit to working
with Congress to ensure that we have the necessary funding to our
states and local municipalities to solve the crisis that we face and
create a strong economic recovery.
Secretary MNUCHIN. Well, I think as you know, we allocated
significant amounts of money to COVID-related expenses. We have
tried to issue guidance to be very clear that money can be used for
law enforcement, first responders, and others. I think the issue of
lost revenues is a much more complicated issue and the issue of
taxing authorities between the state and the Federal government.
But we will be working with Congress on this.
Mr. KIM. I raise this because, you know, I have heard you talk
about before what could potentially come next with state and local
funding on this. And I think it is really important and central to
this discussion that we are going to be having over the coming
weeks about this. When I have heard you talk about it before you
have purposefully described this money as bailouts for some states.
And so I just wanted to hear from you a little bit more on that
front. I believe that for you, perhaps you do not want to see this
funding going to states that you characterize as mismanaging
funds be fair, that it would not be fair to other states that are
working hard on their economy and their budget, so why have
them cover for other states? Is that sort of a correct interpretation
of your assessment?
Secretary MNUCHIN. What I have said and I agree with this,
if there were financial conditions that states had coming into this,
it is not the Federal government’s role to bail them out of that.
Now, we have through Main Street—excuse me, through the Fed
facilities, we have provided lending facilities to the states and mu-
nicipalities. But the issue of taxing authority, the Federal govern-
ment has taxing authority and the states have taxing authority. So
where there are lost revenues, I think there is a fairness issue of
how those get allocated across the country.
Mr. KIM. Well, I agree with you that there is a fairness issue
here at stake. And in New Jersey, our state only gets back some-
where around 75 cents to 81 cents for every dollar that we put into
the Federal government. It is one of the lowest in the Nation.
Other states get back well over $1. Some $2. Kentucky gets back
abut $2.35 last I saw. So I guess I would ask you, is that fair? Is
that fair to the residents of New Jersey?

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Secretary MNUCHIN. Let me just say, I have lived in New York
and California, and both New York and California cite those num-
bers as well. I do not believe that that is an appropriate number
because the answer is more rich people live in those states. And
because of the way we have taxes and the rich people are the ones
who pay the preponderance of Federal taxes. I do not believe the
calculation as a result is the right way to look at things.
Mr. KIM. Okay, well, that is helpful for me to understand how
you are approaching this problem, and I want to continue to work
with you on that because from my standpoint, if New Jersey is
often calculating that we give in to the Federal government about
$20 billion more than what we get back every year, I think there
is an issue of fairness here. And I really do not want us in the mid-
dle of a pandemic to get to a situation where we are trying to pit
states against each other. We saw that with personal protective
equipment, and now with funding, I think there is a chance for us
to really come together here and try to think about this, especially
when we know that current and former Fed chairs all have said
and reportedly warned that economic recovery could be hampered
if we do not appropriate more aid to state and localities.
Just switching gears here at the very end, Administrator
Carranza, I understand that the Economic Injury Disaster Loans
were capped at $150,000 to ensure all borrowers could access the
funds. However, this policy shortchanged many businesses. So I
wanted to ask you, moving forward, will you commit to removing
this cap for new EIDLs and to allow the existing loans to obtain
more funding in phrase two?
Ms. CARRANZA. Congressman, what our experience is currently
is that the average loan has dropped from 63,000 to 57,000 down
to about 43,000 since we have opened in June—July, excuse me.
And so, at this point, the operating expense that people apply for
are not hitting the cap in great numbers. About 1 percent of the
applicants are pursuing that amount. Eighty percent of the loans
that we have processed come in significantly under the $150,000.
But I will continue assessing it. We are reviewing that on a daily
basis, Congressman, so I look forward to working with your office.
Mr. KIM. Thank you.
Chairwoman VELÁZQUEZ. Would you yield?
Mr. KIM. I will.
Ms. CARRANZA. Thank you.
Chairwoman VELÁZQUEZ. We are out of time. I expect for you
to lift that cap, especially when there are other states that are fac-
ing the pandemic now. You cannot predict if any business from
those states will need more than $150,000, so the fact that now,
from those other states you are not getting those type of applica-
tions or that type of amount does not mean that that will apply to
every order. Businesses should have the opportunity to be able to
apply for over $150,000 if that is what they need.
Ms. CARRANZA. Congresswoman, at this time, since we opened
the portal, we have an additional 5 million applications. We have
probably about 15 to 20 days remaining with the remaining funds.
So, if I keep that level of $150,000, I will be able to serve 5 more
million small businesses.

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Chairwoman VELÁZQUEZ. Sure. From the beginning, appropri-
ators, myself included, Senator Cardin and some other senators
asked you if you needed more than what we included in the bill
and you said yes. Come to us. Tell us when we ask if that is
enough.
Ms. CARRANZA. Yes. I will work with your office.
Chairwoman VELÁZQUEZ. Thank you.
Now we recognize the gentleman from Minnesota—who is——
Mr. STAUBER. Thank you.
Chairwoman VELÁZQUEZ.—Mr. Stauber.
Mr. STAUBER. Thank you, Chair Velázquez——
Chairwoman VELÁZQUEZ. Yes, Mr. Stauber.
Mr. STAUBER.—and Ranking Member Chabot. I also want to
thank the two witnesses for being here today.
So, Secretary Carranza, this kind of follows what the Chair-
woman just talked about. I would first like to share with you some
concerns that I have heard from my constituents. And it seems
that the SBA has taken some liberties to reduce the cap of loans
given out from the 2 million to 150,000. While this is likely to en-
sure the maximum number of businesses receive some sort of fund-
ing during this crisis, my constituents are rightfully upset. They
feel that they are being cheated out of what they were promised
by their government.
I heard from your colleague Mr. Rivera on this issue a couple of
weeks ago. But I wanted to give you the opportunity to respond
today.
Ms. CARRANZA. Yes, Congressman. I also receive emails where
their calculation on operating expenses may have not reached the
150,000, and we have taken those under special reconsideration
and looked at ways where we could increase that amount.
Secondly, to exceed the 150,000 at this given time would be pre-
mature because we have 5 million applications currently. As I stat-
ed to the chairwoman, if there are needs for funds, then we will
bring that up for discussion.
What we do with the applicants that need more funds is we
counsel them that there is the PPP program, that is a forgiveness
loan and we provide technical assistance. We don’t influence nor do
we recommend. We just share that there is also another option that
they can consider.
We don’t take lightly the fact that businesses need funds. It is
an emergency lifeline that we initially thought it was going to—
this pandemic was going to be 2 weeks and now it is a couple of
months. And so, we recognize the fact that they need greater funds.
Mr. STAUBER. Thank you——
Ms. CARRANZA. You are welcome.
Mr. STAUBER.—Madam Secretary. You know, as I have said be-
fore, the SBA and the Treasury were given a nearly impossible
task. And while there have been some bumps in the road, we ap-
preciate the work that you, Secretary Carranza and Secretary
Mnuchin, and your respective teams, have put into helping the
small businesses across this Nation during this pandemic.
My last question will go to Secretary Mnuchin. You know, shift-
ing gears a little bit, I have been hearing from local grocery stores
and convenient stores of the coin shortage. What are your thoughts

