[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
   THE ECONOMIC INJURY DISASTER LOAN PROGRAM: A VIEW FROM MAIN STREET

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JUNE 10, 2020

                               __________
                               

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                     

                       

            Small Business Committee Document Number 116-081
             Available via the GPO Website: www.govinfo.gov
             
             
             
                             ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
 41-292                  WASHINGTON : 2020              
             
             
             
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania
                       DAN BISHOP, North Carolina

                 Melissa Jung, Majority Staff Director
   Justin Pelletier, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                   
                   
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Nydia Velazquez..................................................     1
Steve Chabot.....................................................     2

                               WITNESSES

Ms. Nancy Sexton, Owner, The Muse Rooms NoHo, North Hollywood, CA     5
Mr. Jerome Whack, Owner, Christian Street Pharmacy, Philadelphia, 
  PA.............................................................     7
Dr, Craig H. Gerstein, Assistant Professor of Ophthalmology, 
  Northwestern University Feinberg School of Medicine, Gerstein 
  Eye Institute, Chicago, IL.....................................     8
Ms. Karen Kerrigan, President and Chief Executive Officer, SBE 
  Council, Vienna, VA............................................    10

                                APPENDIX

Prepared Statements:
    Ms. Nancy Sexton, Owner, The Muse Rooms NoHo, North 
      Hollywood, CA..............................................    28
    Mr. Jerome Whack, Owner, Christian Street Pharmacy, 
      Philadelphia, PA...........................................    32
    Dr. Craig H. Gerstein, Assistant Professor of Ophthalmology, 
      Northwestern University Feinberg School of Medicine, 
      Gerstein Eye Institute, Chicago, IL........................    33
    Ms. Karen Kerrigan, President and Chief Executive Officer, 
      SBE Council, Vienna, VA....................................    37
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Asian American Hotel Owners Association......................    43


   THE ECONOMIC INJURY DISASTER LOAN PROGRAM: A VIEW FROM MAIN STREET

                              ----------                              


                        WEDNESDAY, JUNE 10, 2020

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:10 p.m., via 
Webex, Hon. Nydia Velazquez [chairwoman of the Committee] 
presiding.
    Present: Representatives Velazquez, Finkenauer, Golden, 
Kim, Crow, Davids, Chu, Evans, Schneider, Espaillat, Delgado, 
Houlahan, Mfume, Chabot, Balderson, Hern, Hagedorn, Burchett, 
Spano, Joyce, and Bishop.
    Chairwoman VELAZQUEZ. Good afternoon. I call this hearing 
to order.
    I want to thank everyone for joining us this afternoon for 
our Committee's first official remote hearing. I want to make 
sure to note some important requirements.
    House regulations require Members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, if you have to participate in another 
proceeding, please exit this one and log back in later. Please 
remember to remain muted until you are recognized to minimize 
background noise.
    Over the last few months, the outbreak of COVID-19 has 
meant an unprecedented public health crisis and a dire economic 
crisis. We have lost over 110,000 people to the disease and 40 
million remain unemployed.
    Back in February, as the pandemic was getting worse, we 
knew that we needed to take action to help our small businesses 
survive the economic downturn. We started working with the SBA 
and governors around the country to leverage the SBA's disaster 
resources available through the Economic Injury Disaster Loan 
Program, also known as EIDL.
    As the virus continued to spread, more states and local 
governments began enforcing stay-at-home orders and business 
closures. We quickly realized Congress needed to do more to 
meet the full scope of the problem, and that is when we started 
working on what ultimately became the CARES Act. To help small 
businesses and eligible nonprofits, Congress created the new 
Paycheck Protection Program, expanded eligibility to the EIDL 
program, and provided payment and interest relief for current 
SBA borrowers. I worked tirelessly to secure $10 billion in 
funding to create a new EIDL Emergency Grant Program which was 
designed to get money into the hands of struggling small 
businesses quickly. Borrowers could request a loan advance of 
up to $10,000 within 3 days of applying that need not be repaid 
even if the applicant was eventually denied the EIDL.
    Due to the unprecedented demand for the program, Congress 
infused another $10 billion into the Emergency Grant Program 
and an additional $50 billion in the loan program as part of 
the Paycheck Protection Program and Healthcare Enhancement Act. 
Congress also increased SBA funding for salaries and expenses 
to hire staff, upgrade technology, and ultimately, respond to 
demand in a timely, efficient fashion.
    Besides these steps, and more than 3 months after Congress 
first enacted legislation to provide economic relief to small 
businesses, borrowers are still facing significant challenges 
with EIDL grants and loans. For example, EIDL loans are 
supposed to have a maximum loan size of $2 million. We learned 
that SBA imposed a maximum loan size of $150,000, shortchanging 
millions of small businesses. Unfortunately, we also learned 
that SBA is limiting the crucial grants to 1,000 per employee. 
Some are not even receiving the grant at all which is simply 
unacceptable. This is one thing the positive impact this 
program could have for small businesses that need help the 
most.
    We have also heard that the SBA has not communicated 
effectively with applicants, nor has it provided them with 
reliable methods to check the status of their application. 
Applicants need to know where they stand in the queue to 
approximate how much longer they can expect to wait to receive 
financing. Given the current economic climate, if they are 
going to be denied, they deserve timely action so that they can 
explore options for capital elsewhere.
    These are just some of the reports the Committee has 
received with the SBA administration of the EIDL program in the 
COVID-19 era. As the Committee undertakes its oversight duties, 
we want to begin by hearing directly from small businesses who 
have applied for the program so that we can understand the 
successes and challenges they have experienced.
    However, in order to fully perform our work, we also need 
to hear from the Small Business Administration. Without their 
appearance and testimony before this Committee, it would be 
difficult to make additional changes to the agency's program. 
Earlier today, Administrator Carranza testified before the 
Senate Small Business Committee, and it is my hope that she 
will testify before us soon as well.
    With that, I look forward to hearing from our witnesses 
about their perspective on how Congress can keep working to 
improve the EIDL program and where we should focus our 
oversight efforts.
    I now yield to the Ranking Member, Mr. Chabot, for his 
opening statement.
    Mr. CHABOT. Can you hear me now?
    Thank you very much. Thank you, Madam Chairwoman for 
holding this important hearing relative to the SBA's EIDL Loan 
Program.
    Before I begin my comments though I would like to comment 
about the virtual format that we are having here today. And I 
certainly do not hold you responsible for this, but I think the 
speaker should have the House of Representatives in session. We 
have an awful lot of important work to do, obviously relative 
to small businesses, but there are so many other issues that 
the country is facing right now, Congress ought to be together. 
We represent the American people in dealing with these various 
challenges that our Nation has before us and we ought to be 
here.
    Now, I happen to be in Washington right now. I am in my 
office because I am also on the Judiciary Committee and we have 
a hearing going on as I speak relative to the tragic killing of 
George Floyd and the aftermath of that. I was there this 
morning. After I give my opening statement I actually have to 
go back there because I will be asking questions shortly here.
    But again, I do not hold you responsible, Madam Chair. I 
think, you know, it is commendable, a tremendous job. I would 
prefer it if you were the Ranking Member rather than the Chair 
but, you know, we both exchanged those positions on occasion 
over the years, and I think you do a great job. But Congress 
should be in session and I cannot emphasize that strongly 
enough.
    Relative to the EIDL Loan Program, it operates within the 
SBA's Disaster Loan Program and it was already up and running 
as we know long before the COVID-19 swept across the globe. It 
is important to note that the SBA's Disaster Loan Program has 
had its trouble in the past, but it was consistently making 
improvements. It was supposed to be a regional program that 
provides assistance to small businesses after a disaster. 
COVID-19 has presented numerous challenges to the program. The 
economic downturn caused by the Corona virus crisis has 
completely overwhelmed the EIDL program. As the crisis 
unfolded, the lines of communication from the SBA to businesses 
about the EIDL program unfortunately has deteriorated.
    Additionally, the total loan amount and the grant amount 
available in the program continued to be uncertain. These 
hurdles and roadblocks have impacted a small business's ability 
to make important and critical decisions during these uncertain 
times. Thus far, the program has provided assistance to over 1 
million small businesses all across the country to a tune of 
approximately $80 billion.
    In my home state of Ohio, for example, it has provided over 
25,000 loans for a total of $1.7 billion. Today, communication 
is slowly improving but certainly, more work needs to be done, 
and I commend you, Madam Chair, for holding this hearing in 
order to assist us in getting that job done and sending letter 
to the SBA that they just have to improve. We obviously sent 
the letter together in a bipartisan manner just recently urging 
the SBA that they have a lot of things they have to improve on.
    It is critically important that we have this discussion to 
understand how small businesses have fared during this crisis 
and how Congress can work to make improvements. Throughout this 
entire crisis, I have joined dozens of my House colleagues on 
conference calls and town hall meetings and a whole range of 
calls and conference calls with small businesses in their 
districts. Questions on the EIDL program were raised on a great 
many of these calls. Now, obviously, their principal interest 
was in the PPP, the Paycheck Protection Program, but the EIDL 
Loan Program is still there and dramatic improvement is needed.
    Congress has worked in a bipartisan manner to improve the 
Paycheck Protection Program. We must now work together to 
ensure that the EIDL program is operating efficiently and 
effectively for small businesses during this pandemic and 
following it. I look forward to discussing solutions and next 
steps with all of our witnesses today. It is important that we 
move forward with practical reforms that deliver for small 
businesses in my district and your district and districts all 
across the country.
    And Madam Chair, I mentioned that following my opening 
statement I have to go back to the Floyd and Judiciary 
hearings, so I will be heading over there. I am not sure if I 
will be back in time for the question part, but I want to thank 
you for holding this hearing, and I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
    Unfortunately for you, you might have to wait a little 
longer.
    Mr. CHABOT. Okay.
    Chairwoman VELAZQUEZ. To go from ranking to Chair.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness gets 5 minutes to provide a 
statement, and each Committee Member will have 5 minutes for 
questions. Please ensure that your light is on when you begin 
speaking and that you return to mute when finished.
    With that, I would like to thank our witnesses for taking 
time out of their busy schedules to join us.
    With us today we have Ms. Nancy Sexton, the Owner of the 
Muse Rooms, a co-working space in the Los Angeles area. After a 
career in the Arts, she conceived her co-working business in 
August of 2015 and taught herself how to write a business plan 
to get started. In just 4 years, her business successfully grew 
into two locations right before COVID-19 struck. She applied 
for an EIDL but encountered many of the challenges that have 
been reported with the program. Ms. Sexton, thank you for 
joining us today and for sharing your experience.
    I now would like to recognize the Vice Chairman of the 
Committee, Mr. Evans, to introduce our second witness.
    Mr. EVANS. Thank you, Madam Chair. I like the sound of 
that.
    Mr. Jerome Whack is a pharmacist and an owner of Christian 
Street Pharmacy located in the diverse neighborhood of South 
Philadelphia. He has owned and operated the pharmacy since he 
graduated from pharmacy school 33 years ago. Mr. Whack is a 
lifelong resident of Philadelphia where he attended two of my 
district's many excellent colleges, Temple University and the 
Community College of Philadelphia, my alma mater. I could not 
ask for a greater representative for my district to speak to 
the Small Business Committee on this important topic. I commend 
your commitment to serving and supporting the amazing citizens 
of Philadelphia and thank you for participating in this 
hearing.
    I yield back to the Chairwoman.
    Chairwoman VELAZQUEZ. Thank you, Mr. Evans.
    Now I would like to recognize Mr. Schneider of Illinois to 
introduce our third witness.
    Mr. SCHNEIDER. Thank you, Madam Chairwoman.
    It is my great pleasure to introduce my constituent, Dr. 
Craig Gerstein, and to thank him for sharing his perspective 
with us today. Dr. Gerstein lives in Highland Park and has 
practiced ophthalmology in the Chicago area for the past 20 
years. I will share that story a little bit in a bit, in a 
moment. He runs the Gerstein Eye Institute jointly with his 
father, Melvin, who started the practice more than 50 years 
ago. Dr. Gerstein earned his medical degree from the Chicago 
Medical School. In addition to his practice, Dr. Gerstein also 
serves as an assistant professor of ophthalmology at 
Northwestern University Medical Center. I have known Craig for 
many years and appreciate him sharing his perspective as a 
small business owner navigating both the complexities of this 
pandemic, but also the challenges he faced with his EIDL loan. 
Thank you for joining us today, Craig.
    Chairwoman VELAZQUEZ. Thank you, Mr. Schneider.
    Now I would like to turn it over to Mr. Bishop to introduce 
our last witness.
    Mr. BISHOP. Thank you, Madam Chairman.
    Our next witness is Karen Kerrigan. Ms. Kerrigan is the 
president and chief executive officer of the Small Business and 
Entrepreneurship Council, also known as the SBA Council. Ms. 
Kerrigan has multiple decades of advocating for small 
businesses and the entire small business ecosystem. With an 
expertise in startup funding and business growth, Ms. Kerrigan 
serves on numerous boards and coalitions. Ms. Kerrigan, 
welcome.
    And Madam Chairman, I yield back.
    Chairwoman VELAZQUEZ. Thank you.
    Now I would like to recognize Ms. Sexton for 5 minutes.

