Is SBA denying disaster relief based only on an arrest?

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline” In response to COVID-19, Congress created the Paycheck Protection Program (PPP) and expanded the Economic Injury Disaster Loan (EIDL) program, appropriating hundreds of billions of dollars across these programs to assist small businesses affected by the pandemic and economic crisis.  As we have been pointing out in this space over the past five weeks, the Small Business Administration (SBA), which administers both programs, has imposed broad restrictions on access to relief based on arrest or conviction history, restrictions that were neither required nor contemplated by Congress.[1] Until now, attention has been focused on small business owners unfairly denied PPP relief based on their record.  Members of Congress and major organizations have written in opposition to PPP regulations and policies that impose barriers based on a record, and dozens of media outlets have covered the issue.  But the EIDL disaster relief program has largely gone under the radar, in part because the SBA has not published guidance about how it is treating EIDL applicants with a record. In a new development, documents posted anonymously on Reddit last week, and published by Law360 on May 3, purport to be […]

Read more

CCRC awarded operating grant by Arnold Ventures

Press Release: Arnold Ventures Awards Grant to the Collateral Consequences Resource Center April 30, 2020 Washington, D.C. — The Collateral Consequences Resource Center (CCRC) is pleased to announce the award of an operating grant of $200,000 from Arnold Ventures.  The grant will support our program of research and technical assistance on restoration of rights and record relief following arrest or conviction, enabling us to expand our efforts to track and assess legislative trends as states around the Nation, and continue working to improve opportunities for people with a criminal record. “We are delighted to be able to support the Collateral Consequences Resource Center’s pioneering work in support of reintegrating people with a criminal record,” said Jeremy Travis, Executive Vice President of Criminal Justice for Arnold Ventures.  “The Restoration of Rights Project is unique in its national scope and comprehensive nature, and it has become an authoritative resource for advocates and practitioners alike during an extraordinarily fruitful period of legal reforms.”

Read more

Mnuchin defends record restrictions for SBA stimulus loans

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline” We have written much in recent days about how the SBA has imposed new restrictions on participation in the Paycheck Protection Program (PPP) by small business owners with a record of arrest or conviction.  We were therefore surprised to hear Secretary Mnuchin at the White House press briefing yesterday assert that the new SBA rules are actually more favorable to this population than the old ones.  That is simply not true. Prior to enactment of the CARES Act, the SBA’s rules for its 7(a) loan program—of which the PPP is the newest part—disqualified only people with open criminal cases.  People with past records were subject to an individual evaluation.  In launching the PPP, the SBA imposed entirely new mandatory disqualifications that were neither part of SBA’s preexisting regulations nor required by the CARES Act.  New PPP rules and policies prohibit loans to any small business owner who, in the past five years, had a felony conviction, plea, or was placed on probation, parole, or diversion, even without a conviction. Yet at a press conference yesterday following Senate approval of additional PPP funds, Mnuchin claimed exactly the opposite.  Responding to […]

Read more

Second Chance Small Businesses Deserve Another Chance

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline” As America prepares to get back to work, will some people be left behind? The Small Business Administration (SBA) has adopted rules for emergency COVID-19 loans that exclude otherwise eligible existing small businesses from relief solely because they are owned in part by individuals who have a criminal record. Given that at least 19 million Americans have a felony record, this overly broad exclusion threatens to unfairly deny a lifeline to deserving small businesses and their employees. The Paycheck Protection Program (PPP) that was part of the $2 trillion relief legislation passed by Congress and signed by President Trump provides loans to small businesses that are forgivable if the business retains its employees during the period of at least eight weeks. While the legislation was vague on exclusions based on criminal background, the guidance adopted on April 2 by the SBA is overly broad, going far beyond excluding only those who have committed  offenses related to financial dishonesty such as bank fraud or extremely serious offenses such as rape and murder. Among those excluded are small business in which an owner of 20 percent or more is currently facing charges for any offense, […]

Read more

SBA has no excuse for excluding people with a record from stimulus relief

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline” Some federal officials have claimed in recent days that the government is required to bar people with a criminal record from emergency loans under the Paycheck Protection Program (PPP) either by the CARES Act or by preexisting SBA rules.  Neither assertion is true. There is nothing in federal law, including the CARES Act, that requires the Small Business Administration (SBA) to disqualify small businesses from applying for PPP loans based on an owner’s past arrest or conviction history.  Prior to enactment of the CARES Act, the SBA’s rules disqualified only people with open criminal cases from the 7(a) loan program of which the PPP is the newest part.  Yet in launching the PPP, the SBA inexplicably decided to impose entirely new record-related restrictions on a population that is already severely disadvantaged: the new PPP rules and accompanying application forms prohibit loans to any small business owner convicted of a felony within the past five years, or placed on probation or parole during that time, even if all court-imposed penalties have been fully satisfied.  In fact, the SBA even disqualifies people whose felony charges never led to a conviction, but instead were dismissed […]

Read more