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for addressing this issue and have you considered some type of
public messaging or political PR campaign to help jump-start the
coin circulation across the Nation? Secretary Mnuchin.
Secretary MNUCHIN. Thank you. We are working very closely
with the Mint and the Federal Reserve on the coin shortage, and
the Mint is working overtime. As you said, as a result of COVID,
a lot of the coinage is stuck, but we will—we are working on a pub-
lic messaging and we will get updates to your office.
Mr. STAUBER. Thank you, Mr. Secretary. I would say this Com-
mittee would be happy to help you in that public relations cam-
paign.
And with that, Madam Chair, I yield back. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back. Now we
recognize the gentleman from Colorado, Mr. Crow.
Mr. CROW. Thank you, Madam Chair. And thank you, Adminis-
trator Carranza and Secretary Mnuchin, for joining us today.
Administrator Carranza, on July 6th, the SBA sent to Congress
a list of the loans distributed by congressional district. And they
sent to my office a list showing 317 small businesses within my dis-
trict received loans over 150,000, and over 3,600 received loans less
than that. I knew that wasn’t right given the number of small busi-
nesses in my district, so we conducted our own analysis and deter-
mined that there were actually over 1,400 businesses in my district
that received loans over 150,000 and over 10,000 that received
them under 150,000. So, that data was way off. What are you doing
to fix it?
Ms. CARRANZA. I would like to visit with you and address those
particular statistics. It would be premature to comment on these
particular data points that I am not familiar with at this point, so
I look forward to working with you.
Mr. CROW. So, you will commit to work with me and every other
Member of Congress to——
Ms. CARRANZA. Absolutely.
Mr. CROW.—make sure that data is correct?
Ms. CARRANZA. The entire Committee, yes.
Mr. CROW. Okay. And, Secretary Carranza, I was very pleased
to hear from—I am sorry, Administrator Carranza, I was very
pleased to hear from Secretary Mnuchin that he would commit to
work with us to look at how to get that 100 billion-plus PPP money
that is still available to members of the Black and Brown commu-
nity and to women-owned businesses and others especially hard-
hit. Do you share that commitment and will you commit now to
work with us to develop a program to give money to those busi-
nesses?
Ms. CARRANZA. Yes, I do. We have been working in concert
with Treasury. We have worked together on the CDFIs, the credit
unions, the savings and loans, the fintech organizations. Many of
the community banks are the ones that are very specialized in pro-
viding funds to these particular underserved communities, so we
are working in tandem. Definitely I agree with——
Mr. CROW. Thank you.
Ms. CARRANZA.—Secretary Mnuchin.
Mr. CROW. I appreciate that.
Ms. CARRANZA. Thank you.

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Mr. CROW. I appreciate that commitment, Administrator.
Secretary Mnuchin, to you. You have had a long career in invest-
ment banking and banking, correct?
Secretary MNUCHIN. I haven’t been in investment banking in
close to 18 years, but I have been in banking.
Mr. CROW. In banking. And when you were in banking you ad-
vised your banks on where to send money and to whom to give
loans and funds to, correct?
Secretary MNUCHIN. No, I didn’t. I had a regional-based bank.
I didn’t advise where to give money. I served on a loan committee,
but we gave——
Mr. CROW. Your banks would make decisions, though——
Secretary MNUCHIN.—across the board in the community.
Mr. CROW.—where to send money, whom to give loans to, cor-
rect?
Secretary MNUCHIN. I am sorry, I couldn’t hear you. Could you
repeat that, please?
Mr. CROW. Your banks would make decisions to where to send
money and to give loans to, correct?
Secretary MNUCHIN. Well, customers—again, customers applied
for loans and the bank made credit decisions.
Chairwoman VELÁZQUEZ. Mr. Crow, we cannot hear you.
Mr. CROW.—closure requirements as to whether or not an em-
ployee of that bank, a family member of you or one of your employ-
ees, or a close business relationship was one of the recipients of
that money, correct? There are disclosure requirements in the fi-
nancial industry?
Secretary MNUCHIN. There are disclosure requirements. There
are also requirements by the FDIC and the OCC that we would fol-
low.
Mr. CROW. And what are the purpose, in 20 seconds, what are
the purpose of those disclosure requirements?
Secretary MNUCHIN. Well, the real focus is the conflict of inter-
est. And to the extent there is a conflict of interest, in many cases
it has to go to the board of directors to be approved. So, it is more
focused on conflict of interest than disclosure.
Mr. CROW. But you need to have that disclosure in order to do
that analysis, correct?
Secretary MNUCHIN. Again, most banks do not publicly dis-
close——
Mr. CROW. No, Secretary Mnuchin, you have to have the disclo-
sure of that information in order to do the analysis on conflicts of
interest, correct?
Secretary MNUCHIN. Disclosure within the bank, yes, that is
correct.
Mr. CROW. Okay. So, by that same rationale, is it important
that members of the Trump family, associates of the Trump organi-
zation, or employees of the administration disclose their interest in
entities that are receiving PPP money so you can conduct that con-
flict of interest analysis?
Secretary MNUCHIN. Again, let me repeat, and I repeated this
before, as it relates to——

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Mr. CROW. No, Secretary Mnuchin, I asked you a very specific
question. Do you believe that disclosure is necessary in the context
of the administration?
Secretary MNUCHIN. Again, I don’t believe that because, again,
this was not an issue that was required by Congress. This was a
very specific issue and there were no restrictions.
Now, I am not aware if they took loans or they didn’t. But let
me be clear, there was no restrictions on the PPP. There were re-
strictions for the administration and Congress, same terms, on the
other official——
Mr. CROW. Well, I won’t take it——
Secretary MNUCHIN. And I believe——
Mr. CROW.—as a no then.
Secretary MNUCHIN.—the Trump administration——
Mr. CROW. It is don’t believe——
Secretary MNUCHIN.—should be held to the same standard as
Congress on the PPP. So, there——
Mr. CROW. But they should not be held to the same standards
that your banks and financial industry was held to during your ca-
reer?
Secretary MNUCHIN. Again, I think you are misrepresenting my
comments on, again, conflict of interest versus disclosure.
Mr. CROW. I think I was very clear. My time is out. I yield back,
Chairwoman. Thank you.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired, so
how we recognize the gentleman from Tennessee, Mr. Burchett. Is
he here?
Mr. BURCHETT. Yes, ma’am. Yes, ma’am. Can you hear me——
Chairwoman VELÁZQUEZ. Yes.
Mr. BURCHETT.—Chairlady?
Chairwoman VELÁZQUEZ. Yes, I can hear you.
Mr. BURCHETT. Thank you. I am sure my melodious voice car-
ries well over the internet. Hey, let us see, thank you all for letting
me be here, Chairlady and Ranking Member.
Administrator Carranza, and I might have missed this earlier, I
have had some technical difficulties, having trouble hearing what
people are saying, so if I have done this, you just give me the brief
answer, that would be great. As of last Friday, the SBA still does
not have a portal of a process for accepting loan forgiveness appli-
cations. Why is this? And what can we do to speed this portal and
process up?
Ms. CARRANZA. The forgiveness portal or the application or
guidance will be out very shortly. We are resolving some of the lan-
guage between Treasury and SBA, but it is going to be available
very, very soon.
Mr. BURCHETT. When do you think that would be? I know gov-
ernment very soon is like a glacier and I am in Tennessee and peo-
ple——
Ms. CARRANZA. Well, I haven’t been allowed that luxury lately,
not under this pandemic. So, you can trust that we will work it as
expeditiously as we can. We are trying to make it right the first
time and address all the issues that have been raised by not only
the lenders, but the borrowers, as well.
So, if I can tell you within a——