STATEMENTS OF NANCY SEXTON, OWNER, THE MUSE ROOMS NOHO; JEROME 
WHACK, OWNER, CHRISTIAN STREET PHARMACY; DR. CRAIG H. GERSTEIN, 
 ASSISTANT PROFESSOR OF OPHTHALMOLOGY, NORTHWESTERN UNIVERSITY 
  FEINBERG SCHOOL OF MEDICINE, GERSTEIN EYE INSTITUTE; KAREN 
  KERRIGAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SBE COUNCIL

                   STATEMENT OF NANCY SEXTON

    Ms. SEXTON. Thank you, Madam Chairwoman, and the entire 
Committee on Small Business for asking me to come here today 
and share with you the challenges that I faced when applying 
and receiving the EIDL loan.
    And like she said, my name is Nancy Sexton and I own and 
operate The Muse Rooms. It is a co-work ing space in North 
Hollywood in California. I am not from L.A. I was born and 
raised in Ohio. I lived in New York for almost 12 years, and I 
lived in Italy for 4. I have had a lot of great accomplishments 
in my life, but outside of marrying my husband, nothing has 
made me prouder than opening The Muse Rooms.
    Now, just so you know, The Muse Rooms is a working space, 
and we provide a workspace for entrepeneurs, creatives, and 
small businesses. We offer desk space, offices, and meeting 
rooms.
    The Muse Rooms started with my idea in August of 2015, and 
within 3 months we opened. We were so successful that that 
summer we decided to open our second location in Burbank. And 
then we were able to go back and expand our first location, and 
within 4-1/2 years, we have expanded to 14,000 square feet with 
over 120 members.
    The COVID hit. We shuttered our doors on March 17th prior 
to Mayor Garcetti's stay-at-home order. And at this time we 
suspended our billing because how can you charge somebody if 
they cannot use your service?
    Then the SBA announced their loans, and then I worked with 
the LASBDC network to get all my ducks in a row to apply 
because there was a ton of paperwork that was required. On 
March 23rd, I started the EIDL loan process, and this is when I 
started uploading my documents.
    And over the course of the next 7 days, I was on hold for 
more than 25 hours and I had uploaded my application, I had 
faxed it, I had emailed it, and each time I was told, oh, no, 
no, no, you are doing the wrong thing. Until finally on the 
30th I was told, you have just got to go to this new portal. 
Super easy. It only takes 5 minutes. You do not even need 
documents.
    So I went to the new portal, and it was super easy. So 
easy, in fact, that I did not even get an email confirmation 
that I had applied. Now, I was smart enough to write down my 
loan number so that when I called back I had a point of 
reference. When I called, I mean, I was only told, look, these 
are the next steps. You are going to get an email to log into 
the portal. Then you are going to be able to talk to somebody. 
They are going to look at your documents and they are going to 
tell you how much money you are going to get. And it should be 
two and a half times your monthly bills.
    Now, remember, I am not making any money and my bills are 
stacking up. So on the 21st of April, I finally received my 
advance. It was only a grand because I do not have employees. 
And I was super psyched because my neighbor next door, now he 
had already gotten funded and he had received more than what he 
thought.
    So over the next 10 days I called several times wondering 
what was happening because nothing was being communicated. No 
emails. No letters. And when you call you get a different 
answer each time.
    Now, on May 1st, my credit was pulled, and I got really 
excited. I have got two landlords with their hands out. I have 
no income. I called. I get the same story. You are going to get 
an email. You are going to talk to somebody. You are going to 
submit loan documents. Do not worry.
    May 16th, I got that email. And when I logged in to see the 
amount that was being offered, it did not even cover one month 
of my expenses. So, I called, and I was told by the woman on 
the phone, she read a statement to me for people who were 
calling in requesting more money than what was being offered. 
And she told me this; that in order for all businesses to get a 
little money, they were limiting the amount distributed. And 
remember, this is when they were supposed to be giving up to 
150K.
    I was taken aback. I was pretty upset. I mean, I had no one 
to talk to. I could not call anybody and no one to plead my 
case to. So the SBA EIDL loan that I thought was going to save 
my business has now put me in a position that guarantees that I 
am going to have to close one of my locations. And I do not 
know how long that will last.
    The stress of COVID was bad enough. I mean, seriously. This 
SBA loan experience, 58 days of not knowing anything on top of 
COVID, this has been the most stressful period I have ever 
experienced, ever. It has been horrendous. My entire business 
is built on customer service. Good communication is king. And 
let me tell you, without that you are sending businesses into 
absolute chaos.
    And I thank you for my time.
    Chairwoman VELAZQUEZ. Thank you, Ms. Sexton. Your time has 
expired.
    Now we recognize Mr. Whack for 5 minutes.

