The SBA has decided to forgo debt collections on COVID Economic Injury Disaster Loans (EIDL) less than $100,000. EIDLs under $100,000 account for approximately $71B. This is in addition to failing to pursue collections on PPP loans under $100,000 for an estimated $1.1B.
WASHINGTON – U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, is demanding that the Small Business Administration (SBA) pursue all debt collections, no matter the size, for all SBA COVID Programs. The SBA is wrongfully employing the Debt Collection Improvement Act of 1996 to effectively create forgiveness for Paycheck Protection Program (PPP) loans under $100,000 and now COVID Economic Injury Disaster Loans (EIDL) under $100,000.
In the letter, Ranking Member Ernst writes, “In total, the SBA could forgo collections on over $72 billion of COVID program loans, without appropriate justification or authorization to do so by Congress.
“SBA has chosen on at least four occasions to defer payments on EIDLs and, as time passes, it becomes more likely that these loans will never be repaid and less likely that any delinquent debts will ever be collected. This is unacceptable, as is any potential attempt by the SBA to once again forgo collections altogether on a program it is tasked with managing on behalf of the American taxpayer.”
Read Ernst’s letter to SBA Administrator Guzman here.
Recently, Ernst questioned SBA Administrator Guzman on the Biden administration’s decision not to pursue debt collections on roughly $1.1 billion worth of PPP loans under $100,000. Watch here.