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Mr. BURCHETT. Okay.
Ms. CARRANZA. If I can tell you by August, that will be a target
date.
Mr. BURCHETT. Of 2020?
Ms. CARRANZA. Yes, sir. Yes, sir.
Mr. BURCHETT. Okay. Yes, ma’am. I had to get that clear since
we are——
Ms. CARRANZA. Yeah, thank you.
Mr. BURCHETT. Yes, ma’am. Secretary Mnuchin, in your opin-
ion, how should we in Congress utilize the remaining 103 billion
in the PPP funding?
Secretary MNUCHIN. My suggestion is that Congress would re-
authorize the program to allow for a second check, a second pay-
ment to the businesses that are most hard-hit.
Mr. BURCHETT. And which would those be, in your opinion?
Secretary MNUCHIN. I think we should use a revenue test. So,
as opposed to I don’t think any specific industry should be targeted.
I think that——
Mr. BURCHETT. Okay.
Secretary MNUCHIN.—we should use a revenue test and some-
thing significant.
Mr. BURCHETT. I caught part of that earlier, but it cut out.
Also, Secretary Mnuchin, do you believe the Nation’s smallest
businesses, those with 10 or less, received the assistance they need-
ed to survive this emergency?
Secretary MNUCHIN. Many of them did. I am sure there were
some that fell through the cracks, but we are very proud of the ma-
jority of the loans went to very small businesses.
Mr. BURCHETT. Okay. And, Ms. Carranza, what measures are
in place in the SBA to reduce the waste and fraud and abuse in
the EIDL and the PPP?
Ms. CARRANZA. We have developed an infrastructure that is
overseen by our CFO and we have contracted a vendor, as well, so
that we can have institutional knowledge as it relates to experience
in the lending sector. So, we have a very comprehensive approach
to oversight not only for the PPP, with the EIDL, but ongoing au-
dits of the CARES Act implementation at SBA in total.
Mr. BURCHETT. Okay. Do we have a flowchart or something
that we could have just to talk to—when we talk to our folks and
our local media about that——
Ms. CARRANZA. Yes.
Mr. BURCHETT.—when we get inquiries?
Ms. CARRANZA. Yes, I have no hesitation reviewing what our
deck looks like or strategy appears with the Committee. I look for-
ward to review that.
Mr. BURCHETT. Yes, ma’am. If you could——
Ms. CARRANZA. Not a problem.
Mr. BURCHETT. If you could get that to the Committee, I would
be very grateful.
Ms. CARRANZA. Will do, this year.
Mr. BURCHETT. Yes, ma’am. This year, yes, ma’am, by August.
Noting that August is my birthday month, so that would be great.
Ms. CARRANZA. Okay.

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Mr. BURCHETT. Okay. Thank you, Chairlady. It is always good
to see you——
Ms. CARRANZA. You are welcome.
Mr. BURCHETT.—even on the camera.
Ms. CARRANZA. Likewise. Thank you.
Chairwoman VELÁZQUEZ. Thank you.
Mr. BURCHETT. Yes, ma’am. And I yield the rest of my time.
Chairwoman VELÁZQUEZ. The gentleman yields back. Now we
recognize the gentlelady from Kansas, Ms. Davis.
Ms. DAVIDS. Good afternoon, everyone. Thank you, Chairwoman
Velázquez and Ranking Member Chabot, for holding this very im-
portant hearing today.
Secretary Mnuchin and Administrator Carranza, I appreciate the
both of you appearing before this Committee to answer our ques-
tions and discuss the way forward in supporting our small busi-
nesses through this unprecedented crisis.
You know, we enacted the Paycheck Protection Program to en-
sure that our country’s small businesses can keep their employees
on payroll and keep businesses afloat during the crisis. And I know
many small businesses in my home state of Kansas, especially the
minority-owned ones, struggled to access the program during what
was a critical time. And, at the same time, we saw well-connected
and even publicly traded companies getting these loans with little
to no problems, and were even borrowing when they had already
borrowed from their own executives.
And I believe Kansans need to know that their tax dollars are
not being used to pay back high-dollar salaries of executives. And
that is why I have been working alongside my colleagues on this
Committee to push for accountability and transparency that the
public deserves. In fact, I introduced the PPP Accountability Act,
which would ensure that both Congress and the public are able to
see the information about the loan recipients for themselves. And
I appreciate that you listened to some of these concerns and have
made some of the initial data public.
And, you know, from this information, we know that in the Kan-
sas Third, close to 100,000 jobs were retained and preserved. And
we also know that there is a lot of information. We have heard
about it from some of my colleagues today, a lot of information that
we still don’t know, like what loan forgiveness rates will look like,
the rate at which minority businesses have received loans. And this
information is essential to our Congress to provide the oversight
that we are constitutionally mandated to provide.
So, I think I will start with, Secretary Mnuchin and Adminis-
trator Carranza, can you tell us what your plans are for releasing
the data of the recipients for the loan forgiveness portion here?
Secretary MNUCHIN. Well, let me first say I agree with your
comment on the public companies and you know there was about
$30 billion of it returned. And as the administrator has said, we
are going to have a very robust process to review loans before loans
are forgiven.
And, yes, in the forgiveness process people will be required to
provide much more data and that data will be released.
Ms. DAVIDS. Well, so can we—I know you had mentioned earlier
and it was highlighted a couple of times that there is definitely a

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commitment to making sure that minority-owned, women-owned
businesses, and some of the most marginalized or disadvantaged
small businesses out there should be getting access to these loans
at the same rate as everyone else. And, you know, some of the
fields included in the data are optional.
And when we talk about how many jobs are saved through loans
and demographic information about the ownership of the business
being optional, I am curious what your plans are to evaluate the
effectiveness and reach of the program without this information.
And I appreciate the commitment that you have to making sure
that some of the most vulnerable businesses out there are getting
loans. I am just curious how you are going to get there with some
of this information being optional?
Secretary MNUCHIN. Well, the jobs numbers will be required,
so when people apply for forgiveness, they are going to have to be
very specific in how much money was used for payroll and the
number of jobs. So, that will be required.
As it relates to demographics, this is optional. There are legal
issues associated with forcing people to report demographics.
As I commented in my opening testimony, we have looked at low-
and moderate-income census tracts, and we are pleased that money
was distributed proportionately. But we look forward to working
with you and the Committee on transparency and collecting more
of this information.
Ms. DAVIDS. Well, I appreciate that. And I know that this has
certainly been an iterative process, particularly when we are think-
ing about the rollout of the guidance and the rules around these
programs.
And I know that folks are working really hard at the SBA and
Treasury Department. I have a lot of appreciation for the career
folks, who have been putting in tons of hours. And thank you both
for continuing to show up and listen to our concerns. I want to par-
ticularly thank you for listening to the concerns that my office put
forward about the Tribal enterprises and making sure that the
Paycheck Protection Program was accessible to all Tribal enter-
prises. So, thank you for that.
And I will look forward to continuing to working with you to
make sure that our small businesses are taken care of in this coun-
try.
Chairwoman VELÁZQUEZ. Time has expired. Now we recognize
the gentleman from Pennsylvania, Dr. Joyce, for 5 minutes.
Mr. JOYCE. Chairwoman Velázquez and Ranking Member
Chabot, thank you for convening us here today in Washington. Ad-
ministrator Carranza and Secretary Mnuchin, thank you both for
joining us here. Thank you for your leadership during this what is
an incredibly difficult time.
Small businesses which we in this group frequently state are the
backbone of America, and during this COVID crisis truly we have
seen that these small businesses have become the heart of Amer-
ica. According to data that you provided to us from the SBA, my
district, fortunately, has received $295 million in PPP loans. This
number represents over 2,700 small businesses which were able to
retain their employees, pay their benefits, their health insurance.