                   STATEMENT OF JEROME WHACK

    Mr. WHACK. Hello. Can you hear me?
    Chairwoman VELAZQUEZ. Yes, we can hear you.
    Mr. WHACK. Thank you for the opportunity to testify before 
your Committee today. And I do apologize for the problem I am 
having with my camera. I am very computer illiterate. My son 
set this up, and of course today it is not working. It worked 
last night. We did a dry run.
    But I would just like to thank you and to just basically 
highlight the testimony that I wrote, and I hope you have it in 
front of me.
    Very quickly, as Congressman Dwight Evans stated, I am a 
longtime resident of Philadelphia, Pennsylvania. I came here 
very young, as an infant, with the great migration from the 
South. My folks were from South Carolina. They left after my 
father got out of the Navy, after World War II, and came to 
Philadelphia. He wanted to have a better life for me and my 
other seven brothers and sisters.
    I have been here at Christian Street Pharmacy since about 
1987, and over the years this area has changed tremendously. 
When I came down here it was known for, the word was ``moral 
hazard.'' They would not even give me insurance on the building 
because it was predominantly Black and redline.
    Fast-forwarding to 2020, it is about 90 percent White. It 
has been gentrified by what I call landlocked. I have CVS two 
blocks away from me, Rite-Aid four blocks away from me, 
Walgreens two blocks away from me, and I am still in the 
process of holding on to the clients that I had prior to this.
    Pharmacy unfortunately is a very narrow profit margin 
business today with the competition that I just stated to you. 
It is very difficult normally with the very low rate of 
reimbursement. It is particularly hard with the copays. Many of 
the people that I serve are poor. They are part of the 25 
percent of the people that the Charitable Trust identified as 
being at or below the poverty level of Philadelphia, and yes, 
most of them look just like me and Dwight, Congressman Evans.
    So what we do characteristically, and we have been doing, 
is we have been giving free deliveries, and we run what they 
call tabs. Folks who do not have the copays to cover their 
medicine, we show it and they are able to access their funds 
the first of the month with Social Security or whatever 
insurances they have, they will come and straighten their tab 
out.
    Well, in view of what has happened in the country with the 
COVID-19 crisis, many of these people are very financially 
strapped. They are unable to pay their copays, and for the most 
part we have had to eat it. When I say ``eat it,'' we forgo the 
copays and still continue to fill their prescriptions and we 
are operating at a loss. The profit margin for an independent 
retail pharmacy in today's climate according to the National 
Committee of Retail Pharmacists is around 3 to 5 percent. So a 
very, very narrow profit margin. And when you couple that with 
the loss of copays, the fact that the PBM, pharmacy benefit 
managers, like Medco, CVS Caremark have for some reason slowed 
down. I do not know why. Slowed down on the reimbursement. It 
is like being caught in a three-way street. You cannot get your 
copays. You are not being properly reimbursed. And on top of 
that, I was turned down for the SBA loan. So it is a matter of 
trying to stay afloat and navigate through these very difficult 
times.
    To give you a quick, quick kind of summary of what I am 
saying, a small pharmacy bills up to say 50 prescriptions a 
day. A medium pharmacy is between say 100 and 200 prescriptions 
a day. A high-volume pharmacy would be showing greater than 200 
prescriptions a day. So what that means is, let's make it 
simple. If you filled 50 prescriptions a day at the lowest 
copay, $2, potentially, you could lose $100 a day. This is, you 
know, over and above the other cash crunches that you are 
dealing with.
    So it has put me in a pretty hard position this way, not to 
mention the kinds of expenses that you need just to operate. 
Philadelphia Electric Company, Philadelphia Gas Works, the 
water, Verizon, and the like.
    Can you hear me?
    To let you know, it has been very difficult. I did go 
through the process to apply for the SBA loan, and I had great 
difficulty. It took me like a couple weeks roughly, and then 
they started to advertise that you could go to your local bank. 
They have some kind of portal or some kind of mechanism to go 
through the bank and apply for the loan. And finally I did that 
one evening. I believe it was on the weekend.
    So basically, it has been a challenge, and I do ask the 
Committee members if you would kindly look into the reason that 
SBA is utilizing a credit check too either deny or allow 
someone to receive an SBA loan.
    Thank you so much.
    Chairwoman VELAZQUEZ. Dr. Gerstein, can you unmute?
    Dr. GERSTEIN. Yes, I am on mute.
    Chairwoman VELAZQUEZ. Okay, please, you are recognized for 
5 minutes.
    Dr. GERSTEIN. Thank you.

               STATEMENT OF DR. CRAIG H. GERSTEIN

    Dr. GERSTEIN. Madam Chairman and members of the Committee, 
thank you for inviting me to speak today regarding my 
experience with the SBA in respect to the EIDL program.
    First, I would like to introduce myself. My name is Dr. 
Craig Gerstein. I am an ophthalmologist who has been in private 
practice on the Northside of Chicago for the past 20 years.
    The pandemic's enormous disruption of my practice required 
that I needed assistance in order to survive. It was at that 
time I listened to a webinar on small business resources hosted 
by Congressman Schneider. On that call, a representative of the 
SBA detailed the EIDL program and the application process. I 
spent most of that evening locating the necessary forms, and 
the next day, on March 24th, I began the process to apply for 
the loan. Despite several crashes of the website and countless 
hours waiting on the SBA help line, I was able to complete my 
application 13 hours later.
    Subsequently, I received an email from the SBA that my 
application had been received and another email saying that my 
application was under review. Throughout the following 3 week 
waiting period, I called the SBA help line to ask questions, 
only to be told that my loan was pending and in 3 weeks a loan 
officer would contact me regarding my approval and discuss the 
amount I needed and could borrow.
    Three weeks from the date of my complete application, the 
status on my portal changed from pending to please reapply to 
complete your self-certification. After following the required 
instructions and submitting my application online, I was being 
told 3 weeks later to reapply.
    I completed the new self-certification form hoping that it 
was an addendum, but then I received a new application number. 
I immediately called the SBA help line trying to figure out why 
I had two numbers. I was concerned that I was going to lose my 
position in line as the loans were said to be a first come, 
first serve basis. The help line representative was unable to 
explain what had happened. I wrote a detailed email to the SBA 
customer service and never received an answer to my question. 
Instead, I received a response that directed me to three 
options: either connect to the website application page, call 
the help line, or write another email.
    After weeks of waiting in uncertainty, the SBA could 
provide no answers and left me in a helpless position. I could 
not use the website which had been removed. The help desk had 
no answers and could not address my concerns. And the email 
service offered nothing but an automatic reply. In desperation 
I continued to send several emails, and I contacted Congressman 
Schneider's office for help in navigating this situation.
    While the congressman's office attempted to get information 
from their SBA liaison, I once again called the help line 
almost 4 weeks out. At that time, the SBA representative 
explained that the loan applications submitted prior to the 
newest version of the CARES Act were disregarded and that 
individuals needed to reapply. I finally received an email 
response from the Disaster customer service on April 25th that 
simply stated you had to reapply because SBA developed a new 
streamlined application process, and those who applied before 
had to reapply. I received this notification as the SBA ran out 
of funds from its first round of applications, and thus, shut 
down their application process. I was left unknowing if my 
completed application that had once been ``processed'' would 
ever be considered and what having two applications meant for 
my position in line for the loan.
    Uncertainty kills small businesses, and this placed an 
extreme pressure on my practice. We do not have the luxury of 
time. Invoices, rent, utilities, health and malpractice 
insurance payments, and the salaries of my staff continue to 
accumulate with no realization on how I would be able to cover 
those expenses. I needed the information and loan details that 
would have allowed me to decide to keep going or to close up 
shop, decisions that needed to be made in real time with 
concrete answers. Unfortunately, hope does not pay the bills 
and put food on the table.
    Fortunately, after 6 weeks I received an email notification 
that I was approved for a loan, yet I was not given the 
opportunity to discuss the amount distributed. I accepted the 
loan and sent an email with documentation to support a greater 
need for additional funds but to this date I have not received 
an answer from the SBA.
    I hope my experience highlights while the SBA and the CARES 
Act were designed to aid small business needs, the lack of 
infrastructure and transparency surrounding the SBA contribute 
to stress that I and other business owners were experiencing 
during this economic uncertainty. The reality of the process in 
dealing with the SBA, and specifically, the EIDL program fell 
significantly short of what was promised with rhetoric and 
reassurances. I hope in the future there is more done by 
Congress to hold these loan programs accountable and to ensure 
that the SBA is able to properly allocate the needed funds and 
communicate to millions of small business owners during a time 
of great uncertainty.
    Thank you for allowing me the time to address this 
Committee.
    Chairwoman VELAZQUEZ. Thank you.
    Now we recognize Ms. Kerrigan for 5 minutes.

