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




 
                    OVERSIGHT OF THE SMALL BUSINESS 
      ADMINISTRATION AND DEPARTMENT OF TREASURY PANDEMIC PROGRAMS

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JULY 17, 2020
                               __________

  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                             
                               

            Small Business Committee Document Number 116-088
             Available via the GPO Website: www.govinfo.gov
             
             
                             ______

              U.S. GOVERNMENT PUBLISHING OFFICE 
41-299                  WASHINGTON : 2021 
             
             
             
             
                   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
                         KWEISI MFUME, Maryland
                          JUDY CHU, California
                       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
Hon. Nydia Velazquez.............................................     1
Hon. Steve Chabot................................................     3

                               WITNESSES

The Honorable Jovita Carranza, Administrator, U.S. Small Business 
  Administration, Washington, DC.................................     5
The Honorable Steven Mnuchin, Secretary, U.S. Department of the 
  Treasury, Washington, DC.......................................     7

                                APPENDIX

Prepared Statements:
    The Honorable Jovita Carranza, Administrator, U.S. Small 
      Business Administration, Washington, DC....................    43
    The Honorable Steven Mnuchin, Secretary, U.S. Department of 
      the Treasury, Washington, DC...............................    47
Questions and Responses:
    Questions from Hon. Velazquez, Hon. Evans, Hon. Houlahan, 
      Hon. Hern, Hon. Burchett, and Hon. Bishop and Responses 
      from Secretary Mnuchin.....................................    51
Additional Material for the Record:
    Letter from William Manger, Associate Administrator, U.S. 
      Small Business Administration..............................    62
    National Association of Federally-Insured Credit Unions 
      (NAFCU)....................................................    69


                    OVERSIGHT OF THE SMALL BUSINESS 
      ADMINISTRATION AND DEPARTMENT OF TREASURY PANDEMIC PROGRAMS

                              ----------                              


                         FRIDAY, JULY 17, 2020

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:31 a.m., Room 
2118 and via Cisco WebEx, Rayburn House Office Building. Hon. 
Nydia Velazquez [chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Finkenauer, Golden, 
Kim, Crow, Davids, Chu, Mfume, Evans, Schneider, Espaillat, 
Delgado, Craig, Chabot, Balderson, Hern, Hagedorn, Stauber, 
Burchett, Joyce, and Bishop.
    Chairwoman VELAZQUEZ. Good morning. I call this hearing to 
order. Without objection, the Chair is authorized to declare a 
recess at any time.
    I want to thank everyone, especially our witnesses, for 
joining us today for our committee's hybrid hearing. I want to 
make sure to note some important requirements.
    Let me begin by saying that standing House and committee 
rules and practice will continue to apply during hybrid 
proceedings. House regulations require Members to be visible 
through a video connection throughout the proceeding, so please 
keep your cameras on. Remember to remain muted until you are 
recognized to minimize background noise.
    In accordance with the rules established under H.R. 965, 
staff have been advised to mute participants only in the event 
there is an advertent background noise.
    I urge Members and staff to wear masks while in the hearing 
room, and I thank you in advance for your commitment to a safe 
environment for all here today.
    Secretary Minuchin, Administrator Carranza, welcome to the 
Small Business Committee, and thank you for being here today.
    Let me start by saying I want to give a sincere thank you 
to all the staff at both of your agencies who have worked 
tirelessly over the last few months responding to this crisis. 
I am deeply appreciative of all the work which helps support 
millions of American jobs in a moment of unprecedented 
uncertainty. These are extraordinary circumstances, and I would 
like to paint a picture for you of the magnitude of the 
devastation that small businesses are going through right now.
    Back in March, it became clear that COVID-19 will tear 
through our communities leaving almost no sector of our economy 
unscathed. The heat on small businesses was in many cases 
deeper than their larger counterparts.
    I have been on phone calls with small business owners in my 
district who have been mainstays in the community for decades, 
who have lived through 9/11 and the Great Recession and are now 
holding back tears telling me that if we do not do more to fix 
the Payroll Protection Program (PPP) and find long-term 
solutions, that they cannot imagine their business, the source 
of income for themselves and their employees, to survive the 
COVID-19 pandemic. In fact, about 110,000 small businesses have 
already closed their doors permanently, and an estimated 7.5 
million additional firms are at risk for the same fate.
    On top of all that, they turn on the news and see headlines 
like ``Trump friends and family cleared for millions in small 
business bailout'' and ``SBA exempted lawmakers, federal 
officials from ethics rules in $660 billion loan program.''
    Let me tell you, that is a gut punch to the small 
businesses that this program was intended to serve, the ones 
that did not have the top-notch financial connections to 
quickly get a PPP loan. While we are grateful to SBA for 
providing data that I have been calling for since the start of 
PPP, it is no secret that there have been errors that are cause 
for concern. I am troubled by the Bloomberg News Report that at 
least 226,000 loans were likely misreported by congressional 
districts, making it even harder for us to understand how 
businesses in our district fared in the program.
    Meanwhile, a report from the New York City controller 
suggests that PPP loans were made in greater frequency in 
states that were less hit by COVID-19 than in epicenters like 
New York City.
    As we all know, the pandemic has been especially 
unforgiving for our communities of color. Minorities have bore 
the brunt of the health consequences of this terrible virus. We 
cannot let their businesses also disproportionately bear the 
economic consequences.
    According to a survey, a mere 12 percent of Black and 
Latino business owners who applied for PPP loans reported 
receiving what they asked for, and nearly half anticipated 
being forced to close permanently in the near future. We do not 
even know how Asian and Native American business owners fared 
because demographic data was not asked to be voluntarily 
provided. That is why collecting demographic data on these 
loans was imperative. I will continue to press to set aside 
more resources for minority and women-owned businesses, and I 
hope that we will commit to do more for these businesses in 
what are sure to be tough months ahead.
    I am sure you both can understand many in our country are 
frightened. They are angry and they are hurting. We are here 
today to bring transparency and accountability to ensure that 
America knows they have a government that works as well for 
them as it does for the well-connected corporations and friends 
of this administration.
    As lockdown orders started in March, storefronts were 
shuttered, and waves of layoffs were taking place. In response, 
Congress provided relief to reeling business owners and their 
employees.
    First, Congress established the Paycheck Protection Program 
to provide forgivable loans to businesses and nonprofits for 
mainly covering payroll.
    Second, to help small businesses that needed financing 
beyond PPP, Congress enhanced SBA's EIDL program to get more 
flexible working capital to more businesses faster. Knowing 
that small businesses operate on razor-thin margins, Congress 
created the EIDL Grant Program to get cash into the hands of 
small businesses quickly to bridge the gap until their loans 
are dispersed. Despite the flaws in their implementation, these 
programs have been a lifeline for millions of entrepreneurs and 
job creators, injecting over $670 billion into the economy.
    To address concerns and make the programs work better, our 
committee held numerous hearings and forums with small 
businesses, lenders, and leading policy experts over the past 
few months. One of the top issues we heard from PPP 
stakeholders is the incomplete and everchanging guidance. 
Borrowers testified that they have very little guidance 
regarding how to spend their loans so they could qualify for 
full forgiveness. Lenders are still reporting the process for 
seeking forgiveness is unclear and unworkable.
    If forgiveness is the centerpiece of the program, a 
streamline efficient process for getting those loans forgiven 
should be a priority. Turning briefly to EIDL, the lack of 
clear communication has been an ongoing issue. Given the 
urgency of this pandemic and the uncertainty for so many small 
businesses, SBA must do a better job communicating. As the 
spread of COVID-19 has accelerated in recent weeks and lockdown 
orders return, it will be extremely important that we take 
lessons learned since March to stave off unnecessary 
bankruptcies and make sure these programs are working for 
America's small firms. We also need to explore other ways SBA 
can support our small business sector, like turning to tried 
and true program enhancements that work after the Great 
Recession.
    Once again, thank you for being here today. I know yield to 
Ranking Member Chabot for his opening statement.
    Mr. CHABOT. Thank you, Madam Chair. And I want to thank 
Administrator Carranza, as well as Secretary Mnuchin, for being 
with us here today and taking time out of your very busy 
schedule. So thank you so much for being here, both of you.
    While we all agree we must be forward-looking as we 
continue to respond to the COVID-19 pandemic, the topic of 
today's discussion is equally important. We must continue to 
work together to ensure the Federal government's relief efforts 
face sound and prudent oversight. These programs were developed 
to assist the Nation's smallest firms. Instances where 
ineligible businesses and entities, including political 
organizations who benefitted from the programs must be examined 
closely.
    Take, for example, the over $300,000 taxpayer-backed loans 
that were received by the Ohio Democratic Party in May, and 
Madam Chair, for the record, I would oppose such a bailout for 
the Republican Party as well, but it happened to be the 
Democratic Party in Ohio that took advantage of this. And I do 
not think it was ever intended for that type of thing to 
happen.
    Additionally, oversight of how well the billions of dollars 
allocated to assist small businesses was utilized is 
imperative. That will help us to formulate a future strategy 
and to make well-informed decisions that benefit the greatest 
number of Americans.
    I happen to represent most of the City of Cincinnati. For 
the past few months I visited with countless small businesses, 
and obviously, many of their employees as well. And I and my 
staff have spoken with representatives from the Cincinnati 
African American Chamber of Commerce and the Urban League. And 
some of our smallest businesses, particularly those in minority 
and economically disadvantaged communities, oftentimes the 
smallest businesses, and typically under 10 employees, when 
this started, and many of them still do not, they did not have 
the strongest relationship with banks or credit unions when 
they were seeking these loans. So I think that it is something, 
and I know as this has evolved and the Chair has been 
instrumental in that effort as well and we have worked with her 
and her staff on that, but we have to make sure that those 
folks in these economically disadvantaged areas have access to 
this. Because as I say, oftentimes the relationship they have 
had with the banking institutions, financial institutions just 
is not there. So it makes it even tougher for them.
    Now, it is impossible to legislate from Washington for 
every single situation across the country. Likewise, it is 
impossible to regulate from Washington for every scenario that 
may come up. All of the folks in this room recognize this and 
have been reminded since March of that structural 
impossibility. Congress acted quickly earlier this spring. 
Speed was paramount in getting funds into the hands of small 
business owners to keep them afloat when they were forced to 
shut down through no fault of their own. Consolidating 6 months 
of legislative work in a little more than 6 days, the 
Coronavirus Aid Relief and Economic Security (CARES) Act was 
passed with overwhelming bipartisan support, Republicans and 
Democrats working together, and it was signed into law by 
President Trump on March 27th. This more than $2 trillion 
economic relief package delivered on our commitment to do 
everything possible to protect the American people from the 
public health and economic impacts of COVID-19.
    The CARES Act created the Paycheck Protection Program. 
Following passage of this landmark legislation, the SBA and the 
Department of the Treasury worked tirelessly to execute the law 
and issue regulations to inform borrowers and lenders alike how 
the program would be administered. To the credit of everyone 
involved, the first loans flowed from private lenders 7 days, 
just 1 week later on April 3rd. Since that date, the PPP 
program has distributed nearly 5 million loans to small firms 
in the amount of over half a trillion dollars. In my district 
and the surrounding area alone, small businesses utilized the 
program to preserve nearly a half a million jobs.
    These successes cannot be ignored, and Ohio is not alone. 
This program provided small businesses and their workers a 
lifeline across the entire Nation. Were there bumps in the 
road? Of course. As I stated earlier, it is very difficult to 
get a program this size up and running in a week. Have there 
been communication issues between the Federal government and 
the lenders and the borrowers? Undoubtedly.
    But that is one of the reasons why we are here today. We 
must examine and learn from the past and prepare for the 
future. Unfortunately, there are still challenges that are 
presenting obstacles for the Nation's smallest firms. Because 
we continue to face this threat, we must be forward-thinking. 
More needs to be done, and we have proven that when we work 
together across the aisle, across the capital, and across the 
different ends of Pennsylvania Avenue, we can move mountains.
    We are not done yet, and I look forward to engaging with 
you, Madam Administrator, and you, Mr. Secretary, as well as 
you, Madam Chair, as we continue to work for American small 
businesses. I want to thank you both for being here, and again, 
thank the Chair for holding this hearing today. And I yield 
back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness will have 5 minutes to provide a 
statement, and each committee Member will have 5 minutes for 
questions. Please ensure that your microphone is on when you 
begin speaking and that you return to mute when finished.
    With that I would like to introduce our witnesses.
    Our first witness today is The Honorable Jovita Carranza, 
Administrator of the SBA. Administrator Carranza has an 
inspiring background. Born in Illinois to an immigrant family 
from Mexico, she began her career at UPS as a part-time 
employee, ultimately climbing the corporate ranks to become 
President of Latin America and Caribbean operations. In 2006, 
President Bush named her Deputy Administrator for the Small 
Business Administration, and most recently was the Treasurer of 
the United States. Welcome back to our committee, Administrator 
Carranza.
    Our second witness is The Honorable Steven Mnuchin, the 
Secretary of the U.S. Department of Treasury. Mr. Mnuchin had a 
successful career as a banker at Goldman Sachs for multiple 
decades before leaving to join other hedge funds throughout the 
2000s. He was appointed Treasury Secretary by President Trump 
where he has served for the last 3 years. Welcome to the House 
Small Business Committee, and thank you for joining us today, 
Mr. Mnuchin.
    Administrator Carranza, you are recognized for 5 minutes.