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This was a significant relief for the small businesses in Pennsyl-
vania.
This number would be substantially lower had it not been for
your attentiveness for the needs of the farmers. On behalf of Penn-
sylvania farmers, I thank you for your willingness to work with my
office on adjusting these programs to fit the needs of our agricul-
tural producers, those who every day feed us safe and nutritious
food.
Administrator Carranza, as we continue to reopen our economy
it is possible that people may increasingly rely on the internet plat-
forms to purchase goods and services and to even work from home.
While these platforms provide enormous opportunities for small
businesses, this transition could further stretch the digital divide
between urban small businesses and access to affordable and reli-
able broadband in the rural areas who have less reliable internet
options.
This response to COVID-19, as you so eloquently stated, has
been an impetus for innovation. Those words were very striking to
those of us sitting here in the Committee.
Would you support further modifications of the PPP that would
allow funding to be used for broadband improvements or other
costs associated with the tools and the infrastructure that is so nec-
essary to allow rural small businesses to telework effectively and
utilize online platforms.
Ms. CARRANZA. Congressman, I have always been a strong pro-
ponent of cost-effective broadband for the rural areas and the most
underserved markets. And so, I look forward to working with your
office to continue that discussion. Yes.
Mr. JOYCE. Thank you, Administrator. So, those in our rural
areas can more readily access the necessary avenues of commerce,
thank you for this consideration and thank you for allowing us to
continue this discussion and evaluate the use of PPP to support
rural broadband.
Secretary Mnuchin, thank you for acknowledging that utilizing
the remaining funds in PPP can positively affect small businesses
that have been and continue to be drastically affected by COVID.
Thank you for focusing on different businesses and considering
the additional economic impact and qualifying by economic impact
on the businesses. I think that is a reliable model that will allow
us to move forward and effectively utilize the remaining PPP
funds.
Thank you for your continued work with us, Secretary Mnuchin,
and for the efforts to return those remaining workers to their jobs.
Do you feel that utilizing the additional PPP resources will allow
us to continue to see those additional workers return to full em-
ployment?
Secretary MNUCHIN. Yes.
Mr. JOYCE. Thank you both for being here today. Thank you for
continuing your work, and I yield the remainder of my time.
Chairwoman VELÁZQUEZ. The gentleman yields back. Now we
will recognize the gentleman from Maryland, Mr. Mfume.
Mr. MFUME. Madam Chair, thank you very much for the oppor-
tunity. I want to thank you for your relentless efforts at trying to
bring about fairness and equity to this issue and to the overall sear

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of what is happening with small businesses in this country and,
even more so, what is not happening. I want to thank the Ranking
Member and I obviously want to thank our guests who are here.
There is, from where I sit, a great deal of skepticism in many cir-
cles across the Nation from people who see the awarding of PPP
funds and the rollout of this project as being discriminatory; as
being something that works for others, but does not work for them;
and as something that they believe was set up to be that way.
Now, people, for whatever reason, have their own beliefs and
their own shortcomings and misgivings about things, but when
they look at the fact that the President’s lawyer received PPP fund-
ing, that Members of Congress have received it, that private equity
chains have received this funding, it is kind of hard to look at those
persons and say, well, no, that is not the case. These are just coin-
cidences.
And so, it is out of that backdrop, for me at least, and, as I said,
from where I sit, that I am concerned that we continue to have this
discussion about bringing equity to Black and Brown and Korean
businesses where if we, I think, were true to what we were saying
to begin with, whether it was this program or any program that
preceded it, that would be something that we would look for. We
would automatically have that as a threshold, as something we
would want to try to achieve.
And as I said the other day, Madam Chair, after having served
on this Committee 10 years through the ’80s and the ’90s, through
three presidential administrations, and then to be fortunate
enough to return to 24 years later to be a part of this Congress
and, again, this Committee, it is disheartening for me to look back
over that period of time and to recognize that many of the same
arguments advocating on behalf of Black and Brown and Korean
businesses for fairness and equity are still being made. I mean, it
is almost unconscionable, it is unbelievable. And if I didn’t live it
myself through the 10 years that I was here and the 24 years that
I was gone, I wouldn’t believe it.
People are concerned, Secretary Mnuchin and Madam Adminis-
trator, that what they see does not gel with what they have been
led to believe. They think that the awarding of this program in
some way represents Robin Hood in reverse, that the people who
really should be getting some of this money on a fair basis are not
getting it. They anticipate that there will be another review, an-
other study on the study, and then another Plan B for the Plan A
that failed. So, I want to get that on the record because these peo-
ple oftentimes don’t have an opportunity to speak for themselves.
Let me just say to you that in the hearing conducted by this
Committee on June 17th, we learned of many issues that many
borrowers and lenders have faced in applying and in using PPP
dollars; witnesses outlining various areas of improvement, includ-
ing and not limited to more explicit rules, clearer guidance around
loan forgiveness, and more accessibility for minority-owned and un-
derserved businesses. And they believe those are crucial issues.
We learned that the structure and the implementation of PPP
continues, as has been said, to disadvantaged, smaller businesses,
specifically businesses of color. And that is due to the structural
limitations that are built into the program.

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I think both of you would probably agree that PPP funding is
heavily dependent on traditional financial institutions and prior
banking relationships. Many of those institutions have been docu-
mented to have bias in their awarding of loans and bias in their
consideration of loans, not to mention a different assignment of
risk for persons who may be Black, Latino, or Asian.
And so, those things have traditionally hampered Black busi-
nesses. And now when we get to this stage and this juncture, per-
sons like myself, at least you have got to show me that this is not
true.
Prior to the June 17th hearing, both of you know that a letter
was sent to each of your departments inquiring how and why mi-
nority businesses have had so much trouble and being denied in
many instances outright for the EIDL and the Paycheck Protection
Program. We needed transparency. We requested that you imme-
diately begin publishing the demographic data on PPP recipients.
On July 6th, that data was released and our worst anecdotal obser-
vations were confirmed, especially in my congressional district,
where in the entire State of Maryland, which is not a large state—
this is not California or Texas; there are only eight congressional
districts—the district that I represent got——
Chairwoman VELÁZQUEZ. The gentleman’s time——
Mr. MFUME.—2.7 percent of the funding. And I thank you,
Madam Chair. I am good.
Chairwoman VELÁZQUEZ.—time has expired. Yes, sir, you can
finish your—yeah, okay.
Now we recognize the gentleman from North Carolina, Mr.
Bishop.
Mr. BISHOP. Thank you, Chairman Velázquez and Ranking
Member Chabot, and especially to all the Committee members
physically present right here in this hearing room in Washington,
along with our distinguished witnesses, which demonstrates the
kind of the leadership the American people need to see. Thanks.
I join those who have complimented you and those serving with
you, especially for your historic accomplishment in implementing
the Paycheck Protection Program.
Secretary Mnuchin, as you have observed, the key to that his-
toric success and speed was enlisting private sector financial insti-
tutions, including traditional banks, fintechs, credit unions, CDFIs,
to serve as the conduit for massive relief to huge numbers of small
businesses.
Given that fantastic success, if Congress legislates additional re-
lief we would be wise to continue the model of PPP and keep pri-
vate sector lenders enlisted in the mission. But we have heard that
lender fatigue is an issue. This is attributable in part to the fact
that after these business entities jumped to respond to the call of
the Federal Government, a number now face frivolous lawsuits,
proving that too often when government is concerned, no good deed
goes unpunished.
As the administration looks at additional relief measures, it
seems to me that we should try to prove that adage wrong for once,
mainly by clarifying that the current ‘‘hold harmless’’ language
which protects PPP lenders from liability applies throughout the
life of the loan.