                  STATEMENT OF KAREN KERRIGAN

    Ms. KERRIGAN. Thank you so much, Chairwoman Velazquez. It 
is really an honor to be here today. Let me thank you for your 
leadership of the Committee and everything that you and the 
Ranking Member and all the Committee members are doing to help 
small businesses during this very, very challenging period. We 
appreciated your early work in getting information out about 
what needed to be done to change the PPP program. Obviously, 
all of the members of the Committee and you listen to small 
business owners, and we are just so pleased that the Paycheck 
Protection Program Flexibility Act is now the law of the land. 
It is going to help a lot of small businesses, but we continue 
to work to make even more improvements because there is a lot 
more that needs to be done.
    As a membership organization with 100,000 members 
throughout the country and being around now for over 25 years, 
when I listen to Craig and Nancy and Jerome, I am hearing the 
members, the stories of my members as well. I mean, what they 
went through in terms of the program mirrors everything that 
our members have gone through. And as an organization, again, 
that has worked with the Small Business Administration for the 
past 25 years on a lot of its programs, its education, training 
programs, special initiatives, we do not take any pleasure in 
pointing out the problems and challenges with the EIDL program. 
And all of us knew that the SBA had a heavy and unprecedented 
lift in launching this program. We at SBE Council and all the 
other small business advocacy organizations that we work with, 
we understood that there was going to be massive demand for 
capital in the small business community but limited funds 
available, especially in that first tranche of money where the 
EIDL program really leaves a very, very, very small amount.
    And even given many of the challenges in execution and 
communication, our members in small businesses that eventually 
received funds are grateful for this needed capital. But as you 
well know, there are many small businesses that got lost in the 
queue that did not receive funds when they needed it or 
expected it. And of course, were surprised by the dollar limit 
placed on the maximum loan amount and the per employee advance 
limitation.
    As I expressed in my written testimony, we believe that a 
fair amount of this angst experienced by small business owners, 
including our witnesses today, about the problems, the 
communication that was generated by the program really could 
have been avoided through transparent and immediate 
communication about these changes.
    On paper and as advanced by Congress in the CARES Act, the 
EIDL loans were ideally suited for many types of small 
businesses. Business owners and entrepeneurs were pleased to 
see a program pass Congress that would meet their immediate 
capital needs, provide some flexibility in using these funds, 
and would, as advertised, deliver this capital with speed. 
EIDL's breakdown as communicated by our members, small business 
owners across the country and, of course, our witnesses today, 
was and continues to be very sad to hear. Most small business 
owners were obviously shocked by the effects of COVID-19, and 
just the dramatic actions that happened afterwards, the plunge 
in demand and revenues, and they were desperate to identify 
sources of capital that could act as a bridge to their 
reopening. These areas of concern as noted by our written 
testimony included the lack of information about application 
status, hearing no communication from the SBA for long 
stretches of time, the shrinking advance based on employee 
numbers, the much smaller loan cap than advertised by the 
program and provided for by the CARES Act, confusion about how 
loan amounts were determined by the SBA, and then, of course, 
eventually them being shut out of the program due to the 
agricultural window that was established.
    So no doubt this crisis has been like none other, and 
unfortunately, many small businesses needing help through the 
EIDL program experienced these frustrations with the program 
when every minute of your time was valuable. Focusing on 
productive work and activity that would carry them through the 
shutdown period and on to recovery.
    Chairwoman VELAZQUEZ. Thank you, Ms. Kerrigan. Your time 
has now expired.
    I want to really thank all of the witnesses for everything 
that you have shared here with us.
    I will start by recognizing myself for 5 minutes.
    Dr. Gerstein, I understand that you were drawn to the EIDL 
program by the $2 million maximum loan size and that you were 
disappointed to learn of SBA's $150,000 cap. I understand the 
unprecedented demand for the program and for SBA to make some 
difficult decisions, but they must still be operating according 
to the law. Can you share with us how the smaller loan amount 
has affected your business?
    Dr. GERSTEIN. Yes. Thank you. Thank you, Madam Chairwoman.
    I will tell you, the first issue is the continued 
uncertainty. Many of us did not even know if we were going to 
get any money at all, and then we were counting on at least 
being able to communicate with someone what type of needs we 
had and how that loan was going to eventually help us. The 
$150,000 that I was granted was barely enough to cover my 
expenses for a month. And at this time, I am still not 
operating at 100--not even close to my normal pre-COVID level. 
In fact, for the last 2 months we have been seeing maybe 15 
percent of my normal patient volume, and we were not operating 
until approximately about 3 weeks ago. So to not know what is 
happening and then finally just to be given a certain amount of 
money with no answers, with no recourse to try to appeal, 
really kind of sets me as a small business--now I have to 
explore other avenues. Now I am starting from the beginning 
again trying to look at different aspects that I can get 
capital in order to maintain my business.
    Chairwoman VELAZQUEZ. Thank you, Dr. Gerstein.
    Ms. Kerrigan, I agree with you that we probably need to do 
more. We might have to do another relief package. We do not 
know how this program has worked. We do not have any data. 
There are no explanations that have been provided to us as to 
the decisions that were made, like changing the loan size from 
2 million to 150,000. Then like Dr. Gerstein and Ms. Sexton 
explained, they were not able to get any answers, any 
information as to the status of their loan applications. Do you 
agree with me that as Members of this Committee, we cannot move 
to make any other changes or expand the program without the 
administration coming before the Committee and providing the 
information that is required for Members of Congress to do our 
job, and that is oversight, and that is to get to the bottom of 
what happened so that might require us to make some legislative 
changes?
    Ms. KERRIGAN. Well, I agree totally. We need that 
information, that data from the SBA. And we need what went into 
the decision-making in terms of going off course from what was 
actually in the CARES Act. And yes. I mean, in order to do your 
job, it would be great if we had more money. It would be great 
if we could make those small businesses whole that did not 
receive the $10,000 grant as they were promised, and perhaps 
more money can be provided for that. But yeah. I think 
taxpayers, the American public want you to have as much 
information as possible. Data, feedback in order to know what 
is the path forward with this program absolutely is critical, 
critical, critical.
    Chairwoman VELAZQUEZ. Thank you so much.
    Mr. Whack, would it be helpful for applicants if SBA 
clearly communicated its credit minimum so applicants would 
know exactly where they stand prior to applying for a disaster 
loan?
    Mr. Whack?
    Mr. WHACK. Can you hear me?
    Chairwoman VELAZQUEZ. Yes, now.
    Mr. WHACK. Okay. I think that would be a good first step 
because in addition to waiting like a couple weeks to be able 
to get onto the website, you are in such a state of anxiety not 
even knowing if you are going to be approved. And when they did 
give me a response, that was also not that great. It took them 
like almost a month later to give me a response and then it was 
kind of vague. I mean, unsatisfactory credit did not really 
mean a lot to me. I mean, is 600 the cutoff? Is 400? I mean, 
what was it? And was there something I could have done perhaps 
in filling out the application that would have made me change 
the way that they looked at the application?
    Chairwoman VELAZQUEZ. Thank you, Mr. Whack.
    My time has now expired.
    Now I recognize Mr. Balderson for 5 minutes.
    Mr. Balderson?
    Mr. BALDERSON. Thank you, Madam Chair. I am sorry, you cut 
out there, so I did not hear my full name there, so I 
apologize.
    Thank you, everyone, for being here.
    And my first question will be for Ms. Kerrigan. Thank you 
for joining us today.
    My question is, as you know all of us here are too aware 
this has been a devastating time period for our Nation. Small 
businesses have been forced to severely reduce their 
operations, or in many instances, sadly, have had to close 
their doors.
    I have been in constant communication with small business 
owners in my district around the many challenges they face 
during this time, and something these constituents routinely 
bring up is also something you have highlighted in your 
testimony: access to capital now and in the near future.
    From the research done by the SBE Council and your own 
perspective, how have the fairly funded programs benefitted 
American small businesses?
    Ms. KERRIGAN. They have benefitted some. I mean, there have 
been a lot of small businesses who have not been able to 
benefit from these programs. I mean, if you look at the PPP 
program, for example, when it first started it was those that 
were largely, you know, connected to their banks and to their 
financial institutions. I think more banks came online, 
community banks, credit unions. And even the addition I think 
potentially of Fintech, you know, the big Fintech companies, 
there is like a big difference in getting this capital to a lot 
of those who did not have sort of that commercial banking loan 
relationship, you know, with their banks or with their 
financial institutions.
    So as the programs went on, both PPP and EIDL, they got 
better in terms of their communication and in terms of their 
funding. I think with the EIDL program, you know, it is a 
different animal because with PPP you do have many players in 
the private sector that are involved, right, with the 
distribution of that capital and more players involved, whereas 
the EIDL, it is the SBA alone. If we want to do something like 
this moving forward because, you know, it is apparent that the 
SBA did not have the capacity, the technology, the artificial 
intelligence, all of that needed to do this very, very rapidly 
and quickly. And that is what small businesses needed, whether 
it was PPP or EIDL was rapid access to capital. So, I mean, 