  STATEMENTS OF THE HONORABLE JOVITA CARRANZA, ADMINISTRATOR, 
   U.S. SMALL BUSINESS ADMINISTRATION; THE HONORABLE STEVEN 
        MNUCHIN, SECRETARY, U.S. DEPARTMENT OF TREASURY

                  STATEMENT OF JOVITA CARRANZA

    Ms. CARRANZA. Thank you, Chairwoman. Thank you.
    Chairwoman VELAZQUEZ. The mic is not on.
    Ms. CARRANZA. It says green and talk.
    Chairwoman VELAZQUEZ. Okay. Maybe bring it closer to you.
    Ms. CARRANZA. Can you hear me now?
    Chairwoman VELAZQUEZ. Okay, now. Right.
    Ms. CARRANZA. Thank you, Chairwoman Velazquez, Ranking 
Member Chabot, and members of the Committee for the invitation 
to testify this morning. I am eager to update you on the 
progress that has been made by the agency in helping small 
business weather the coronavirus pandemic.
    Since March, the SBA has processed more loan volume than it 
has in the entire 67-year history of the agency. As of this 
morning, the PPP has approved nearly 5 million loans for over 
$518 billion in much-needed fiscal relief to America's small 
businesses.
    We administered this first of its kind program with an eye 
towards equity, recognizing that this pandemic has been 
particularly harmful to socially and economically disadvantaged 
businesses.
    We mobilized thousands of new lenders, including community 
banks, credit unions, FinTech companies, farm credit lenders, 
and hundreds of CDFIs and MDIs that specialize in providing 
liquidity to underrepresented communities.
    Through economic injury disaster loans and EIDL advances, 
the agency has reached over 8 million small businesses, 
disbursing nearly $170 billion in assistance. That amount is 
more than all other disasters combined in the history of the 
agency. EIDL loans are currently being processed in just 5 days 
with disbursements occurring in just 2 days. These programs 
help the small business sector survive ``once in a lifetime'' 
disruption.
    Since early June, I have made a concerted effort to 
personally speak to businesses left reeling by this pandemic 
and to financial institutions so that I can see for myself what 
is working and where improvements need to be made.
    One of the scores of business I visited was an African 
American logistics management firm in Dallas. SBA loans 
provided him with a bridge, a financial bridge over the most 
tumultuous waters he has ever experienced. It helped him not 
only keep his employees on the payroll, but also hire new 
workers who received comprehensive skills training and 
professional certifications.
    Many small business owners use that term ``bridge'' to 
describe how SBA loans provided them with time and the space 
needed to rethink, innovate, and to adapt their business models 
for success in this new environment. One African American 
manufacturer in Greensboro, North Carolina, told me that an SBA 
loan helped her develop brand new lines of revenue online. SBA 
loans helped a whiskey distiller in Travis City, Michigan, 
transition his manufacturing operation to hand sanitizer to 
meet both a social need and financial gaps.
    This pandemic has been an impetus for innovation in the 
small business sector. But Chairwoman, it also has accelerated 
modernization at the SBA. For example, we have created an 
internal oversite plan for each CARES Act program, and we have 
looked long term at our management responsibilities for 
millions of businesses and disaster loans.
    The agency has brought on thousands of staff to support our 
COVID disaster operations while simultaneously servicing 175 
natural disaster declarations.
    We have significantly corrected the customer service 
experience for EIDL applicants by accelerating processing of 
our loan queue, helping them to better plan. Our dedicated SBA 
professionals have been working hard to achieve this largely on 
telework status and as a result we are more nimble, more 
responsive, and better prepared for tomorrow.
    Before I conclude, I want to say a few words about the PPP 
data disclosure made earlier this month. The data reflects 
information about loans approved by lenders and entered into 
the SBA loan system by those lenders.
    It does not mean that SBA has determined that a borrower 
has complied with program rules or is eligible to receive a 
loan and forgiveness.
    We are reviewing all loans. Moreover, we have provided the 
opportunity for business or lenders who believe that their 
reported information is inaccurate, to contact us, and we will 
work with them to fix it.
    At the same time, we should not lose sight of the fact that 
this unprecedented program has emerged as one of the most 
successful and consequential Federal economic response efforts 
in history. That success is the result of a collaborative 
effort that includes the White House, Treasury, SBA, the 
lending community, chambers of commerce, and importantly, each, 
and every one of you.
    I know that there is more work to be done and we all share 
the same goal of helping small businesses across the country. I 
look forward to working with this Committee and other members 
of Congress. Thank you.
    Chairwoman VELAZQUEZ. Thank you, Administrator Carranza.
    Secretary Mnuchin, you are now recognized for 5 minutes.