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Mr. Secretary and Madam Administrator, isn’t it important to
fight lender fatigue in this way? And will you work with us on this
protection for lenders who have done so much to help in the cur-
rent crisis?
Secretary MNUCHIN. Yes, we will work with you. Thank you.
Mr. BISHOP. Madam Administrator?
Ms. CARRANZA. Likewise.
Mr. BISHOP. Shouldn’t we also be looking at that same issue for
small businesses who face similar concerns, that is frivolous liabil-
ity—or frivolous lawsuits?
Ms. CARRANZA. Yes. One of the concerns I had was that we
don’t take any measures that would be punitive to the borrower or
the lender, especially when we have started with 1,800 authorized
lenders and grew that to 5,500. And the Secretary and I are still
working on additional nontraditional lenders that are still applying
to provide PPP loans. And we are looking forward to making sure
that the underserved, the sole proprietors, and the independent
contractors, really have an opportunity with this over $100 billion
that remain.
Mr. BISHOP. Thank you, ma’am. Administrator Carranza, I
want to follow up on an issue that has disturbed millions of Ameri-
cans. It is now widely known that abortion provider Planned Par-
enthood brazenly violated the law concerning business affiliation by
taking $80 million of PPP loans via its affiliates. The American
people want to know how the SBA failed to act in real time to pre-
vent this wrongdoing and how it will act quickly to compel the re-
turn of those funds and prosecute those responsible.
Ms. CARRANZA. I will answer that question in two manners.
One, we do not discuss individual loan issues publicly. And sec-
ondly, we will be reviewing all affiliations and all loans closely.
Mr. BISHOP. Madam Chairman, I request unanimous consent to
submit for the record the May 19, 2020, letter of SBA Associate Ad-
ministrator William Manger to Planned Parenthood of Delaware,
Incorporated, including the investigative document request and in-
terrogatories appended thereto.
Finally, Mr. Secretary, your testimony referred to your anticipa-
tion of additional relief to business and, importantly, that it will be
targeted to the parts of the economy that need it most as our econ-
omy is starting to move from lockdown to restart. Undoubtedly, the
lockdowns hit certain industries harder and I was pleased to hear
that your answer to Ranking Member Chabot that in targeting the
relief, the administration proposes to rely on neutral standards,
such as documented pandemic-related revenue loss.
Can you elaborate on the threshold you have in mind of revenue
loss that would warrant relief? And do you believe that relief would
be graduated in proportion to the degree of revenue loss?
Secretary MNUCHIN. Well, I look forward to working with this
Committee and the Senate committee to determine those issues.
Again, as you just raised, we should look at whether it should be
a specific number or graduated. So, yes, we look forward to work-
ing with you.
But I think it is important that we target this to the businesses
that are hardest hit.

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Mr. BISHOP. Agreed, Mr. Secretary. And I guess the last point,
I am curious if you would agree that the reason to do that, to tar-
get it according to revenue loss rather than, say, picking specific
industries, is that to do the latter would be both overinclusive and
underinclusive. And you might arbitrarily pick winners and losers
rather than responding to a particular need.
Secretary MNUCHIN. Yes.
Mr. BISHOP. Thank you, Madam Chairman.
Chairwoman VELÁZQUEZ. Time has expired. The gentlelady
from California, Ms. Chu, is recognized for 5 minutes.
Ms. CHU. Yes. Administrator Carranza, I would like to follow up
on this issue of Planned Parenthood. You know, Planned Parent-
hood has been a lifeline for healthcare providers. Their affiliates
serve nearly 3 million patients annually and is an important
healthcare provider for many low-income people across this Nation.
And let me say that Planned Parenthood affiliates operate inde-
pendently from the national organization, each having their own
CEOs and board of directors, and, therefore, qualify for PPP.
On May 28th, I co-wrote a letter to your agency along with
Chairwoman Velázquez. It was signed by 166 Members of Con-
gress. And we asked you to administer the PPP program in a uni-
form manner and specifically not to exclude any entity or nonprofit
on the basis of political ideology.
Now, this letter came in response to numerous Planned Parent-
hood affiliates learning that they were under investigation for vio-
lation of the PPP affiliation rules, even though they were not. So,
I am deeply concerned about the motivations which would have
prompted the SBA to conduct these investigations into the eligi-
bility of Planned Parenthood affiliates, especially after several of
them learned about these investigations first from Fox News rather
than from the SBA directly.
So, Administrator Carranza, of the over 500,000 healthcare and
social assistance entities that have received PPP loans, can you tell
the Committee how many investigations into violations of affili-
ation rules have been conducted? And has the SBA initiated such
investigations against any other nonprofit organization for violation
of affiliation rules under the PPP?
Ms. CARRANZA. Congresswoman, as I addressed Congressman
Bishop, at this point I am not able to discuss any particular loan
review, and I am not in a position to discuss any others that we
are reviewing. The specific one that you are referring to is under
review, as well as others. But I will not get into any specifics about
that, I am sorry.
Ms. CHU. Well, now let me focus in on another issue. Mr. Sec-
retary and Ms. Administrator, I would like to (inaudible) two man-
dates of the CARES Act. One is that all COVID-19 loan programs
be translated into the 10 most commonly spoken languages other
than English. The other mandate is that PPP should prioritize un-
derserved businesses, such as those owned by women, minorities,
and veterans. Despite this clear mandate, Treasury and SBA failed
to even collect demographic data of PPP applicants.
As a result, the loan level data released by your agencies show
that, for instance, in California, only 6 percent of loans under
150,000 included information on race and ethnicity. And in May,

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the SBA inspector general testified to the Subcommittee that I
Chair, the Oversight Committee, that agencies have failed to issue
any formal guidance to lenders on how to prioritize underserved
businesses and, of course, to adequately collect data.
So, to demonstrate the seriousness of this failure, just this week
the National Community Reinvestment Coalition published a study
showing that Black business owners with identical or better fi-
nances than White business owners were less likely to be offered
Federal assistance by participating PPP lenders.
So, Mr. Secretary, please explain why you haven’t provided this
guidance to lending institutions on how they should be prioritizing
the underserved and what you are doing to address this issue, as
well as the collection of demographic data.
And, Ms. Carranza, I do appreciate your testimony saying that
the SBA has translated its resources to 17 languages. But the
EIDL application still is not translated, and what is happening
with that?
Secretary MNUCHIN. So, first——
Ms. CHU. So, Mr. Secretary?
Secretary MNUCHIN. Yeah, first, let me just say the demo-
graphics information was always really intended to be collected on
the forgiveness. So, again, this is something that we couldn’t force
people to do, but we hope that people do this and there will be a
lot more information disclosed.
We have made major efforts to work with the CDFIs for greater
access. And, as I said, we do have access to census tracts, so, again,
that is well represented. But we can always do a better job and we
will.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
Ms. Carranza, you may answer the question.
Ms. CARRANZA. Yes. Concerning the language, you are correct,
we have 17 languages, interpretations of the PPP application. I will
have to look into how many languages in the EIDL, but that pro-
gram was also to have bilingual.
Chairwoman VELÁZQUEZ. The gentleman from Pennsylvania,
Mr. Evans, is recognized for 5 minutes.
Mr. EVANS. Thank you, Madam Chair, for your leadership, espe-
cially on this subject and staying relentless on this subject. We are
all concerned about it.
Madam Chair, is it possible for the gentleman from Baltimore,
that I could yield some of my time, I don’t have much, to get the
answer to this question?
Chairwoman VELÁZQUEZ. The gentleman from Maryland is
recognized.
Mr. EVANS. Yes.
Mr. MFUME. Thank you, Madam Chair. I want to thank the
gentleman from Pennsylvania. I will not take much of it.
The point that I was trying to make, though, is that when the
data did finally get released after our letter, the data that was re-
leased to all of us on July the 6th, it showed, Mr. Secretary and
Madam Administrator, that in the State of Maryland, which only
has eight congressional districts, the one that I currently represent
now got 2.7 percent, 2.7 percent, of all of the funding, even though