hopefully, we will not have an event like this moving forward, 
but we might, and we have got to be prepared for it. Given that 
we do have technology and all the innovation, I do not see why 
we cannot do this rapidly, more rapidly. And I think that is 
the big issue, is giving this money to businesses rapidly and 
being able to communicate with them so that they can make 
decisions about where they are going to be going forward and 
help them navigate which, you know, this recovery period.
    Mr. BALDERSON. Madam Chair, I yield back. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from Iowa, Ms. Finkenauer, 
for 5 minutes.
    Ms. FINKENAUER. Thank you so much, Madam Chair. It is good 
to see you and the folks on this Committee and the folks who 
have joined us to share their perspective and help us do our 
job on oversight here.
    You know, one thing that I have been focused on a lot 
during this pandemic is, you know, we passed these bills, the 
CARES Act getting signed into law where these dollars go to 
these agencies, but at the end of the day it is often up to 
these agencies of how they put these dollars out, what the 
rules and regulations are behind them. And it just underscores 
how important it is to do the oversight with these agencies and 
make sure that they are getting out to us maybe in the right 
way. So thank you, thank you, thank you, Madam Chair, for 
holding this hearing today, helping us do this the right way.
    We clearly, listening to testimony today, and then also 
hearing from my constituents throughout the 1st District in 
Iowa, have a lot of work to do when it comes to oversight with 
the Small Business Administration and how these programs have 
been rolled out, and also how they are moving forward here.
    So Dr. Gerstein, I actually, I would love to ask you a 
question. I Chair the Rural Development, Agriculture, Trade, 
and Entrepreneurship Subcommittee on the Small Business 
Committee, and something that our Subcommittee heard about when 
we held a discussion a few weeks ago was from a woman, Melissa 
Moretz Baker from my congressional district in Northeast Iowa 
who is also a farmer, and she said that many business owners 
did not have the information they needed to determine which 
Small Business Administration assistance program would work 
best for their business model.
    So how did you arrive at the decision to apply for the EIDL 
loan rather than the Paycheck Protection loan? And also, in 
hindsight, given that some of the challenges you faced in 
applying for your loan and your award being less than you 
needed, would you still have applied for the EIDL loan? And 
would you have applied for any other, or would you have applied 
for assistance at all given what you know now?
    And I will let you answer that part first, and then I have 
a follow-up for you.
    Dr. GERSTEIN. Sure. First, I will answer, having gone 
through the experience, I would not go through the experience 
ever again. It was traumatic. It was stressful. There was no 
communication. It took tons and tons and tons and tons of my 
time trying to educate myself and trying to figure out avenues 
to try to get answers. And I did apply for a PPP loan and I 
very consciously did not go through the SBA simply because 
there was no communication with the SBA and I did not want to 
start going down that road again of trying to get something and 
not being able to talk to somebody versus a bank where you can 
actually make a phone call and get an answer, to answer that 
part.
    The way I got the information was a town hall through 
Congressman Schneider's office. He kind of laid out certain 
different programming and that was the loan that seemed to 
promise the most. And that was the loan initially before the 
PPP was out, it was cast. So, and what really was terrifying to 
a small business, especially myself, was that constant reminder 
of this is going to be first come, first serve. So, you know, 
you knew, you could see the need was out there and you knew 
that you needed to get things done in order to get in that 
line. And that is where a lot of my stress came was because I 
was applying, and I did everything right. I hung in there just 
to get that application in only to fall into the abyss.
    Ms. FINKENAUER. I know we only have a few seconds left 
here, but what additional resources would have been helpful 
during that process from the Small Business Administration? And 
then also, now that you know what you know now, what would you 
hope they do moving forward here?
    Dr. GERSTEIN. Well, the two things I can say, and I am not 
an expert on running the SBA in any regard but I can tell you 
communication is paramount, especially with small businesses. 
We need to know where we are. We need to know when we can 
expect a decision to be made. And, I remember in the beginning 
I was very upset that I could not request the amount I was 
asking for. There was nowhere on the form to even say this is 
what my need was. And that was very stressful. The more 
transparency and better infrastructure to deal with the small 
businesses is what the SBA can do.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Ms. FINKENAUER. Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. Now we recognize the gentleman from 
Oklahoma, Mr. Hern, for 5 minutes.
    Mr. HERN. Thank you, Madam Chairwoman. And I know the 
Ranking Member had to leave for his other Committee, and I 
really want to thank the witnesses for being here today during 
these certainly difficult times.
    I always like to start out this way, but as a small 
business owner for over 35 years, I certainly feel the pain 
when we have these kind of disasters. In 35 years I have seen a 
few. Obviously, nothing as severe as what we are seeing now, 
and during these difficult times we are going to have stresses 
on our system, and we have seen those. And as we all know, the 
SBA has done about 20 years' worth of work in the last 12 
weeks. So, you know, this oversight is good. It gives us an 
opportunity to test the stress of our system, but we also want 
to thank the great work that all of us have done in a 
bipartisan way in getting the PPP loans out and the EIDL 
programs out because we all know that estimates are it saved up 
to 50 million jobs in America and, you know, we have got to be 
very concerned about what is getting ready to happen as we roll 
off of these loans.
    As some of you may know, the EIDL program has done over, 
you know, several hundred thousands in loans and upwards of $80 
billion in loan dollars. And in my state, it is about 7,200 
loans and almost a half a billion dollars in loans.
    As we work, I think Administrator Carranza is working hard 
to try to figure out and listen and the Chairwoman mentioned, 
she has been in the Senate side listening to the Small Business 
Committee there and I, too, would like for her to come back to 
our Committee to hear what we have to say as well as we go 
through our factfinding.
    Ms. Kerrigan, you talk about some of the shortfalls in your 
testimony and again, as a small business owner, I know that you 
cannot be successful by drawing on past mistakes. We are here 
to learn and move forward. Can we talk about solutions to these 
issues on these mistakes? And what are some of the solutions 
that you think the SBA could implement moving forward to 
perfect the EIDL program and thereby helping more and more 
struggling small businesses?
    Ms. KERRIGAN. You are absolutely right. This crisis was 
unprecedented and sort of the charge that was given to the SBA 
was unprecedented; right? And so we certainly understand that. 
And they have had their challenges over the years. They have 
had their successes over the year.
    I think the key one is communication. And as you heard 
through the testimony today and as we are hearing from our 
members, even if it is bad news, business owners want to hear 
it from the SBA in terms of we are not going to turn around 
your loan or you are not going to get the capital in 3 days as 
was promised; right? It is going to take longer. There is 
massive demand. Or we ran out of money or we are going to run 
out of money within a shortened period of time. So I think the 
more communication, you know, is better for small business 
owners because then, as you know, as a business owner, you can 
make decisions based on that; right? So more information is 
better.
    You know, I think the other thing with all these programs, 
and including PPP, Congressman, is that, you know, as the law 
is passed by Congress, that is how it has to be implemented by 
the agencies. Obviously, they should be given some discretion 
on things like Congress gives them, you know, but if the law 
actually says, you know, a $10,000 advance, or the amount, the 
max loan is $2 million, I mean, you know, the agency has to 
follow the will of Congress on this. And if the money runs out 
like that, then Congress can make the decision to fill the 
money again.
    But the other thing is also, again, in a perfect world all 
these programs would have rolled out at the same time, 
including the Main Street Lending Program because, you know, 
they match certain businesses. They align with businesses but 
that did not happen; okay?
    I think the other big pieces looking at this is what is the 
SBA, what is their capacity, and what are they capable of doing 
in this regard? And where do we need to call in the private 
sector and use financial technology? You know----
    Mr. HERN. Ms. Kerrigan, I only get one question before we 
run out of time here.
    Ms. KERRIGAN. Okay. I am going off.
    Mr. HERN. No, no, no, you are fine.
    You know, we talk about SBA. I think we know that, you 
know, a lot of government programs, standard programs, one size 
fits all is very difficult. Can you talk about, and you alluded 
to it a little bit a minute ago about what you think private 
industry could do to maybe facilitate should we see this kind 
of occurrence again, what private industry can do alongside the 
Federal government?
    Ms. KERRIGAN. Well, I think you saw the power of that in 
the PPP program where it was sort of like the traditional 
banking institutions, the financial institutions that were 
initially part of that, and it took a while for the Treasury to 
bring on Fintech; right? But once they did, this money moved 
very quickly and they were very small loans, $15,000, $20,000 
to the types of businesses that maybe the banks do not, you 
know, were not interfacing with and serving. So, I think they 
need to think forward. They need to be technology driven. And I 
think that is the same way with these programs as well in terms 
of these public-private partnerships. Bringing sort of the 
power of technology and looking at financial, you know, 
technology as a solution to all this. I really think it needs 
to be incorporated over at the SBA.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Mr. HERN. All right. Thank you.
    Chairwoman VELAZQUEZ. Now we would like to recognize the 
gentleman from Maine, Mr. Golden, for 5 minutes.
    Mr. GOLDEN. Thank you very much, Madam Chair. And you can 
