Sen. Ernst Urges SBA to Collect Debts on $72 Billion of COVID Loans
Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, is pressuring the Small Business Administration (SBA) to pursue debt collections on all loans related to COVID relief programs, irrespective of their size.
The SBA is currently using the Debt Collection Improvement Act of 1996 to effectively forgive Paycheck Protection Program (PPP) loans under $100,000 and COVID Economic Injury Disaster Loans (EIDL) under $100,000.
EIDLs under this amount represent about $71 billion, in addition to the estimated $1.1 billion in uncollected PPP loans.
In her letter to the SBA, Ranking Member Ernst asserts, “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.”
She goes on to express her concerns about the SBA’s repeated deferral of EIDL payments, which makes it increasingly likely that the loans will never be repaid and delinquent debts will never be collected.
Ernst states, “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.”
The Senator has previously questioned SBA Administrator Guzman on the Biden administration’s decision not to pursue debt collections on around $1.1 billion worth of PPP loans under $100,000.
Image: Sen. Joni Ernst/Facebook
This article, “Sen. Ernst Urges SBA to Collect Debts on $72 Billion of COVID Loans” was first published on Small Business Trends