                  STATEMENT OF STEVEN MNUCHIN

    Secretary MNUCHIN. Thank you very much.
    Chairwoman Velazquez, Ranking Member Chabot, and members of 
the Committee, I am pleased to join you today to discuss how 
the Department of the Treasury and the SBA are working together 
to provide relief to businesses and their workers through the 
PPP. We remain committed to working together until every 
American gets back to work as quickly as possible.
    America's economy continues to recover from the challenges 
posed by COVID-19. For the second month in a row, the jobs 
report vastly exceeded forecasts, with a record of nearly 5 
million jobs. This brings the 2-month gain to approximately 8 
million jobs. While the unemployment rate is still historically 
high, we are seeing additional signs and conditions of 
improvement. The Blue Chip Report is forecasting that our GDP 
will grow by 18 percent in the third quarter. The U.S. Chamber 
of Commerce reports that 79 percent of small businesses are at 
least partially open, and half of the remaining businesses will 
open soon. Retail sales rose by 18 percent in May, and by 7.5 
percent in June.
    But let me point out, June was actually 1.1 percent higher 
than June 2019. This is a result of all of our programs and 
working with Congress.
    Investors and businesses have historically high cash 
positions and are beginning to put them back to work. We are in 
a strong position to recover because the Trump Administration 
worked with Congress to pass legislation on an overwhelmingly 
bipartisan basis and provide liquidity to workers and markets 
in record time. In particular, the PPP is keeping tens of 
millions of employees in their jobs. Economic impact payments 
are also helping millions of families. We are monitoring 
economic conditions closely. Certain industries, such as 
construction, are recovering quickly, while retail and travel 
are facing longer-term prospects. We are sensitive to the fact 
that certain areas of the country are experiencing increased 
numbers of cases. The Task Force, working with state and local 
officials, is helping to ensure that people can work safely in 
this environment. We look forward to continued conversations 
with this Committee and other members of Congress to address 
these critical issues.
    Turning to the PPP, the SBA and Treasury worked together to 
launch this in unprecedented time. We approved over 5 million 
loans for $517 billion to support the employment of over 50 
million jobs. This is truly an extraordinary achievement, and 
we are pleased that the loans were broadly distributed and made 
across diverse areas of the economy, with 27 percent of the 
funds going to low- and moderate-income communities, which is 
consistent with the proportion of the percentage of the 
population.
    As you might expect with a program of this magnitude, 
executed on a national scale rapidly, we initially experienced 
some complications. We resolved them quickly. To implement the 
program, our teams worked with members of Congress on a 
bipartisan basis to issue rules and guidance to provide 
clarity. By standing up the program quickly, we were able to 
support tens of millions of jobs.
    We have worked closely with members of Congress in both 
parties to pass three subsequent pieces of critical 
legislation. We also reached a second round of funding for over 
$300 billion. I look forward to these continued bipartisan 
efforts. A next phase of relief should extend the PPP, but on a 
more targeted basis for smaller companies and those that are 
especially hard hit, such as restaurants, hotels, and other 
travel and hospitality businesses.
    The Treasury Department is implementing the CARES Act with 
transparency and accountability. We have released a significant 
amount of information on our website reporting on
    USAspending.gov, and providing updates to Congress. We are 
cooperating with various oversight bodies.
    Regarding the PPP, Treasury and SBA regularly released 
data. On programs, the Treasury and IRS have made data and 
information regarding millions of economic impact payments 
available on their websites and to the GAO. We are pleased that 
the Treasury, working with the Federal Reserve, has announced 
to add to existing disclosure on the liquidity facilities by 
posting additional information on the website.
    Chairman Powell and I have had very productive discussions 
with the members of the Congressional Oversight Commission. In 
addition to the PPP, we had 160 million payments for the 
economic impact payments. We have made massive amounts to 
support air carriers. We have had $150 billion to the 
Coronavirus Relief Fund. The Federal Reserve Facility is up and 
running. I am pleased to announce that Main Street made its 
first loan for $12.3 million to doctors' offices consisting of 
15 practices in Wisconsin. The lender was Starion Bank, a 
family-owned $1.2 billion community bank. There is a $50 
million construction loan which will save over 3,000 jobs in 
the working.
    I look forward to working with Congress next week on a 
bipartisan basis to pass additional legislation.
    I would like to thank the members of this Committee for 
working with us to help the American people, and I look forward 
to answering your questions.
    Chairwoman VELAZQUEZ. Thank you, Mr. Secretary.
    I will begin by recognizing myself for 5 minutes.
    Secretary Mnuchin, ethics rules were waived 
administratively in the PPP, allowing friends of the Trump 
Administration to get access without any further review. 
Meanwhile, there are thousands of small businesses, many owned 
by women or minorities and located in rural areas that were 
desperately seeking assistance. Were you concerned about those 
optics?
    Secretary MNUCHIN. Well, let me just say as it relates to 
certain loans as the administrator said, there will clearly be 
loans that are reviewed for appropriateness. But let me just 
comment on the conflict of interest rules.
    I had very specific discussions with Senator Schumer and 
McConnell on the conflicts rules, and it relates to the direct 
loans from Treasury and the loans from the Federal Reserve. 
There were very specific requirements and certifications that 
were required for members of Congress and the administration.
    As it relates to the SBA program, Congress could have 
included those same requirements but decided not to do so, and 
indeed, the SBA followed their standard provisions for the SBA. 
The SBA Standards Conduct Commission determined that the PPP 
loans should be governed by similar disaster programs and 
explicitly, and again, this was a Committee that did not 
consist of political people, explicitly decided to provide the 
same waivers that they have done for other programs. So again, 
we look forward to working with Oversight Committees to make 
sure that proper rules and regulations were followed.
    Chairwoman VELAZQUEZ. Well, I welcome that, and we intend 
to exert our responsibility and our constitutional duty to be 
at the table. I am the first minority female chairing a 
committee, and when we are discussing lending programs that are 
within the jurisdiction of this committee, I will demand for 
the Ranking Member and myself to be at the table. I insisted 
that ethics rules should not be waived. These are lending 
programs. If it is good for the 7(a) and 504 and FDIC, it 
should be good for this type of lending and I will insist on 
that when we sit down to discuss going forward.
    I understand EIDLs were capped at $150,000 in an effort to 
stretch the funding. However, I ask you, Administrator, the 
appropriators asked you, and the Senate asked you on numerous 
occasions if you needed additional funding, and the answer was 
not. Yet here we are. It is our small businesses that are 
suffering. Moving forward, you must work with us and I ask that 
you remove the cap for new EIDL loans immediately and allow 
those with existing loans to obtain the capital they deserve. 
You still have $200 billion of loan-making authority left in 
the EIDL program while small businesses are hurting. Help us 
help you because Members of this committee and businesses who 
came to testify before this committee, they said that they 
might remain open but will not be able to keep those businesses 
open because when they were thinking that they were applying 
for the maximum allowable loans, then you reduced it to 
$150,000. We need to do better than that. This is not going 
away and too many businesses are suffering.
    Mr. Mnuchin, the pandemic has cost the rate of Black-owned 
businesses to drop by an astonishing 41 percent and the rate 
for Latino-owned businesses by 32 percent. These numbers are 
unacceptable and are only going to get worse unless we act now 
and meet reports. Should we not set aside a percentage of the 
remaining funds for small businesses that need it most? I just 
heard you saying that you are going to ask for hotels, 
restaurants, the traveling industry. What about minority 
businesses?
    Secretary MNUCHIN. I agree with you. There should be a set-
aside for small minority businesses.
    Chairwoman VELAZQUEZ. Thank you. Thank you.
    Can I count on your support that we could set aside funding 
for mission-based lenders? Because, you know, we are discussing 
here the smaller of the small businesses who have no 
connection, who have no preexisting banking relationships with 
those financial institutions. Those who have relationships are 
mission-based, like CDFI, like MDI, like microlenders, and I 
hope that we could going forward work with you on that issue.