hear me all right?
    Chairwoman VELAZQUEZ. Yes, we can hear you.
    Mr. GOLDEN. All right. I just want to make sure.
    Ms. Kerrigan, I wanted to ask a little bit more from you. I 
have been hearing from a lot of constituents in Bar Harbor and 
Auburn, Maine, who would like to use an Economic Injury 
Disaster Loan right now but they have been shut out of the 
application process because they are not agricultural 
businesses. I was wondering if any of your members have been 
finding themselves in a similar situation of late?
    Ms. KERRIGAN. Yes, absolutely. Absolutely they have. And 
you know, again, it is dispiriting. And I mean, we have farmers 
and members of the agricultural sector, small businesses that 
are part of the SBE Council. I think what the SBA wanted to do 
was to compensate, right, for them being shut out of the 
program earlier. But at the same time you are shutting out, you 
know, a whole slash, right, of the business sector, diverse 
businesses. And again, it goes back to, look, the program 
should be open to everyone. If it runs out of money, once we 
know the data, and once we know where we need to go then, you 
know, it can be refueled or refunded based on that. So yeah, 
that was sort of a little bit of the government picking winners 
and losers in the marketplace, although we love our farmers and 
our members who are farmers, for sure.
    Mr. GOLDEN. Yeah, certainly we do.
    You know, you were talking a little bit about implementing 
the program the way that it is drafted in statute and then, you 
know, if the money runs out, you come and you make that strong 
case for the back in the business community for more funding, 
similar to what we saw with the Paycheck Protection Program, 
although they obviously took a little leeway in the rulemaking 
process there as well but, you know, I had businesses, like an 
independent trucker, tourism businesses in my district reach 
out frustrated, feeling like they had experienced a bait and 
switch when the EIDL was both downsized in regard to the amount 
that they could receive for those kind of more capital-heavy 
businesses, but also when they were told that they were limited 
to $1,000 per employee on the grant side because that was part 
of the original reason why they were so interested in going 
after EIDL instead of pursuing PPP in the early weeks was 
knowing that that grant was going to be out there and they just 
wanted access to some revenue as quickly as possible.
    Ms. Sexton, I also wanted to recognize your frustration 
with the repeated delays that you experienced processing your 
EIDL application. I know in my office we heard from businesses 
all over the district who had a lot of similar experiences. And 
all of you have made the point about the importance of clear 
communication so that you can at least make informed decisions 
which is what I have been hearing and what my staff have been 
hearing from businesses here in the state of Maine. Often it 
was waiting many weeks, you know, that was the most disturbing 
because it delayed them from making other potential decisions 
and pursuing other means of surviving through this. It is not 
to say that these were not important programs and that they 
have not worked to help businesses, you know, when they have 
worked smoothly. But I just want to acknowledge the frustration 
that you have all shared and thank you for sharing it with us. 
I think the key point there is, as you have all said, 
communication not only between SBA and the Committee in 
Congress but also SBA and the ultimate client, which is the 
small business community. So thanks for taking part in this 
today and sharing that. I have no doubt that the SBA is 
listening to your testimony today and making note and that they 
are going to be engaging with their clients, the business 
community, and the lenders out there for feedback on how they 
could improve these programs going forward.
    With that I would yield back, Madam Chair.
    Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
    Now we recognize the gentleman from Tennessee, Mr. 
Burchett, for 5 minutes.
    Mr. BURCHETT. Am I unmuted? Can you all hear me? Okay, 
great.
    I have heard from everybody, and I appreciate everybody for 
the excellent testimony given. I also wanted to welcome new 
member Mr. Mfume to the Committee. I have watched him from afar 
and I am looking forward to getting to know him.
    I have heard what has gone wrong, and I have actually heard 
all those complaints from my constituents. And I am wondering 
if each of you all could briefly tell me what has gone right in 
what we have been trying to do. Maybe we can amplify some of 
that.
    And I will yield to the folks.
    Ms. KERRIGAN. Well, I will start that, Congressman, and say 
for the businesses, the small businesses that were able to 
access the EIDL money, they are very grateful for that support, 
for that capital. I think with the PPP program, it was really 
good to see the pivot that was made on that in terms of making 
the modifications and changes that would make the program 
flexible, practical, and relevant, you know, for small 
businesses, particularly given, you know, the extension of the 
shutdowns and what was happening on the ground. From our 
perspective, we would have loved those PPP changes to come more 
quickly, but they happened and that is good. So you all were 
listening to small businesses and you made those changes. And I 
think that needs to happen over at the SBA, too, but again, 
this is a whole different program and I do think now Congress 
needs to look forward and say, you know, is this something that 
SBA should be doing as an agency? And do they have the capacity 
to do that? But, look, for the businesses that got the money 
because of the early intervention and the tax credits and all 
those other things, those are making a big difference for small 
business.
    Mr. BURCHETT. Any of the others?
    Dr. GERSTEIN. Yeah. What I would say is what was done right 
was that Congress definitely, there was an emphasis on helping 
small business. It was not just helping individuals. It was 
really an attempt to help small businesses out there that were 
through no fault of their own were shutting down or operating 
at very limited capacity. Unfortunately, what seemed like a 
great idea and the execution did not match. And the frustration 
was listening to the promises and being excited about the idea 
and then the reality really of not being able to access the 
funds or not get your questions answered. But the intent was 
there.
    Ms. SEXTON. Now, I could say that for me what went right 
was unfortunately very little. What did go right was my ability 
to react very quickly when I saw that SBA dropped the ball. We 
started a Go Fund Me campaign which actually that is what saved 
me. The SBA money helps, sure, and I got a little bit of PPP 
but, I mean, I feel like giving PPP back because how am I 
supposed to pay that back? It is over 2 years. I mean, it puts 
a burden on me more than it is helping me. So, and look, I do 
not want to be complaining. I hear your question. What it did 
right was once I did get approved my loan was delivered very 
quickly. That was right. But I am sorry; they got so much wrong 
I do not really, at this point, I am so frustrated what they 
got right is kind of irrelevant.
    Mr. BURCHETT. Thank you.
    Any others?
    Great.
    Chairlady, thank you so much. I yield back the remainder of 
my time.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from California for 5 
minutes.
    You need to unmute.
    Ms. CHU. Thank you.
    Ms. Sexton, as a congress member representing Los Angeles 
County, I thank you for sharing your experience as a Los 
Angeles business owner, a sole proprietor, and a former 
creative professional. It is clear from you and the other 
witnesses here today that SBA's administration of EIDL has been 
unacceptable at a time when small businesses need this really 
more than ever. I also imagine that many of your clients are 
also self-employed individuals working in creative fields like 
the music industry. And like you, the sole proprietor, self-
employed, and independent contractors constitute a significant 
part of Southern California's economy, and they have been 
adversely impacted by the SBA's cap on EIDL emergency grants of 
$1,000 per employee. This cap is just not reflective of the 
congressional intent and hurts individuals like you who despite 
not having employees have high overhead costs like thousands of 
square feet of leased property.
    So can you describe the impact the SBA cap on the emergency 
grant has on sole proprietors, self-employed, and independent 
contractors like you and your clients, and give us some sense 
of the unique burdens that these type of workers are facing 
during the COVID-19 crisis? And also, you described so many 
problems getting this emaciated loan. What would you do, what 
would be your top priority and things that need to be changed 
in the EIDL program?
    Ms. SEXTON. Well, thank you. Thank you, Congresswoman.
    Those are tricky questions a little because there are so 
many. You know, out of 120 members, we have got like 60-70 
people who have their own businesses; right? And so right away 
one of the things that I did was, because I had so much access 
to small business assistance because I am so heavily involved 
in the Chamber of Commerce and working with a lot of different 
organizations, I was able to put a resource page together on my 
website to assist my membership. And a lot of the people were 
just frustrated. They would call me with the same frustrations 
that I was having, and then I would be calling my contacts, 
especially those from the LASBDC, who were fantastic by the 
way, and asking them to help me understand what was happening. 
But quite honestly, things changed so fast in the law, or I 
mean, not in the law, in the application process that even the 
industry, even the organizations that were helping us try to 
understand what was happening, they could not keep up. And so 
what happened was, when you would be getting an answer from 
somebody and have already heard that it changed, and then you 
would just be frustrated going, like man, where are you? Why 
are you not keeping up with this? Why is this burden on me? But 
my whole idea was, like, look, if I can keep these people in 
their positions, and if I can keep them working and keep them 
getting money, then I can keep my business; right? I mean, 
because that is what I do. I provide a workspace for them.
    The frustration falls in the lines of just general stuff. I 
mean, lack of communication, not knowing what was happening. 
Some people were not smart enough to write down that loan 
number and 19 what? And then they would call people and the 
operators were misinformed giving bad direction to people on 
what the next steps were. And then it falls onto, you know, 
look, it falls onto looking for other money. And the PPP for 
me, because I do not have employees, is whatever. You know? I 
mean, you look at that and I am super organized. I have 
everything ready and then I get nothing.
