"Chairman Williams Condemns the SBA for Failing to Sell the COVID EIDL Portfolio as Directed"
Summary
A statement dated May 22, 2024 from Congressman Roger Williams (TX-25), Chairman of the House Committee on Small Business, after the SBA announced its intention to not sell the COVID Economic Injury Disaster Loan (EIDL) portfolio. Williams states that a third-party consultant recommended selling the portfolio as early as September 2021 and again in June 2022, and that the SBA has not provided the Committee its internal analysis. A background section states that the SBA decided to end active collection on loans worth $100,000 or less, that the Committee's initial requests were made on March 15, 2023, and that the SBA reversed its policy on December 28, 2023, stating an intent to refer the loans to the Treasury Department. It states that the SBA wrote to the Committee that day that it had decided not to sell after re-evaluating the portfolio.
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Full text
Chairman Williams Condemns the SBA for Failing to Sell the COVID EIDL Portfolio as Directed May 22, 2024 WASHINGTON, D.C. – Today, Congressman Roger Williams (TX-25), Chairman of the House Committee on Small Business, issued the following statement after the U.S. Small Business Administration (SBA) announced its intention to not sell the COVID Economic Injury Disaster Loan (EIDL) portfolio as advised by independent consultants. “A third-party consultant, paid for by taxpayer dollars, recommended the SBA sell the portfolio as early as September 2021 and again in June 2022, but the SBA declined to do so because they did their own analysis and determined the sale was not in the ‘best interest of the government,’” said Chairman Williams. “I am extremely disappointed in the SBA for failing to sell off the EIDL portfolio as advised. “Today, the SBA wrote us a letter stating that they re-analyzed the portfolio and again determined it was not in the best interest of the taxpayer to sell. Yet once again, despite repeated requests, the SBA failed to provide the Committee with their internal analysis and justification for how they reached that conclusion. This is an unacceptable refusal to cooperate with Congressional oversight that has become routine under Administrator Guzman’s leadership. “Had the SBA taken the independent consultant’s recommendation at the time, the SBA would have avoided what they are now arguing is the high cost to sell the loans. On top of the disastrous decision not to sell, the SBA fundamentally mismanaged the sub-$100,000 loan portfolio. The SBA has failed to clearly delineate a collection plan and continually push any deadlines on when they will begin these activities. Simply put, the SBA is not serious about collecting on any of these taxpayer dollars, and selling a portion of this portfolio is the best way to remove the SBA’s incompetence from this equation. “The SBA is not serious about doing right by the taxpayers. My colleagues and I will continue our investigation into the egregious decision-making process of Administrator Guzman and her cohorts on this issue.” Background: Beginning in September 2021, the SBA made two key disastrous decisions in determining how to handle the portfolio of debt they took on between the Paycheck Protection Program (PPP) and COVID EIDL. The first, was to end active collection on loans worth $100,000 or less and the second was the failure to follow the advice of the 3rd party consultant they hired to help make these decisions and sell all or portions of the COVID EIDL portfolio. The Committee has been investigating this for 14 months and now, with the initial requests being made on March 15, 2023. Though the Committee provided a narrative response a few weeks later, the SBA did not act in good faith to begin producing any of the requested documents. After multiple accommodations by the Committee and minimal SBA production on the requests, the SBA abruptly reversed its policy on December 28, 2023, and stated their intent to begin referring the loans to the Treasury Department. The Committee requested the new information that led the SBA to make this change, but to no surprise, the SBA remained uncooperative and continued to obstruct the Committee’s oversight efforts. The SBA made the determination to not sell against the recommendation of the third-party consultant. The SBA said, at the time, they conducted their “own analysis” and determined the sale of the portfolio was not in the best interest of the government. Today, the SBA wrote to Chairman Williams and the Committee on Small Business stating they have decided to not sell out of the “best interest” of the government after “re-evaluating” the portfolio.
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