    My time has expired, and now I recognize Ranking Member 
Steve Chabot.
    Mr. CHABOT. Administrator Carranza, I will go to you first.
    Given the overwhelming response to this emergency, is the 
SBA prepared to respond to other disasters such as floods and 
hurricanes and fires? We know they are coming at some point. 
Are you all prepared for that?
    Ms. CARRANZA. Yes, Mr. Chabot. At this point we have about 
three type of disaster declarations that are being submitted by 
the governors. It is either economic disruption based on civil 
unrest or it is natural disaster, and then, of course, the 
March declaration of economic disaster. So, we are processing 
all three as we speak.
    Mr. CHABOT. Very good. Thank you.
    Secretary Mnuchin, I will move to you next.
    Does the loan forgiveness process need to be simplified any 
more? For example, I know there are some members of Congress 
that have suggested perhaps even forgiving all the loans under 
$150,000, for example. I am not saying we should or should not 
do that, but I would love to hear your kind of thoughts about 
it. I have heard a lot of concerns from folks out there about 
how complicated the forgiveness process can be. If you could 
talk a little about that.
    Secretary MNUCHIN. We look forward to working with this 
Committee and the Senate Small Business Committee to simplify 
the process. There were provisions in the existing act that 
made it complicated. We tried to issue as much guidance as we 
could. I know one of the things that we will talk about is 
should we just have forgiveness for all the small loans? I 
think that is something we should consider. We should obviously 
make sure there is some fraud protection. But we look forward 
to working with this Committee and others.
    Mr. CHABOT. Thank you.
    As you know, at this point there is approximately $130 
billion that is still in the PPP program. So everyone is 
talking about, so what do we do with that? You know, do we 
reduce the number of employees eligible from say 500 down to 
100? Or do we stick with what we have? Do we do a second PPP? 
And I know these are negotiations that everyone is having now, 
including the Administration, the House, the Senate, this 
Committee and others. What are your current thoughts about 
that?
    Secretary MNUCHIN. The administration supports using the 
existing money and topping it up with some additional money and 
that will be discussed and allowing for a second payment to the 
businesses that are especially hard hit. And Chairwoman, let me 
just say, I was only giving examples of businesses. I did not 
mean to in any way imply that those are the only businesses 
that are hard hit. I think this time we need to have a revenue 
test and make sure that money is going to businesses that have 
significant revenue declines. That is something that Congress 
did not have in the first provision, but make sure that the 
businesses that are especially hard hit, particularly small 
businesses, and put in certain safeguards so some of the types 
of people we saw that took out loans, and I look forward to 
working with Congress. If Congress wants to put back in the 
conflict rules, we are more than happy to work with Congress. 
The Administration supports, we will participate on the same 
basis of the House and the Senate.
    Mr. CHABOT. Secretary Mnuchin, also one of the things that 
you all were operating under impossible time constraints. You 
know, we passed this. I was at the signing ceremony on a 
Friday. The next week the loans were literally going out the 
door, although not that many, and it was not glitch-free. We 
all know that. But you all got your act together pretty quickly 
and saved a whole lot of businesses all across the country. And 
God bless you all for doing that. And this Committee was 
involved in it and many others as well.
    I know one of the things that was frustrating, and again, I 
do not want to be critical here, but it was frustrating. I 
heard this from lenders. I heard this from small business 
folks. I heard it from our staff. Was just the time it took to 
get the guidance out, so people knew what the rules were, what 
we were all operating under. Do you have any thoughts for the 
future as to what we might be able to do with respect to that?
    Secretary MNUCHIN. Sure. Let me say in one of the more 
ridiculous statements I have ever made, I committed we get the 
program up in 2 weeks. And working with the SBA and the staffs, 
we were able to do that. Now, obviously, in doing that it ran 
into a lot of issues, but we made the judgment it was more 
important to get it up and running quickly, that sending money 
to people 4 months later was not going to help small 
businesses. Now that we have it up and running, especially to 
the extent there are minor changes to the PPP and the EIDL 
programs, working with the SBA, we can get the guidance out 
very quickly. We will not have the technology issues we had 
last time. And again, I would encourage this Committee to work 
in the context of these programs and put more restraints.
    The other thing I think you should consider on the EIDL is 
now that we have Main Street open for loans above $250,000, 
that we really do focus EIDL on loans that are $250,000 and 
below.
    Mr. CHABOT. Thank you very much. My time has expired, Madam 
Chair.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Now we recognize the gentlelady from Iowa, Ms. Finkenauer, 
for 5 minutes.
    Ms. FINKENAUER. Thank you, Madam Chair. I appreciate you 
holding this hearing.
    So just for Secretary Mnuchin and Secretary Carranza, for 
you guys to understand, the district that I represent is in 
Northeast Iowa. It has three bigger city centers and the rest 
is pretty rural. And our district has been hit very hard on a 
number of levels, whether it has been the attacks on our 
agricultural community over the last few years or now this 
pandemic and how it has affected not just our cities but also 
our rural areas as well. And one of the things I want to touch 
on, Secretary Mnuchin, I know you brought this up, but I really 
want to dive into this, are those economic impact payments. 
Those direct assistance payments that are important for 
individuals who are worried about how are they going to pay 
their mortgage, their rent, put food on the table, but also for 
our local businesses as well who have been able to stay open to 
have some sort of economic stimulus here during this pandemic.
    And one of the things that I was really concerned about is 
when these went out to folks, obviously, if they had a direct 
deposit set up those went into their accounts, most of them. 
However, we heard from 700 people within my district about 
these payments who did not receive them or they received them 
but they were in the debit cards and did not realize that they 
were these economic impact payments. And so why was this set up 
the way that it was? Why was there no real communication out to 
these districts, out to folks who need it, to understand how 
these were coming out? And then also, I know we wrote you a 
letter, actually, Secretary Mnuchin, about the fees and 
reissuing these cards because so many folks were throwing them 
away. I am glad you listened and decided to waive that $7.50 
charge for replacing, but why does it cost $17 to priority ship 
these cards to folks? Why do taxpayers who need their money now 
have to wait longer and it cost the more? This is just 
something again that needs to be dealt with, and I am glad you 
fixed a piece of it, but what are we going to do down the road 
when hopefully we issue more support to folks and actually have 
that education, and why was this done in the first place?
    Secretary MNUCHIN. Well, thank you for your comments. And 
let me just say, the fact that there were 700 of those in your 
community is inexcusable. And if you have specific issues, we 
are happy to follow up.
    I would say the IRS and Fiscal Services did an 
extraordinary job in sending out over 150 million payments, 
again, in a record period of time. The debit cards you did 
point out something; we did not realize that the debit cards 
were sent in unmarked envelopes. We will correct that going 
forward. I do think the debit cards actually was an interesting 
addition for two reasons. One, it allowed us to get payments 
out quicker since we could only create so many checks. And two, 
going forward, debit cards----
    Ms. FINKENAUER. I am sorry. I am sorry, Secretary Mnuchin, 
how long did we have to wait to put those out because the 
President decided to have his name on those checks or on the 
paperwork that went out with those? How long----
    Secretary MNUCHIN. I can assure you there was zero delay 
associated with either one of those issues. It had no impact on 
the timing. We were limited in the number of checks we could 
print per week but that had no impact on it.
    And I think the fees were waived. If the fees were not 
waived and you have constituents that still have issues, again, 
I am happy to follow up on that.
    Ms. FINKENAUER. Yeah. The fee of $7.50 to replace was 
waived, but then there is the $17 that it cost for the priority 
shipping of the cards.
    Secretary MNUCHIN. You let me know and we will follow up. 
That should be waived as well.
    Ms. FINKENAUER. Thank you.
    And then I also have a question about the PPP program. 
Obviously, this has been incredibly important all over the 
country and in districts like mine, but I have to be honest; I 
was really disappointed at the beginning when this rolled out. 