    And so I think the biggest thing quite honestly that the 
SBA could do is just communicate. Be honest with people. I need 
to know what I have to do because, and I believe the other 
gentleman, Mr. Gerstein said that, like, our bills are stacking 
up. We have got rent to pay. I mean, I can extend it. Sure, I 
can postpone payments but that does not mean they are going 
away. So what am I supposed to do, you know? And so I really 
thought the EIDL loan, like I said before, I really thought it 
was going to save us. I really did. I mean, man, I was hoping 
on that. And now I am like, if it was not for my Go Fund Me, I 
would be out of the game. I would have to shut completely.
    Ms. CHU. I appreciate the fact that you talk about the 
SBDCs in such a positive way.
    Ms. SEXTON. Yep.
    Ms. CHU. And it seems to me that if the SBA is overwhelmed 
in terms of being able to answer back to these loan applicants, 
why do they not deputize the SBDCs to inform people on the 
status of the loans?
    Ms. SEXTON. I would agree that that would be an awesome 
idea.
    Chairwoman VELAZQUEZ. Okay. The gentlelady's time has 
expired.
    Now we recognize the gentleman from Florida, Mr. Spano, for 
5 minutes.
    Mr. BISHOP. Madam Chairman, I do not see him on the call 
any longer.
    Chairwoman VELAZQUEZ. He was just there.
    Okay. Now Dr. Joyce from Pennsylvania, you are recognized.
    Mr. Bishop from North Carolina, now you are recognized for 
5 minutes.
    Mr. BISHOP. Thank you, Madam Chairman. And I will say I 
greet you today from our Committee room, and it is wide open 
and empty, and I certainly invite others to join me here 
whenever you can.
    And I think, too, Mr. Whack, in particular, it has been a 
bit of a disadvantage and I apologize to you for the 
difficulty, sir, that you have encountered. It may be if this 
is the only way that you could appear before the Committee, 
then that would be better than not being able to appear, but I 
certainly wish that we had been able to just have you come in 
and sit down and not struggle over things like that.
    I wanted to ask, and I guess I am trying to pick who, but I 
was listening to the conversation, it seems to me in order for 
this enterprise to be productive, we probably need to get 
beyond frustration to diagnosis and make an accurate diagnosis 
of the problem. The obvious import of the hearing is to lay 
blame at the SBA, but I guess if Dr. Gerstein is still 
available, yeah, I see Dr. Gerstein, maybe I could ask you. I 
sympathize because I have heard it many, many times and I have 
actually experienced it myself. And when I first learned about 
what EIDL was going to be able to do, you have heard the notion 
of putting out a fire with a garden hose; right?
    Dr. GERSTEIN. Sure.
    Mr. BISHOP. And so if you have got something, put a 1-inch 
hose to put water through and you have got a big burning 
disastrous fire, you may not make much progress. You mentioned 
the uncertainty a lot of witnesses have and I find it to be 
difficult to deal with as well, but is it not an inevitability 
of the nature of the problem that we have, this nationwide 
flatlining of the economy with the shutdown orders of the 
entire economy, does it not seem to be that it would be hard to 
scale up a program that is designed for the spawn of a tornado 
or hurricane to be able to operate nationwide?
    Dr. GERSTEIN. I am certainly not an expert in any regard. 
If you want to ask me about eyes, I am more than happy to 
answer any question on that. But how to implement policy in 
Congress, I cannot explain what is the best thing. But what I 
can tell you is the idea of the SBA giving a little bit to 
everybody to try to quell the disaster is no different than 
coming into a room where 1,000 people are dehydrated and 
offering them all just little sips of water and hoping you are 
going to save somebody. It just did not do enough to enough 
businesses.
    Mr. BISHOP. Yeah, I got that point and it is a good point. 
And I just wonder if in the sense of your frustration that you 
experienced as you were going through this, was it, did you 
either back then or looking back at it now think that perhaps 
it was just an impossibility to take SBA's EIDL, normal EIDL 
program and suddenly scale it up so it could handle that sort 
of task? Did that go through your mind at all?
    Dr. GERSTEIN. Well, you know, part of the, you know, first 
come, first serve basis that was emphasized, which showed me, 
and I knew that there was going to be a lot of demand, so yeah. 
I knew there was going to be a lot of demand. I did not know 
that the infrastructure and the SBA was not going to be able to 
handle it in any regard. But yeah, I am not surprised by that.
    Mr. BISHOP. Ms. Kerrigan, and maybe if I follow it in the 
conversation I was just having with Dr. Gerstein, because you 
made reference to SBA sort of being able to scale up. You 
mentioned artificial intelligence. Is there some technical or 
technological solution that you believe exists that you could 
take a program like that, that it operated on the basis I 
suggested, and suddenly and accurately and with efficiency 
scale it up to be able to handle a disaster like this and just 
expect the agency to be able to do that?
    Ms. KERRIGAN. Well, like I said I think both on my 5 
minutes earlier and also in my written testimony that we knew 
this was going to be a huge lift for SBA because one is demand; 
right? We knew there would be a huge demand for this capital. 
And number two, you know, sort of the limited capital that was 
available. And I think, Congressman, that the reason why we did 
the PPP program was to alleviate; right? To alleviate; right? 
So that was sort of the sister program of like, okay, lets get 
the financial institutions involved. But they were two 
different programs, Congressman. You know, you had one that was 
like for, one was very restricted, 8 weeks to use the money as 
opposed to EIDL which was 6 months. So.
    Mr. BISHOP. Let me interject because I have just got about 
30 seconds left, I think.
    I think your point is well taken, Ms. Kerrigan, and Dr. 
Gerstein, and the other witnesses. And I wish Mr. Whack was on. 
I think it would be easier if I could see him. But I think 
really what we see is the PPP program being able to bring in 
the private sector to leverage the government is what made a 
relevant success for PPP. And that was not without frustration 
either.
    Ms. KERRIGAN. Exactly.
    Mr. BISHOP. And so I think it would probably be helpful to 
decipher what lessons we should be learning as opposed to just 
expressing frustration and leveling it all at the door of the 
SBA.
    Madam Chairman, of course, my time is expired. Thank you, 
Ma' am.
    Chairwoman VELAZQUEZ. Thank you, Mr. Bishop.
    Let me just say, I welcome you for using the Committee 
room, and I also want to thank the cleaning crew who will now 
have to go into the room and disinfect. I also want to 
recognize that many small firms are able to join us remotely to 
testify without undue costs for travel, and I am glad we are 
able to facilitate a discussion without burdening small 
employers.
    With that, let me recognize Mr. Evans from Pennsylvania. 
You are recognized for 5 minutes.
    Mr. EVANS. Thank you, Madam Chair, again, as usual.
    When the pandemic hit, business across the country were 
devasted financially, especially African American home 
businesses which declined 41 percent from February to April, 
the most of any racial group. As a comparison, White-owned 
businesses declined only 17 percent. Many Philadelphia small 
businesses have been struggling to make ends meet, which is why 
the Small Business Administration Economic Injury Disaster Loan 
is such a lifeline. Unfortunately, many of my constituents, 
including Mr. Whack, have been denied the EIDL loans because of 
unsatisfactory credit scores.
    Now, Mr. Whack, I am going to ask you three questions based 
on my time.
    Mr. Whack, what was your reaction when you received your 
denial letter from the SBA? Did SBA provide you any further 
details on your denial such as minimal credit score required? 
And then the CARES Act, Congress indicated that the SBA would 
use the application credit score or alternative methods to 
determine that applicant's ability to repay. Did SBA indicate 
that when it reviewed your application it used methods other 
than the credit score, Mr. Whack?
    Mr. WHACK. Can you hear me, Congressman?
    Mr. EVANS. Yes.
    Mr. WHACK. Part of what I have been [inaudible] long wait 
but when I finally did get a letter there was no other reason 
other than the unsatisfactory credit report, nor was there any 
way in that letter that I could have addressed that. I mean, 
how about if there was something in my credit history that I 
could have corrected or explained or whatever? It was just like 
something I thoroughly did not anticipate, and other than 
contacting your office I really had no alternatives. I mean, 
what was I supposed to do?
    Mr. EVANS. So they did not tell you in the CARES Act 
Congress indicated that SBA may use an applicant credit score 
alternative method. They did not say that to you; right?
    Mr. WHACK. I have never heard that. It was not stated, and 
I pay very close attention to the news, CNN, MSNBC, and other 
printed material, and I was following this to see that when I 
was going to apply I had everything that I needed to do this 
properly and I was just unprepared for this. That is the best 
way to put it to you. I had no notion that they were going to 
use your credit score as a basis for accepting or denying an 
applicant alone.
    Mr. EVANS. Mr. Whack, can you explain all the costs you are 
now paying yourself including unreimbursement from pharmacy 
benefits, when patients cannot afford their prescription?
    Mr. WHACK. As I stated earlier, it is particularly bad 
because pharmacy is such a difficult field now in terms of the 
HMOs, in terms of you need an inventory which means you go to a 
wholesaler. The wholesalers now are getting, they are 
ratcheting down. I mean, my competitor, CVS, Rite-Aid, they do 
not have wholesalers. See, I go to a middle person to purchase 
prescription drugs. Rite-Aid, CVS, they have their own 
warehouse. They go directly to Medco or SmithKline or whomever. 
They bypass this. And it has put me through a tremendous stress 
because now the wholesalers, when you fall behind in this 
industry, they put you on COD. Can you imagine trying to be COD 
with 1 week's invoices could be like $16,000, $18,000, $20,000? 
That is particularly stressful, and I have no real alternatives 
to deal with this. I mean, the wholesalers who supply us with 
the things we need to do our job are understanding but they are 
in business after all. They are not going to continue to extend 
courtesy or forbearance for any great length of time. That is 
the other part of my anxiety. I do not know at what point 
someone is going to call and say, listen, this is it. You 
cannot order anymore. What am I supposed to do then?
    Mr. EVANS. Real quick I need to, Ms. Sexton, you applied 
