WASHINGTON – U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, called out Biden’s Small Business Administration (SBA) for working to drastically change the SBA’s flagship small business lending programs while refusing to address bipartisan concerns on increased risks posed by non-depository institutions and loosened underwriting standards.
“In spite of a bipartisan push for the SBA to exercise diligence and restraint, the SBA has ignored Congress – specifically this committee – every step of the process and is moving full speed ahead,” said Ernst. “I want to be very clear: we need to come to a bipartisan agreement on a legislative response to these rules before we begin negotiations on other aspects of modernizing the SBA. Small business lending is the foundation of SBA’s programs, and we can’t undertake renovations to the rest of the Agency until this dire problem is fixed.”
Prior to her questioning, Ernst swore in the witnesses to ensure fidelity. She specifically questioned SBA Associate Administrator Patrick Kelley on his efforts to influence SBA’s rulemaking process, and the threat of proposed lending rules, which would open SBA lending programs to fraud, predatory lending practices, and other vulnerabilities. Ernst also reiterated her concerns about the SBA wiping the books clean of billions of dollars in pandemic recoveries, and the SBA Deputy Inspector General agreed with her concerns.
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In March, Ernst joined Committee Chairman Ben Cardin (D-Md.) in requesting that the SBA work with congressional committees and go back to the drawing board on the agency’s irresponsible changes to its loan underwriting while permitting an unlimited number of non-bank financial technology companies, or “fintechs” – the very entities responsible for issuing billions of dollars-worth of Paycheck Protection Program (PPP) fraud – to participate as lenders.
In April, Ernst demanded that SBA continue collections on nearly $72 billion of taxpayer-funded COVID loans.