I mean, we allocate these dollars, and then they go to these 
agencies. So they go to SBA, they go to Treasury to set up how 
these are doled out. And communities like mine, quite frankly, 
were left behind because we have the highest concentration of 
community-based financial institutions in the entire country 
within my district. And so the first batch essentially went to 
big banks and people who were connected with their banks and 
left out communities like mine. Did either of you think about 
how this would impact our folks who lend with community-based 
financial institutions? Why was this done the way that it was 
at the very beginning? I know we have that set aside now for 
those dollars, but how can we ensure that as we continue to 
look at this, that we are doing what we should here with these 
agencies to make sure we do not forget about rural areas.
    I mean, on the SBA, I understand as well that we lost the 
head of Rural Affairs. Actually, she got moved. I know we are, 
you know, short on staffing to deal with this but it is not the 
time to move somebody that represents rural areas and then----
    Chairwoman VELAZQUEZ. Time has expired.
    If you wish to answer the question, sir.
    Secretary MNUCHIN. I can assure you we are very focused in 
making sure that the community banks and the CDFIs have equal 
access. And you are correct. Unfortunately, there were issues 
in the beginning. We corrected it very quickly.
    Chairwoman VELAZQUEZ. Thank you.
    The gentleman from Ohio, Mr. Balderson, is recognized for 5 
minutes.
    Mr. BALDERSON. Thank you, Madam Chair. Thank you both for 
being here today.
    My first question is for the administrator. Thank you again 
for being here today, administrator. I greatly appreciate your 
leadership through this pandemic. I would also like to convey 
to you that your local office in my district, Columbus, Ohio, 
SBA, has been a phenomenal partner and resource for me. We have 
been doing a Back to Business tour for the last 3 weeks. 
Everett Woodel from your office has been with me along the way 
and his team, and we are very grateful to see the business 
owners that encounter the SBA while we are there and to put a 
face with the name is very pleasing for them as well. So thank 
you.
    An issue that I have heard more and more from my 
constituents is the lack of clarity on PPP forgiveness. 
Specifically, I hear this often from business owners looking to 
have their businesses bought out. This could be because of the 
pandemic or a planned sale prior to COVID-19 that has been 
placed on hold because of the virus.
    In this situation, the business owner took PPP in order to 
support their employees and now they cannot sell their business 
with this forgivable loan on the books. Why is this?
    Ms. CARRANZA. Thank you, Congressman.
    This is a situation that I would have to speak with you 
personally or address the particular case because this is news 
to me about them taking a PPP and then wanting to sell. It is 
not a new incident where small businesses that are ready to 
sell because they do not care to go through another pandemic or 
another crisis. They are in a position and interested in 
selling their company but the PPP or the EIDL loan issue was 
not raised when we had those discussions. But I have experience 
similar to you that there are businesses that are ready to 
sell. But I would have to look into it, and I will confer with 
the Treasury, on how to manage that situation and the 
forgiveness. We have not addressed that at this point, an 
entity wanting to sell their firm and they have a loan.
    Mr. BALDERSON. We will work with you on that.
    Ms. CARRANZA. Yes.
    Mr. BALDERSON. And the business, for example, that I have 
been in communication with, they were doing an exchange in 
January before the pandemic hit. So most of them that I have 
been in contact with have been having this issue before the 
pandemic even started. So we will work with your office and 
address that. Thank you very much.
    Ms. CARRANZA. Look forward to it.
    Mr. BALDERSON. Mr. Mnuchin, thank you. My next question is 
for you.
    I have introduced legislation with my colleague from across 
the aisle, Congresswoman Brenda Lawrence, that would provide a 
tax credit for small businesses to purchase and install PPE and 
related safety equipment. This legislation would help small 
businesses that are suffering financially under the weight of 
mandatory closures, be able to afford the personal protective 
equipment required to reopen their doors. Are you open to 
working with myself and Ms. Lawrence to ensure small businesses 
are safely prepared to welcome customers again?
    Secretary MNUCHIN. Yes, absolutely. And I am not familiar 
with this specific legislation, but I like the concept a lot.
    Mr. BALDERSON. I appreciate it. It is up to $25,000 tax 
credit, so thank you. I look forward to that.
    Administrator, back to you. If a business owner decides to 
use personal finances, monies that is not associated with their 
business to pay off their PPP loan in order to move forward 
with the sale of the business, they just have to eat this as a 
loss? And again, that may be something that you and I may need 
to sit and discuss.
    Ms. CARRANZA. Yes. I agree. I need to understand all the 
nuances to that particular situation.
    Mr. BALDERSON. Understand.
    Ms. CARRANZA. And perhaps there are other businesses that 
may be facing the same thing that we need to look into.
    Mr. BALDERSON. Thank you very much.
    Ms. CARRANZA. You are welcome.
    Mr. BALDERSON. Mr. Secretary, my last question is for you. 
I greatly appreciate your leadership. It has been fascinating 
to watch you.
    As we look towards the next aid package, much of the focus 
seems to be on providing aid to schools, hospitals, and first 
responders. I support these efforts but also believe we must 
continue consideration of America's economic engine, small 
business and I know that Madam Chair and Ranking Member Chabot 
have both talked about this. What types of considerations for 
small businesses and workforce development efforts are also 
being considered?
    I did not leave you much time, Mr. Secretary.
    Secretary MNUCHIN. Various items, but again, I think that 
is something that should be considered, and we look forward to 
working with you.
    Mr. BALDERSON. Thank you, sir.
    Madam Chair, I yield back my remaining time.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentleman from Maine, Mr. Golden, for 
5 minutes.
    Mr. GOLDEN. Thank you, Madam Chair.
    Secretary Mnuchin, I have a question that I would like to 
raise with you, but first I just want to point out, as you were 
talking in your opening statement about extending the PPP 
program but perhaps trying to target the assistance to 
businesses that need that help the most, as well as maybe 
learning from some of the lessons along the way. As we work on 
the PPP program together, I want to encourage you to look at 
the Restart Act introduced in the Senate by Senators Bennett 
and Young, and here in the House by myself. This bill builds 
upon the PPP program. It models itself after that, but I think 
importantly, it has some provisions in there that would target 
the aid to businesses that can demonstrate that they have, in 
fact, suffered revenue losses over the past several months 
related to coronavirus and the economic impact.
    I do not know if you are familiar with the Restart Act, but 
I would encourage you to give it a look as you are looking to 
improve upon whatever it is that we do next to assist 
businesses here in the United States as we shift into a 
recovery phase.
    Secretary MNUCHIN. I am familiar with it, and I think parts 
of it should be incorporated.
    Mr. GOLDEN. Thank you for that. And I look forward to 
working with you and with the senators and House members on 
something similar to PPP and the program proposed in Restart.
    I wanted to raise an issue with you on behalf of critical 
access care hospitals, including some in my district. Are you 
familiar with critical access hospitals?
    Secretary MNUCHIN. A little bit.
    Mr. GOLDEN. You know, federally defined as providing 
important healthcare access in rural areas, in rural 
communities. These are hospitals that are going to operate 
under very thin margins and struggle financially, but it is 
important the Federal government recognizes how important they 
are to access to care. In addition to access to health care, 
they are often the largest employers in a rural region and 
therefore are just critically important.
    Your department has I think rightly looked at organizations 
applying for PPP who are forgoing, you know, undergoing 
bankruptcy as ineligible. I understand why you would do that 
under normal circumstances but there are a number of critical 
care hospitals in the Nation who are undergoing chapter 11 
restructurings. And given the fact that we are dealing with a 
pandemic and a recession and that these hospitals have a very 
unique, Federally-recognized mission, and are providing 
important access to health care in areas where it is going to 
be hard even in good times to be making money. These are really 
like nonprofit hospital organizations.
    I was wondering if you would consider reconsidering 
eligibility for critical care hospitals undergoing chapter 11 
restructurings for the remaining PPP funding that you have. To 
date they have been excluded and you can imagine during this 
pandemic and the recession, the fact that they could not do 
certain types of services that they normally would be doing, 