for the EIDL loan of SBA and received much less than you 
requested. Did the SBA explain why you received a lesser 
amount?
    Ms. SEXTON. Absolutely not. No explanations were given. You 
are literally just put in a position where you accept the 
amount and that is that. Yeah, it is a real problem.
    Mr. EVANS. I yield back, Madam Chairperson. I thank you, 
Madam Chairperson for your leadership on small businesses and 
everything you have done. So wherever you want to be, I am 
going to be there.
    Chairwoman VELAZQUEZ. Thank you. Thank you.
    Let me again call on Dr. Joyce from Pennsylvania. Is he on?
    Okay. Now we recognize the gentleman form Illinois, Mr. 
Schneider.
    Mr. SCHNEIDER. Thank you, Madam Chairwoman. And I want to 
thank the witnesses for sharing your perspectives and 
experiences. This is obviously a very difficult time for 
everyone but for small businesses in particular as the 
witnesses have highlighted so well today, the anxiety of trying 
to keep your doors open, trying to figure out how you are going 
to just make it through this and to overlay that as you have so 
eloquently shared with the uncertainty, it was wonderful.
    As you have attested very well, the SBA's Economic Injury 
Disaster Loan, the EIDL program is a vital lifeline for 
businesses in a crisis. It has been in the past and it should 
have been that during this COVID pandemic. But it only works if 
the SBA gets the money out the door. The program can be useful 
for businesses in planning for long-term future in the midst of 
a crisis and it is necessary and should have happened that we 
give these owners the information that they need like the 
status of their loan application, when they can get the money 
they are counting on, and allow them to make the difficult 
decisions if money is not going to be available.
    More than a month ago I wrote a letter with Chairwoman 
Velazquez joined by 100 members of the House to the SBA 
outlining our concerns with the EIDL program, calling for the 
SBA to create an application queue for new applicants and to 
provide the current applicants an update on their loan status. 
Unfortunately, these issues still remain unaddressed.
    Dr. Gerstein, I so appreciate you sharing your voice as a 
small business owner from our community here in Illinois, and I 
am glad that small business webinars that I and my team 
organized helped navigate the process and that our caseworkers 
could be a resource to you. But the detailed timeline you laid 
out, the long periods of no information from the SBA was not 
unique and was incredibly frustrating. I felt badly for what 
you were facing, and as you and I talked about we saw it with 
so many other businesses around our district. I cannot imagine 
what it was like living through this time as a business owner.
    As you have said and said very well, uncertainty kills 
businesses. Without updating the information on loan status, 
contrary to being a resource, the EIDL program, the way it was 
administered became a hindrance towards achieving long-term 
planning because business owners just did not know what they 
could rely upon.
    So if you would, please, can you just give two issues from 
your experience? As you were working through the process, you 
were also navigating the world uncertainty that comes from 
operating a business during a pandemic. How did the lack of 
information hamper your ability to make the long-term plans for 
your business?
    Dr. GERSTEIN. Well, it paralyzed us, quite frankly. I did 
not know, going through this process the initial description 
was 3 weeks and then 5 to 7 days that you would receive the 
income. And after 3 weeks and then 4 weeks, we just did not 
know what to do or if I needed to look for capital elsewhere or 
not, would that have been a waste of time? You know, and then I 
was behind the line of all the people who went that different 
avenue. So it was quite paralyzing. And I was really kind of 
mired with the SBA and just at their beckon call to see what 
was going to happen.
    Mr. SCHNEIDER. And Mr. Whack, Ms. Sexton, was your 
experience similar?
    Mr. WHACK. Can you hear me?
    Mr. SCHNEIDER. I can.
    Mr. WHACK. Okay. My experience was very similar, and I 
would best characterize it as traumatic. I mean, I have been on 
pins and needles trying to keep things afloat, keep going, and 
hoping that I would get an answer. And when I got the answer, 
well, it was no, but it was just so vague and such a strange 
response I just was not ready for this.
    Mr. SCHNEIDER. And I am sorry; I only have a minute left. 
So Ms. Sexton, you laid it out very beautifully in your written 
testimony about how much stress this was. Is it still 
stressful?
    Ms. SEXTON. Yeah, I mean, of course. Of course. I mean, I 
have to, I am literally, I have to close my largest location 
and that is going to take out two-thirds of my income. I mean, 
two-thirds of my business that I created up to 4 years of 
busting and making that happen.
    Mr. SCHNEIDER. And Dr. Gerstein, you know, the other thing 
we talked about is this arbitrary cap at $150,000. How has that 
impacted your planning for the future?
    Dr. GERSTEIN. At this point now I am looking at alternative 
aspects for capital. You know, I did send a letter with 
documentation to the SBA. I am still to this day waiting to 
hear from them and see if I am going to be granted more income. 
But now I have to look at different programs through banks and 
other aspects in order to try to just keep us going until we 
get back to normal.
    Mr. SCHNEIDER. Got it.
    And my time is expired. I would ask, Madam Chairwoman as we 
proceed in this, one of the things I think we also have to 
explore is why did the SBA think it was prudent to not disclose 
the information about changing policies? Why did they not give 
an alert that we were running behind? The greatest frustration 
sitting at an airport is when they do not tell you why your 
plane is delayed. That is an inconvenience. How that was 
delayed and these other things is devasting for these 
businesses.
    Chairwoman VELAZQUEZ. That is why it is so important that 
we have them come before the Committee, and we expect for them 
to comply with our report.
    Mr. SCHNEIDER. I look forward to that.
    Chairwoman VELAZQUEZ. The gentleman's time has expired, and 
now we are going to recognize Dr. Joyce from Pennsylvania. I 
believe he is on the phone.
    Dr. Joyce?
    Now we will recognize the gentleman from New York, Mr. 
Espaillat for 5 minutes.
    Mr. ESPAILLAT. Thank you, Madam Chair. Let me thank you for 
the great work, the lifesaving work that you are doing as the 
Committee leader. When I testified before the Committee, as a 
member of the Committee, I said that small businesses were mad 
as hell. I was mad as hell. I am sorry to report to you, Madam 
Chair, that they are still mad as hell.
    The PPP program originally was a disaster. You did great 
work, Madam Chair, in carving out those $60 billion so that the 
money will go to CDFIs, credit unions, and local banks which I 
think have a longstanding relationship with small businesses. 
But we saw how the traditional banks favor their perceived 
customers. And some of them have to shamefully return the money 
back. And so this $60 billion that you allotted was very 
helpful. However, it is not enough. And of course, you know, 
now we see how this credit score business is being introduced. 
If you have A+ credit, if you can meet payroll, if you have 
liquidity and you have access capital, the bank comes to you. 
You do not need to go to the bank. If you go to the bank when 
your credit is hurting, when you are striving, when you are 
hurting to make payroll and just squeezing by, when you have no 
money to expand and you have very little collateral, that is 
when you go to the bank. And so if the bank is shutting you out 
then, then we are in trouble.
    Now, I know that we are going to need to do far more with 
small businesses, Madam Chair, and I know that your heart is in 
the right place. I work with Chef Kwame, who is an 
internationally acclaimed chef based in D.C. but is originally 
from the Bronx, from Webster Avenue in the Bronx. He has won 
the James Beard Award, the most prestigious award for a chief. 
He is a young guy, I believe right under 30 years old, and he 
has an independent group association of restaurants. 
Restaurants which in many cases define the character and the 
reputation and the personality of a neighborhood. We all go to 
a particular restaurant in Harlem, East Harlem, Washington 
Heights, in Red Hook, Madam Chair, your neighborhood, across 
the country because they define those neighborhoods. They are 
hurting, and these businesses are marginal businesses that we 
work our profit, you know, it is very tight to begin with. In 
fact, most of them just make their money at the bar. So I think 
that we are going to allot a specific amount of money to 
restaurants so that we can save them. And I think there are 
several businesses, areas of businesses where we are going to 
have to be laser-focused to rescue. I think the Independent 
Restaurant Association, which has a great number of very good 
restaurants and that provides thousands of jobs to people from 
all over the country, we are going to need to really help out 
and allot some specific money to them so they will be able to 
open. Most of them are going to open and they are going to do 
it on the sidewalk, outside cafe and the streets are going to 
be converted. But no one is going to rush back to a crowded 
restaurant, so their income is going to be limited. And 
unfortunately, unless we help them, many of them will close, 
and as a result we will lose hundreds of thousands of jobs. So 
I want to thank Chef Kwame who is a young rising star. He is 
right there at The Wharf in Washington, D.C., Kith and Kin. And 
so he is like a guy that is leading the movement for that 
business. And there are other businesses that I think face the 
same kind of challenges.
    So Madam Chair, we are going to have to go back to the 
drawing board and really do better for small businesses. And 
thank you for your work, and I yield back the remaining part of 
my time.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    With that we are coming to the end of this hearing.
    I want to take this opportunity to thank all of the Members 
for participating in such an important oversight hearing. I 
also want to thank all of our witnesses for their testimony and 
for offering the main street view of the SBA EIDL program.
    By sharing your experiences with us today, we will be able 
to conduct more effective oversight and continue to optimize 
the EIDL program. We have heard some rather troubling issues in 
your testimony, and I assure you we will be following up with 
SBA on each one.
    I ask unanimous consent that Members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, so ordered.
    If there is no further business before the Committee, we 
are adjourned. Thank you.
    [Whereupon, at 2:49 p.m., the Committee was adjourned.]
    
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