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it is the most diverse district with Black, Latino, and Korean
businesspersons anywhere in the state.
Now, this district had been previously represented by the late
Elijah Cummings, and so we have been without a representative
for some time until I got sworn in. But there is no reason in God’s
world that there should be that kind of a disparity so obvious in
a state and a district, in particular, that diverse.
And I will yield back the time to the gentleman from Pennsyl-
vania, and I appreciate it.
Mr. EVANS. Thank you.
Chairwoman VELÁZQUEZ. Thank you.
Mr. EVANS. I want to specifically go to the Secretary of the
Treasury and kind of piggybank a little bit on what was just stat-
ed. The question I want to ask, what are you doing to address the
discriminatory loan practices? And what are you going to do to hold
these banks accountable in terms of this process?
We have seen that. I think the Chairperson and Chairwoman
Maxine Waters, they work together about CDFIs, initial invest-
ment. What are you specifically as Secretary of Treasury—because,
obviously, Black borrowers have been treated differently than
White borrowers. So, can you speak to that, Mr. Secretary?
Secretary MNUCHIN. Well, let me first say I have had multiple
calls with Chairwoman Waters and they have been very construc-
tive and very helpful. We have also made a major effort to work
with the CDFIs and expand the CDFIs, and we are pleased with
their work. Robert Smith, as I have commented before, has been
particularly helpful. We have had weekly conference calls with him
and his team.
And we have to do a better job to make sure that all areas and
all communities have access to these funds. And to the extent there
are specific situations of discrimination or others, obviously we
want to research that.
Mr. EVANS. Well, when you say ‘‘better,’’ you have a lot of expe-
rience. I heard the gentleman from Colorado ask you about your
banking background. Can you in a very specific way tell us what
tools you intend to use, especially when you know that this prob-
lem does exist?
Secretary MNUCHIN. Well, let me just repeat, the statistic we
have on low- and moderate-income housing is we did have proper
representation. Now, that obviously is different than other demo-
graphics.
The CDFIs, I think, are best used at being able to access the un-
derserved communities, and that is why we proactively put a CDFI
set-aside as something we very much support. And we support an
additional legislation making sure that the CDFIs have the proper
resources to serve these communities.
Mr. EVANS. Go to the administrator real quick. The EIDL pro-
gram relating to constituents of mine who called about it, the ques-
tion around credit and what, tell me what was your thinking in
terms of receiving that information. Was there a ranking of order
relating to EIDL distribution of grants? How exactly was yours or
management around you relating to the EIDL program?
Ms. CARRANZA. The EIDL advance administration was based
on the number of applications that were, again, in the queue apply-

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ing for the advance. And we based it on $1,000 per employee. It
wasn’t just an arbitrary number. It was a well-assessed and ana-
lyzed strategy. It was discussed with Members of the Senate Small
Business Committee.
We advised them that in order to cover the number of applicants,
the number small businesses that were applying for the advance,
we needed to do something so that many more people would receive
the funds. The average for both the agriculture and as well as nor-
mal businesses were about three employees per business, so it was
about 3,000.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
Mr. EVANS. Thank you, Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman from Illinois, Mr.
Schneider, is recognized for 5 minutes.
Mr. SCHNEIDER. Thank you, Madam Chair. And I want to
thank you for holding this hearing. Congressional oversight of
these unprecedented programs is critical, especially as we thinks
strategically about our posture going into the fall. I want to thank
you as always and to the Committee staff for the work you have
been doing throughout this process.
Secretary Mnuchin and Administrator Carranza, thank you for
joining us today and for your work assisting small businesses
throughout this pandemic.
Administrator Carranza, you assured me that many of our com-
plaints about the EIDL program, the lack of communication to bor-
rowers, the backlog of applications, have been addressed. I heard
you say today that you have compressed the time of processing to
only 5 days. But I am concerned that, you know, at this moment,
as we are in this kind of lull and it is kind of like a diner in be-
tween the lunch and the dinner rush, things are quiet, but it is
going to get busy again soon when the money starts to run out.
When you talked about the $150,000 as a cap and earlier you
had mentioned that we, through our work, had provided a bridge,
when you created that arbitrary cap that is a bridge that goes part-
way across the river. But without a full bridge, many of these busi-
nesses are going to find themselves in the river getting wet and
many of them will drown. We need your help and I hope you will
lift that cap and give the help that many of these businesses need.
Economic uncertainty continues and will continue in the months
ahead. Small businesses are still going to need more help in the
fall. And so, today what I would like to discuss is Treasury and
SBA’s preparations to anticipate the expected surge in challenges
in the fall.
Earlier this week, I sent both of you a letter with questions I
would like to discuss on the PPP and EIDL loans. How well they
were implemented, how they helped the businesses, what gaps re-
main, and what your agencies are doing to anticipate that.
In that vein, Secretary Mnuchin, what economic forecast remod-
eling, if any, has Treasury done to anticipate future needs?
Secretary MNUCHIN. So, I think economic modeling is particu-
larly hard at the moment because of the fact that we closed down
the economy. This is not a typical economic situation. But we are
relying upon our economic models where we do anticipate as we
open the economy that we will have a significant improvement, as

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I have said, in the third quarter. But there will be industries, and
we have done economic modeling within the Treasury on the indus-
tries that are going to be hit the hardest and the sizing that we
need of additional PPP funds to address that. And we will be work-
ing with this Committee and with the Senate on that.
Mr. SCHNEIDER. Do your models take into account the fact, as
we are seeing in California, Texas, Arizona, Louisiana, Florida, a
serious spike in cases? In California, you are seeing businesses
close down again. Do the models take that into consideration?
Secretary MNUCHIN. Well, again, let me just first say that tra-
ditional economic models, given the medical situation, are very
hard. But, yes, we are looking at this across the entire U.S. and
certain scenarios, as you said, where there will be a slowdown in
opening and certain areas where things are doing better. But,
again, that is the reason why I think we need additional funds to
help these hardest hit businesses.
Mr. SCHNEIDER. And I appreciate it is hard, but it is nec-
essary. And it is also necessary for these businesses and other or-
ganizations, like our schools, to have clear and consistent guidance.
I have had countless conversations with businesses, yesterday I
had a group call, Zoom call, with school superintendents, and all
of them are talking about the challenges they are facing with the
lack of clarity and the guidance coming from both your Depart-
ment, as well as others.
And I asked the superintendents about the teachers. The teach-
ers said they are absolutely terrified about going back to work. I
don’t think the government is doing nearly enough to provide that
guidance. I hope we can see more guidance.
But as you are looking at forward-thinking and what we might
need, how do you incorporate the data you have, the uncertainty
that lies ahead to make sure we can give better guidance to our
businesses going forward?
Secretary MNUCHIN. Well, I can assure you that the task force
will be working and continues to work with the states on guidance.
And obviously, the states refine it based upon the different areas.
And on your comment, I expect that we will have a significant
amount of money dedicated to K to 12 education to help them deal
with, as they—the areas that reopen have the proper money to fit,
so that it is safe for students and for teachers.
Mr. SCHNEIDER. Thank you. Let me just say it is critical, not
just the money, which desperately is needed, but the guidance on
how to use that money and how best to open safely.
In my last few seconds, Administrator Carranza, when we spoke
last, I gave you last month a letter asking for an update on 59
businesses in my district that still have not received a decision on
their EIDL application. As of today, 12, more than 20 percent, of
those companies are still waiting. Can you give us an estimate of
when we will get these? Companies like Easy Cut in my districts
are waiting and trying to get that information to survive this pan-
demic.
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
You may proceed to answer the question.