they are really struggling and several of them are at risk of 
closing which would be a terrible loss for these communities.
    Secretary MNUCHIN. I am very sympathetic to those types of 
hospitals and we look forward to working with you and 
considering that.
    Mr. GOLDEN. Well, I appreciate that very much. As you know, 
the Treasury and SBA have been able to make some changes in the 
program for eligibility for organizations to include some 
nonprofit hospitals that are tax exempt under Section 115 and 
hospitals owned by state or local government as well as others. 
But I think, you know, those jobs are obviously very important 
in rural communities, but even more important is ensuring the 
access to CARES is preserved. And they have been applying for 
PPP. They were rejected. In some instances, some of these 
hospitals have gone to courts who essentially have said that 
the determinations made by the Treasury and SBA would have to 
be changed or Congress would have to act. So I do not know if 
you think that you need some kind of legislative action or if 
you think that you have the authority you do to look at this 
and make that change yourself. But I want to thank you for 
working with both my office but also Senator King and Senator 
Collins from Maine, and I am sure other senators who represent 
similar hospitals in similar situations are eager to work with 
you to try and help these hospitals.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Now we recognize the gentleman from Oklahoma, Mr. Hern.
    Mr. HERN. Thank you, Madam Chair, Ranking Member Chabot.
    Mr. Secretary, Administrator, thank you both for being here 
in person for this. This is unprecedented times.
    Mr. Secretary, our office has dealt with many people who 
have waited weeks and weeks for their unemployment checks to 
get approved at the state level. Hundreds of thousands across 
the country I am sure.
    As you may remember, we discussed this on a phone call over 
4 months ago where we noted that under the current capacity, 
states were ill-equipped to handle the influx of unemployment 
applications. To combat this problem and to keep hardworking 
Americans employed, Congress worked in a bipartisan way, 
unprecedented actually in today's times, to establish the 
Paycheck Protection Program. And while I believe this program 
could have been expanded and more could have been done to help 
the 40 million Americans who are currently unemployed, this 
program has successfully saved 51 million jobs in America, 
which was designed so that when we come out of this pandemic 
that we can quickly stand up the economy which is what we have 
been seeing happen in May and June and continue to see that 
happen now.
    You have stated many times that the priority of the PPP was 
to predominantly preserve and save jobs and employees rather 
than the business owners themselves. Would you still agree with 
that statement?
    Secretary MNUCHIN. Yes.
    Mr. HERN. Additionally, could you discuss what you have 
learned from this or strategies that the Federal government can 
implement in the future to better prepared for this next 
situation or the situation in the future?
    Secretary MNUCHIN. Well, let me just comment on one of the 
things that we liked about the PPP was all the money we were 
spending on the employment side of this was money we saved on 
unemployment. I think one of the issues we have learned and we 
have to fix in the next legislation is the technical issue 
wherein certain cases states with the top up were paying people 
more not to work than to work. And as you said, some of the 
states were better prepared; some of the states have 40-year-
old computers.
    I also want to just say one thing. I know a lot of people 
use this 40 million people unemployed. Fortunately, it is not 
40 million unemployed. People thought we would get to that, but 
fortunately, right now we only have 18 million unemployed, and 
we have about 14 million more than where we started this. And 
we have got to get those people back to work. But thank you.
    Mr. HERN. Thank you.
    Further, my casework team has worked with hundreds of 
people who have had difficulties receiving their stimulus 
check. And I know you are aware of this. We have talked to your 
offices. Can you briefly explain, very briefly, what we have 
seen happen and why? Is there a big issue here or are all these 
one-offs?
    Secretary MNUCHIN. I mean, let me just say, all these one-
offs, I am sympathetic because these are real people who want 
their checks. So I do not mean to in any way minimize this. But 
again, we sent out over 150 million checks in record time and 
yes, there were certain cases, because they were either done 
off of previous tax returns or other information that we got 
and that is unacceptable, but we will work with you on it.
    Mr. HERN. Thank you.
    Administrator Carranza, 2 weeks ago, Associate 
Administrator Rivera testified before the Committee regarding 
the EIDL program. And during my conversation with the 
administrator, he committed to providing this Committee with a 
document outlining some best practices by the end of the third 
quarter, September 30, 2020. This will be a document to explain 
what the SBA has learned and how you all believe you could be 
prepared in the future should another pandemic arise.
    Just as a side note in that, the administrator stated he 
had been here since 9/11. He had been through 9/11, the 
financial crisis, and you know, we keep reinventing the wheel. 
And it seems with all of us engaged in this in a very 
bipartisan way that we could put a pandemic playbook in place 
so that we could learn from our mistakes and not repeat them 
again. Because when we make mistakes, people are harmed. Or at 
least not given stimulus when they need it. So if we could 
learn from those mistakes and do better that would be great. 
And I think that would be a way to do it, in a nonpolitical way 
that we could put these on the shelf.
    One of the key components to this document will be to 
design a communication plan for future pandemics which would 
greatly help all of us work together.
    Would you commit to seeing that get done by the end of the 
third quarter?
    Ms. CARRANZA. Yes, Congressman. We have already begun. We 
have prepared the first deck on how we are addressing fraud. We 
have also staffed up. I started with two additional executives, 
SESs, in ODA, so we are going to reinforce the leadership in 
ODA for future situations and in preparation for the end of the 
year.
    So, definitely, you will have a full SOP on lessons 
learned.
    Mr. HERN. And as businesspeople, and many are in this room. 
I have been in business 35 years. You know, we can talk about 
what happened but that does not really solve a problem. So if 
we can indel in a document what those issues were so that we 
can not make those again, we will make new ones, and that is 
human nature. But if we can get that done that would be great 
for us. Madam Chair, Ranking Member, I think you for allowing 
us to have this meeting, and it is very important. And thank 
both of you for being here, for what you have done in these 
unprecedented times.
    Ms. CARRANZA. I look forward to continuing to work with 
you. Thank you.
    Mr. HERN. Thanks.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Now we recognize the gentleman from New Jersey, Mr. Kim, 
for 5 minutes.
    Mr. KIM. Thank you, Chairwoman, for convening this hearing. 
Thank you to the witnesses for showing up.
    Secretary Mnuchin, I wanted to start with you. You 
rightfully noted in your testimony that small businesses are 
continuing in the face, a dire circumstance right now. Even 
those that have received Paycheck Protection Program loans are 
telling me that they are unsure whether or not they are going 
to be able to survive. And there are a lot of concerns about 
just the bigger state of our economy and whether or not our 
economy is going to be able to pursue through these coming 
months, and if not, is that going to have a negative impact on 
our small businesses?
    In my home state in New Jersey, we have gone through a 
really tough time over the last couple of months and we face a 
tough challenge up ahead when it comes to our state economy. It 
has been crippled. We have dramatically hampered our recovery, 
especially for small businesses. And these are not just about 
COVID-related expenses. It is about loss of revenue that could 
very well create widespread layoffs, decrease consumer 
spending, weaken our investment in our communities.
    Secretary, I wanted to ask you if you would commit to 
working with Congress to ensure that we have the necessary 
funding to our states and local municipalities to solve the 
crisis that we face and create a strong economic recovery.
    Secretary MNUCHIN. Well, I think as you know, we allocated 
significant amounts of money to COVID-related expenses. We have 
tried to issue guidance to be very clear that money can be used 
for law enforcement, first responders, and others. I think the 
issue of lost revenues is a much more complicated issue and the 
issue of taxing authorities between the state and the Federal 
government. But we will be working with Congress on this.
    Mr. KIM. I raise this because, you know, I have heard you 
talk about before what could potentially come next with state 
and local funding on this. And I think it is really important 
and central to this discussion that we are going to be having 
over the coming weeks about this. When I have heard you talk 
