(Washington, D.C.)—Ranking Member of the Senate Small Business & Entrepreneurship Committee Ben Cardin (D-Md.) and U.S. Senators Rob Portman (R-Ohio), Cory Booker (D-N.J.), and James Lankford (R-Okla.) today released the following statement after the U.S. Small Business Administration (SBA) and the Treasury Department announced updated rules with regard to past criminal justice involvement and eligibility for the Paycheck Protection Program (PPP):
“We appreciate the Administration’s willingness to engage with us on this issue, and we welcome this Interim Final Rule to remove some barriers to PPP loans for entrepreneurs who have been involved with the justice system,” the senators said. “We remain concerned that individuals who have not yet had their day in court will still be prevented from securing a PPP loan, which violates a core tenet of our society: the presumption of innocence. We further want to reiterate that it is inappropriate to exclude from PPP any entrepreneur who has a prior felony unrelated to a financial crime. We will continue working with the Administration to ensure that small business owners and their employees are not unjustly prevented from securing these job-saving loans.”
The new rule reduces the timeframe for the exclusion of justice-involved small business owners in the PPP from 5 years to 1 year for felonies that do not involve fraud, bribery, embezzlement, or a false statement in a loan or federal assistance application. In addition, following an exchange with Senator Booker at Wednesday’s Small Business Committee hearing, the agencies also made modifications to ensure that owners who had participated in a pretrial diversion program would be eligible for PPP loans. They do not, however, fix a major flaw within the old rules that penalizes those who have yet to have their day in court.
On June 4, the four senators introduced the bipartisan Paycheck Protection Program Second Chance Act, which would remove barriers to PPP for owners with unrelated felony records while preserving the presumption of innocence and keeping in place the five year timeframe for felony crimes related to financial fraud.