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Ms. CARRANZA. Congressman, I look forward to working with
your office to identify the remaining balance of those businesses to
come to a conclusion.
Mr. SCHNEIDER. Thank you.
Ms. CARRANZA. You are welcome.
Mr. SCHNEIDER. With that, I yield back.
Ms. CARRANZA. Thank you.
Chairwoman VELÁZQUEZ. The gentleman from New York, Mr.
Espaillat, is recognized for 5 minutes.
Mr. Espaillat, you need to unmute yourself.
We cannot hear you, so I am going to recognize the gentleman
from New York, Mr. Delgado, for 5 minutes.
Mr. DELGADO. Thank you, Chairwoman. I want to thank both
Administrator Carranza and Secretary Mnuchin for being with us
today.
And while the PPP and EIDL programs have been critical for
small business owners, I want to take a moment to highlight a bill
that I introduced that was included in the CARES package, the
Small Business Repayment Relief Act, now known as the Small
Business Debt Relief Program, which provides 6 months of pay-
ments—principal, interest, and fees—for qualified SBA loans, in-
cluding SA, 504, and microloans.
In the month of April, the SBA made payments to lenders just
over 1 billion. And these payments corresponded to 263,192 total
borrowers. However, estimates provided by the Congressional Re-
search Service indicate that there are about 320,000 outstanding
loans across these three programs.
Administrator Carranza, you noted during a Senate Small Busi-
ness Committee hearing last month that the SBA had taken steps
to notify borrowers of this benefit, but needed to do more outreach
to ensure borrowers who are eligible are aware of this benefit. Can
you tell me what concrete steps you have taken to ensure that
every eligible borrower is able to take advantage of these 6 months
of payments?
Ms. CARRANZA. Yes, we dealt with the lenders and intensified
the communication. As a result of that, we have realized it has
gone from $1 billion to $3 billion of debt relief. And we can do more
because, as you stated, there is still an opportunity to work not
only with the existing businesses, but others that are interested.
And our 7(a) has grown significantly, which we are very pleased
about; 504 is not growing as quickly, so we need to intensify in that
particular area. I am very pleased to announce that within the
HUBZone, as you know, the 504 falls into that area, the under-
served market, we have over $106 billion that have been appro-
priated under the PPP program.
I look forward to working with your office if you have any par-
ticular areas that you would like me to concentrate on.
Mr. DELGADO. Well, I would like to just follow up, if I may. You
said you contacted the lenders and then you said you can do more.
So, I am curious if you would be able to detail what the more
would include.
Ms. CARRANZA. Follow-up calls to the individuals that we ini-
tially contacted through our Office of Capital Access.
Mr. DELGADO. Anything else?

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Ms. CARRANZA. Again, I look forward to speaking with you and
working up a strategy that would—if you have a particular area
that you believe we could do a better job of. I will go back to the
office and inquire as to how are we working with all of the other
program offices.
Again, 7(a) has progressed well; 504 not as strong. But the debt
relief has seen an increase of a couple of billion dollars since we
last spoke. That is to say since the hearing. Thank you.
Mr. DELGADO. Given that 7(a) has increased well, are there
things that are being done with regards to that loan that could be
utilized with regards to the other major loans that could help clos-
ing the gap we are speaking of now?
Ms. CARRANZA. Well, Congressman, we have been talking
about perhaps strengthening up all of the flagship loans and we
have been communicating that information to Treasury.
Mr. DELGADO. Okay. We should definitely coordinate with our
offices and talk through a bit more what other concrete steps we
could take to help facilitate this. You know, we also don’t know
how much has been spent through this program since May. We
don’t know how much has gone to new qualified loans compared to
existing. We don’t know how many borrowers have yet to receive
it. We don’t know which lenders have failed to comply.
On June 5th, Senator Coons and I sent a letter requesting this
information. Do you have this information available or when can
we expect this information?
Ms. CARRANZA. I look forward to working with your staff. And
if we have the data, which we reconcile on a quarterly basis, from
what I understand, we can make that available to you in short
order.
Mr. DELGADO. We sent the letter on June 5th, and I just want
to know have you been in receipt of the letter?
Ms. CARRANZA. I am sure our congressional legislative office is
working on it, sir, so I look forward, again, to connect with your
office and resolve that particular issue and——
Mr. DELGADO. Yeah, we certainly——
Ms. CARRANZA.—provide you the information that you need
Mr. DELGADO. I appreciate that. We certainly would like to ex-
pedite this process given, you know, the urgent needs on the
ground.
Ms. CARRANZA. Thank you.
Mr. DELGADO. And I am sure you can imagine the importance
of that. So, with that, I will yield back my time.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Mr. Espaillat is recognized for 5 minutes. He is not ready. They
are having some technical issues.
The gentlelady from Minnesota, Ms. Craig.
Mr. ESPAILLAT. Can you hear me now, Madam Chair?
Chairwoman VELÁZQUEZ. Yes, I can hear you.
Mr. ESPAILLAT. Okay. Will you allow me to proceed?
Chairwoman VELÁZQUEZ. Go ahead.
Mr. ESPAILLAT. Thank you, Madam Chair, and thank you——
Chairwoman VELÁZQUEZ. The gentleman is recognized for 5
minutes.

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Mr. ESPAILLAT. Thank you, Madam Chair, and thank you,
Ranking Member. Thank you, Administrator Carranza and Sec-
retary Mnuchin.
Several months back, I spoke at this Committee and I said that
small businesses, mom-and-pop stores, throughout New York were
really upset and were mad as hell. Because we all know, and I am
really amazed to see how everybody is praising the PPP program
and how it began, because we all know it was a debacle. The portal
crashed. Traditional banking institutions went to their preferred
customers. And only the well-heeled and connected were able to get
access to the PPP program to the degree that many of them were
shamed into returning the money because they were publicly em-
barrassed that they were accessing this money.
And small businesses throughout America felt that Main Street
should be bailed out. We have already bailed out Wall Street. We
already bailed out the airline industry. We already bailed out a
bunch of industries. But Main Street needed to be bailed out, and
the start-up of the PPP program was a debacle. In fact, it took a
carve-out of some money and acknowledging that we needed to en-
gage community-based banking and CDFIs to access dollars and
give them to the small businesses across Main Street in America.
But even with that, we have just recently seen how a New York
Times—a Wall Street Journal report on an investigation made by
the New York City comptroller revealed that only 12 percent of the
1.1 million businesses, employee-based businesses, in New York
City got PPP loans in comparison to 20 percent of businesses in
states like Montana, Kansas, Iowa, Wyoming, et cetera. While the
pandemic was ravaging New York, the PPP program was giving
money to those states that were the least impacted by the pan-
demic.
So, my first question is to you, Secretary. You mentioned that
you will carve out some money for minority- and women-owned
businesses. How much money from the remaining part of the PPP
program and additional funding that will come for it will you carve
out for that particular part of the economy?
And the second question is, Mr. Secretary, will you consider hav-
ing some parity in the level of access to the PPP program for states
like New York, which contributes far more to the Federal coffers
and contributes in ways that other states don’t, and yet they get
far less back? Again, only 12 percent of businesses here got that
as opposed to 20 percent in states like Kansas and Wyoming and
Iowa and Montana.
Those are my two questions. How much money will you carve out
for minority- and women-owned businesses? And do you want—is
there an effort to give states like New York, which are ham-
mered—the Bronx, which was hammered by the pandemic, had one
of the lowest numbers of PPP loans given to their businesses. In
fact, if you look at who got the loans you will see that many man-
agement consulting firms got it, legal services firms got it, as op-
posed to, let us say, for example, nursing homes, which I think
were critical in bringing life-and-death services to people impacted
by the pandemic.
So those are my two questions, Mr. Secretary.