about it before you have purposefully described this money as 
bailouts for some states. And so I just wanted to hear from you 
a little bit more on that front. I believe that for you, 
perhaps you do not want to see this funding going to states 
that you characterize as mismanaging funds be fair, that it 
would not be fair to other states that are working hard on 
their economy and their budget, so why have them cover for 
other states? Is that sort of a correct interpretation of your 
assessment?
    Secretary MNUCHIN. What I have said and I agree with this, 
if there were financial conditions that states had coming into 
this, it is not the Federal government's role to bail them out 
of that. Now, we have through Main Street--excuse me, through 
the Fed facilities, we have provided lending facilities to the 
states and municipalities. But the issue of taxing authority, 
the Federal government has taxing authority and the states have 
taxing authority. So where there are lost revenues, I think 
there is a fairness issue of how those get allocated across the 
country.
    Mr. KIM. Well, I agree with you that there is a fairness 
issue here at stake. And in New Jersey, our state only gets 
back somewhere around 75 cents to 81 cents for every dollar 
that we put into the Federal government. It is one of the 
lowest in the Nation. Other states get back well over $1. Some 
$2. Kentucky gets back abut $2.35 last I saw. So I guess I 
would ask you, is that fair? Is that fair to the residents of 
New Jersey?
    Secretary MNUCHIN. Let me just say, I have lived in New 
York and California, and both New York and California cite 
those numbers as well. I do not believe that that is an 
appropriate number because the answer is more rich people live 
in those states. And because of the way we have taxes and the 
rich people are the ones who pay the preponderance of Federal 
taxes. I do not believe the calculation as a result is the 
right way to look at things.
    Mr. KIM. Okay, well, that is helpful for me to understand 
how you are approaching this problem, and I want to continue to 
work with you on that because from my standpoint, if New Jersey 
is often calculating that we give in to the Federal government 
about $20 billion more than what we get back every year, I 
think there is an issue of fairness here. And I really do not 
want us in the middle of a pandemic to get to a situation where 
we are trying to pit states against each other. We saw that 
with personal protective equipment, and now with funding, I 
think there is a chance for us to really come together here and 
try to think about this, especially when we know that current 
and former Fed chairs all have said and reportedly warned that 
economic recovery could be hampered if we do not appropriate 
more aid to state and localities.
    Just switching gears here at the very end, Administrator 
Carranza, I understand that the Economic Injury Disaster Loans 
were capped at $150,000 to ensure all borrowers could access 
the funds. However, this policy shortchanged many businesses. 
So I wanted to ask you, moving forward, will you commit to 
removing this cap for new EIDLs and to allow the existing loans 
to obtain more funding in phrase two?
    Ms. CARRANZA. Congressman, what our experience is currently 
is that the average loan has dropped from 63,000 to 57,000 down 
to about 43,000 since we have opened in June--July, excuse me. 
And so, at this point, the operating expense that people apply 
for are not hitting the cap in great numbers. About 1 percent 
of the applicants are pursuing that amount. Eighty percent of 
the loans that we have processed come in significantly under 
the $150,000. But I will continue assessing it. We are 
reviewing that on a daily basis, Congressman, so I look forward 
to working with your office.
    Mr. KIM. Thank you.
    Chairwoman VELAZQUEZ. Would you yield?
    Mr. KIM. I will.
    Ms. CARRANZA. Thank you.
    Chairwoman VELAZQUEZ. We are out of time. I expect for you 
to lift that cap, especially when there are other states that 
are facing the pandemic now. You cannot predict if any business 
from those states will need more than $150,000, so the fact 
that now, from those other states you are not getting those 
type of applications or that type of amount does not mean that 
that will apply to every order. Businesses should have the 
opportunity to be able to apply for over $150,000 if that is 
what they need.
    Ms. CARRANZA. Congresswoman, at this time, since we opened 
the portal, we have an additional 5 million applications. We 
have probably about 15 to 20 days remaining with the remaining 
funds. So, if I keep that level of $150,000, I will be able to 
serve 5 more million small businesses.
    Chairwoman VELAZQUEZ. Sure. From the beginning, 
appropriators, myself included, Senator Cardin and some other 
senators asked you if you needed more than what we included in 
the bill and you said yes. Come to us. Tell us when we ask if 
that is enough.
    Ms. CARRANZA. Yes. I will work with your office.
    Chairwoman VELAZQUEZ. Thank you.
    Now we recognize the gentleman from Minnesota--who is----
    Mr. STAUBER. Thank you.
    Chairwoman VELAZQUEZ.--Mr. Stauber.
    Mr. STAUBER. Thank you, Chair Velazquez----
    Chairwoman VELAZQUEZ. Yes, Mr. Stauber.
    Mr. STAUBER.--and Ranking Member Chabot. I also want to 
thank the two witnesses for being here today.
    So, Secretary Carranza, this kind of follows what the 
Chairwoman just talked about. I would first like to share with 
you some concerns that I have heard from my constituents. And 
it seems that the SBA has taken some liberties to reduce the 
cap of loans given out from the 2 million to 150,000. While 
this is likely to ensure the maximum number of businesses 
receive some sort of funding during this crisis, my 
constituents are rightfully upset. They feel that they are 
being cheated out of what they were promised by their 
government.
    I heard from your colleague Mr. Rivera on this issue a 
couple of weeks ago. But I wanted to give you the opportunity 
to respond today.
    Ms. CARRANZA. Yes, Congressman. I also receive emails where 
their calculation on operating expenses may have not reached 
the 150,000, and we have taken those under special 
reconsideration and looked at ways where we could increase that 
amount.
    Secondly, to exceed the 150,000 at this given time would be 
premature because we have 5 million applications currently. As 
I stated to the chairwoman, if there are needs for funds, then 
we will bring that up for discussion.
    What we do with the applicants that need more funds is we 
counsel them that there is the PPP program, that is a 
forgiveness loan and we provide technical assistance. We don't 
influence nor do we recommend. We just share that there is also 
another option that they can consider.
    We don't take lightly the fact that businesses need funds. 
It is an emergency lifeline that we initially thought it was 
going to--this pandemic was going to be 2 weeks and now it is a 
couple of months. And so, we recognize the fact that they need 
greater funds.
    Mr. STAUBER. Thank you----
    Ms. CARRANZA. You are welcome.
    Mr. STAUBER.--Madam Secretary. You know, as I have said 
before, the SBA and the Treasury were given a nearly impossible 
task. And while there have been some bumps in the road, we 
appreciate the work that you, Secretary Carranza and Secretary 
Mnuchin, and your respective teams, have put into helping the 
small businesses across this Nation during this pandemic.
    My last question will go to Secretary Mnuchin. You know, 
shifting gears a little bit, I have been hearing from local 
grocery stores and convenient stores of the coin shortage. What 
are your thoughts for addressing this issue and have you 
considered some type of public messaging or political PR 
campaign to help jump-start the coin circulation across the 
Nation? Secretary Mnuchin.
    Secretary MNUCHIN. Thank you. We are working very closely 
with the Mint and the Federal Reserve on the coin shortage, and 
the Mint is working overtime. As you said, as a result of 
COVID, a lot of the coinage is stuck, but we will--we are 
working on a public messaging and we will get updates to your 
office.
    Mr. STAUBER. Thank you, Mr. Secretary. I would say this 
Committee would be happy to help you in that public relations 
campaign.
    And with that, Madam Chair, I yield back. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back. Now we 
recognize the gentleman from Colorado, Mr. Crow.
    Mr. CROW. Thank you, Madam Chair. And thank you, 
Administrator Carranza and Secretary Mnuchin, for joining us 
today.
    Administrator Carranza, on July 6th, the SBA sent to 
Congress a list of the loans distributed by congressional 
district. And they sent to my office a list showing 317 small 
businesses within my district received loans over 150,000, and 
over 3,600 received loans less than that. I knew that wasn't 
right given the number of small businesses in my district, so 
we conducted our own analysis and determined that there were 
actually over 1,400 businesses in my district that received 
loans over 150,000 and over 10,000 that received them under 
150,000. So, that data was way off. What are you doing to fix 
it?
    Ms. CARRANZA. I would like to visit with you and address 
those particular statistics. It would be premature to comment 
on these particular data points that I am not familiar with at 
this point, so I look forward to working with you.
    Mr. CROW. So, you will commit to work with me and every 
other Member of Congress to----