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Secretary MNUCHIN. So, as it relates to the first question, a
specific dollar amount for the set-aside, I will be working with this
Committee and with the Senate to see what both committees think
is appropriate for that. And I am sure we can reach an agreement
that—something that is appropriate and significant.
As it relates to New York, I am not sure why more PPP loans
haven’t been made there. There is still money available. So, to the
extent there are businesses in your area that need loans, we are
more than happy to work with you.
I don’t believe there should be set-asides for certain states. And
I think, again, it took a while to get this up and running, but I
think now we have a system that will work well in the next round.
Mr. ESPAILLAT. Well, now, Mr. Secretary, now that the pan-
demic is ravaging the rest of the country, states like Florida, you
must agree, right, that Florida, Texas, Arizona are getting hard-hit
right now. And, in fact, some of those businesses may have to shut
down.
Perhaps as New York looks to reopen, this is the perfect time to
focus in places in New York to see how we can help out New York.
As goes New York goes the rest of the country. And so, is there a
commitment to help, you know, small businesses, minority- and
women-owned businesses, in New York State?
Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
Now we recognize the gentlelady from Minnesota, Ms. Craig.
Ms. CRAIG. Thank you so much, Madam Chairwoman. And I
want to say thank you to Administrator Carranza and Secretary
Mnuchin for your efforts over the course of the last 3 months. This
Committee has been really a model of bipartisan efforts to save our
small businesses. So, I just want to say thank you to my colleagues
across the aisle, as well.
Secretary Mnuchin, I was going to ask you and Administrator
Carranza about extending the PPP applications for a second loan.
You have indicated that you are open to that idea. I actually have
the bill here in the House that would allow those hardest hit sec-
tors, like restaurants and retail and hospitality, to come back and
get a second forgivable loan if their revenue has been impacted by
50 percent or more and the size of their business is 100 or fewer
employees with that remaining approximately $130 billion.
I also had the bill a couple of weeks ago that passed the House,
and thank you to the President for signing the extension of the
loan program through August 8. I will tell you that I already this
week have been meeting with small lenders, community lenders,
who have been telling me that smallest of smallest businesses,
loans of $6,000, $9,000, people are coming back and getting the
PPP loan for the first time in the smallest of loans, which is really
heartwarming. And I thank you for extending that.
Secretary Mnuchin, can you just say a little bit more about the
program as you would envision it of allowing those hardest hit sec-
tors to come back? And I just want to make sure that I understand
the direction that you and the administration are thinking, as well.
Secretary MNUCHIN. Well, my suggestion and, again, let me
just say we look forward to working with you and the Committee
and the Senate, but my suggestion would be we have a program
that works. We try to keep as many parts of the program con-

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sistent, we allow a second check, and that we put a limitation on
a revenue decline and a size. And I understand your bill. I think
that is a reasonable approach, but something, again, we are going
to want to look—work with you, this Committee, the Senate to fig-
ure out what the appropriate revenue decline should be, what the
size of the businesses should be, whether it should be 100 or slight-
ly higher than that.
But, again, we have complete agreement. There should be a sec-
ond check available to the businesses that are hardest hit and
there should be requirements around that.
Ms. CRAIG. Thank you so much. My lenders and my small busi-
nesses as of this week are starting to ask the question, Adminis-
trator Carranza and Secretary Mnuchin, if there is any thought
with respect to the smallest of smallest loans. I know there is a
Senate bill that defines it as 150,000 or less, but that would ab-
solve these businesses from essentially filling out those loan for-
giveness applications just from the perspective of the bureaucracy
of doing that.
Is there any thought on either of your parts that whatever num-
ber we might not require or should we be advising our small busi-
nesses get your materials ready, everybody is going to have to fill
out this loan forgiveness application?
Secretary MNUCHIN. Well, we have put out what we call the EZ
Form, and I think there are certain things that we can work with
the Committee on in new legislation to simplify this even more. I
am somewhat hesitant to just say a blank check, if you were
150,000 or less, you don’t have to do anything, because, again, I am
concerned about fraud and want to make sure that the oversight
committees are comfortable that this money was used appro-
priately. So, I think some level of reporting in a simple way is im-
portant.
Ms. CRAIG. Thank you so much. And then two final things very,
very quickly.
The initial CARES Act with the $1,200 Economic Impact pay-
ment, I know over the course of the next couple of weeks you are
going to be working with the Senate, with the House perhaps on
a second—or an additional bill. The 17- and 18-year-olds were left
out as dependents, adult disabled dependents, college students like
mine, who were back in my basement eating us out of house and
home, were left out as dependents.
Secretary Mnuchin, would you be open to including them in the
next package and making that retroactive?
Secretary MNUCHIN. So, let me just say from a policy stand-
point, I understand that issue and I am sympathetic to it. There
are some technical issues that the IRS and we have in admin-
istering that because of the way dependents were reported on tax
returns. But we are trying to figure out if there is a way to do that.
Ms. CRAIG. I appreciate that very much, sir.
And with that, Madam Chairwoman, I will yield back.
Chairwoman VELÁZQUEZ. The gentlelady yields back. Let me
thank the Administrator and the Secretary of the Treasury. Thank
you again for being with us today to discuss your agencies’ re-
sponse to the COVID-19 pandemic.

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I am dedicated to pushing SBA and Treasury to prioritize our
very small and underserved businesses because these communities
are hurting. The programs have been fraught with challenges for
participants and a lack of transparency for those of us seeking to
conduct oversight.
With that said, I expect regular updating to the data on PPP and
forgiveness in the future. I also ask that you publish a comprehen-
sive program guide. We cannot continue to operate this way. It is
not good for borrowers; it is not good for lenders either. We cannot
work when there are at least 22 entering final rules and 49 fre-
quently asked questions that borrowers and lenders must navigate.
Understanding that this program was stood up with extraordinary
speed, it is long overdue that a comprehensive guide is published.
I ask unanimous consent that Members have 5 legislative days
to submit statements and supporting materials for the record.
Without objection, so ordered.
If there is no further business before the committee, we are ad-
journed. Thank you.
[Whereupon, at 12:48 p.m., the committee was adjourned.]
[Hon. Jovita Carranza did not submit his QFR’s in a timely man-
ner.]

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APPENDIX

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