    Ms. CARRANZA. Absolutely.
    Mr. CROW.--make sure that data is correct?
    Ms. CARRANZA. The entire Committee, yes.
    Mr. CROW. Okay. And, Secretary Carranza, I was very pleased 
to hear from--I am sorry, Administrator Carranza, I was very 
pleased to hear from Secretary Mnuchin that he would commit to 
work with us to look at how to get that 100 billion-plus PPP 
money that is still available to members of the Black and Brown 
community and to women-owned businesses and others especially 
hard-hit. Do you share that commitment and will you commit now 
to work with us to develop a program to give money to those 
businesses?
    Ms. CARRANZA. Yes, I do. We have been working in concert 
with Treasury. We have worked together on the CDFIs, the credit 
unions, the savings and loans, the fintech organizations. Many 
of the community banks are the ones that are very specialized 
in providing funds to these particular underserved communities, 
so we are working in tandem. Definitely I agree with----
    Mr. CROW. Thank you.
    Ms. CARRANZA.--Secretary Mnuchin.
    Mr. CROW. I appreciate that.
    Ms. CARRANZA. Thank you.
    Mr. CROW. I appreciate that commitment, Administrator.
    Secretary Mnuchin, to you. You have had a long career in 
investment banking and banking, correct?
    Secretary MNUCHIN. I haven't been in investment banking in 
close to 18 years, but I have been in banking.
    Mr. CROW. In banking. And when you were in banking you 
advised your banks on where to send money and to whom to give 
loans and funds to, correct?
    Secretary MNUCHIN. No, I didn't. I had a regional-based 
bank. I didn't advise where to give money. I served on a loan 
committee, but we gave----
    Mr. CROW. Your banks would make decisions, though----
    Secretary MNUCHIN.--across the board in the community.
    Mr. CROW.--where to send money, whom to give loans to, 
correct?
    Secretary MNUCHIN. I am sorry, I couldn't hear you. Could 
you repeat that, please?
    Mr. CROW. Your banks would make decisions to where to send 
money and to give loans to, correct?
    Secretary MNUCHIN. Well, customers--again, customers 
applied for loans and the bank made credit decisions.
    Chairwoman VELAZQUEZ. Mr. Crow, we cannot hear you.
    Mr. CROW.--closure requirements as to whether or not an 
employee of that bank, a family member of you or one of your 
employees, or a close business relationship was one of the 
recipients of that money, correct? There are disclosure 
requirements in the financial industry?
    Secretary MNUCHIN. There are disclosure requirements. There 
are also requirements by the FDIC and the OCC that we would 
follow.
    Mr. CROW. And what are the purpose, in 20 seconds, what are 
the purpose of those disclosure requirements?
    Secretary MNUCHIN. Well, the real focus is the conflict of 
interest. And to the extent there is a conflict of interest, in 
many cases it has to go to the board of directors to be 
approved. So, it is more focused on conflict of interest than 
disclosure.
    Mr. CROW. But you need to have that disclosure in order to 
do that analysis, correct?
    Secretary MNUCHIN. Again, most banks do not publicly 
disclose----
    Mr. CROW. No, Secretary Mnuchin, you have to have the 
disclosure of that information in order to do the analysis on 
conflicts of interest, correct?
    Secretary MNUCHIN. Disclosure within the bank, yes, that is 
correct.
    Mr. CROW. Okay. So, by that same rationale, is it important 
that members of the Trump family, associates of the Trump 
organization, or employees of the administration disclose their 
interest in entities that are receiving PPP money so you can 
conduct that conflict of interest analysis?
    Secretary MNUCHIN. Again, let me repeat, and I repeated 
this before, as it relates to----
    Mr. CROW. No, Secretary Mnuchin, I asked you a very 
specific question. Do you believe that disclosure is necessary 
in the context of the administration?
    Secretary MNUCHIN. Again, I don't believe that because, 
again, this was not an issue that was required by Congress. 
This was a very specific issue and there were no restrictions.
    Now, I am not aware if they took loans or they didn't. But 
let me be clear, there was no restrictions on the PPP. There 
were restrictions for the administration and Congress, same 
terms, on the other official----
    Mr. CROW. Well, I won't take it----
    Secretary MNUCHIN. And I believe----
    Mr. CROW.--as a no then.
    Secretary MNUCHIN.--the Trump administration----
    Mr. CROW. It is don't believe----
    Secretary MNUCHIN.--should be held to the same standard as 
Congress on the PPP. So, there----
    Mr. CROW. But they should not be held to the same standards 
that your banks and financial industry was held to during your 
career?
    Secretary MNUCHIN. Again, I think you are misrepresenting 
my comments on, again, conflict of interest versus disclosure.
    Mr. CROW. I think I was very clear. My time is out. I yield 
back, Chairwoman. Thank you.
    Chairwoman VELAZQUEZ. The gentleman's time has expired, so 
how we recognize the gentleman from Tennessee, Mr. Burchett. Is 
he here?
    Mr. BURCHETT. Yes, ma'am. Yes, ma'am. Can you hear me----
    Chairwoman VELAZQUEZ. Yes.
    Mr. BURCHETT.--Chairlady?
    Chairwoman VELAZQUEZ. Yes, I can hear you.
    Mr. BURCHETT. Thank you. I am sure my melodious voice 
carries well over the internet. Hey, let us see, thank you all 
for letting me be here, Chairlady and Ranking Member.
    Administrator Carranza, and I might have missed this 
earlier, I have had some technical difficulties, having trouble 
hearing what people are saying, so if I have done this, you 
just give me the brief answer, that would be great. As of last 
Friday, the SBA still does not have a portal of a process for 
accepting loan forgiveness applications. Why is this? And what 
can we do to speed this portal and process up?
    Ms. CARRANZA. The forgiveness portal or the application or 
guidance will be out very shortly. We are resolving some of the 
language between Treasury and SBA, but it is going to be 
available very, very soon.
    Mr. BURCHETT. When do you think that would be? I know 
government very soon is like a glacier and I am in Tennessee 
and people----
    Ms. CARRANZA. Well, I haven't been allowed that luxury 
lately, not under this pandemic. So, you can trust that we will 
work it as expeditiously as we can. We are trying to make it 
right the first time and address all the issues that have been 
raised by not only the lenders, but the borrowers, as well.
    So, if I can tell you within a----
    Mr. BURCHETT. Okay.
    Ms. CARRANZA. If I can tell you by August, that will be a 
target date.
    Mr. BURCHETT. Of 2020?
    Ms. CARRANZA. Yes, sir. Yes, sir.
    Mr. BURCHETT. Okay. Yes, ma'am. I had to get that clear 
since we are----
    Ms. CARRANZA. Yeah, thank you.
    Mr. BURCHETT. Yes, ma'am. Secretary Mnuchin, in your 
opinion, how should we in Congress utilize the remaining 103 
billion in the PPP funding?
    Secretary MNUCHIN. My suggestion is that Congress would 
reauthorize the program to allow for a second check, a second 
payment to the businesses that are most hard-hit.
    Mr. BURCHETT. And which would those be, in your opinion?
    Secretary MNUCHIN. I think we should use a revenue test. 
So, as opposed to I don't think any specific industry should be 
targeted. I think that----
    Mr. BURCHETT. Okay.
    Secretary MNUCHIN.--we should use a revenue test and 
something significant.
    Mr. BURCHETT. I caught part of that earlier, but it cut 
out.
    Also, Secretary Mnuchin, do you believe the Nation's 
smallest businesses, those with 10 or less, received the 
assistance they needed to survive this emergency?
    Secretary MNUCHIN. Many of them did. I am sure there were 
some that fell through the cracks, but we are very proud of the 
majority of the loans went to very small businesses.
    Mr. BURCHETT. Okay. And, Ms. Carranza, what measures are in 
place in the SBA to reduce the waste and fraud and abuse in the 
EIDL and the PPP?
    Ms. CARRANZA. We have developed an infrastructure that is 
overseen by our CFO and we have contracted a vendor, as well, 
so that we can have institutional knowledge as it relates to 
experience in the lending sector. So, we have a very 
comprehensive approach to oversight not only for the PPP, with 
the EIDL, but ongoing audits of the CARES Act implementation at 
SBA in total.
    Mr. BURCHETT. Okay. Do we have a flowchart or something 
that we could have just to talk to--when we talk to our folks 
and our local media about that----
    Ms. CARRANZA. Yes.
    Mr. BURCHETT.--when we get inquiries?
    Ms. CARRANZA. Yes, I have no hesitation reviewing what our 
deck looks like or strategy appears with the Committee. I look 
forward to review that.
    Mr. BURCHETT. Yes, ma'am. If you could----
    Ms. CARRANZA. Not a problem.
    Mr. BURCHETT. If you could get that to the Committee, I 
would be very grateful.
    Ms. CARRANZA. Will do, this year.
    Mr. BURCHETT. Yes, ma'am. This year, yes, ma'am, by August. 
Noting that August is my birthday month, so that would be 
great.
    Ms. CARRANZA. Okay.
    Mr. BURCHETT. Okay. Thank you, Chairlady. It is always good 
to see you----
    Ms. CARRANZA. You are welcome.
    Mr. BURCHETT.--even on the camera.
    Ms. CARRANZA. Likewise. Thank you.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. BURCHETT. Yes, ma'am. And I yield the rest of my time.
    Chairwoman VELAZQUEZ. The gentleman yields back. Now we 
recognize the gentlelady from Kansas, Ms. Davis.
    Ms. DAVIDS. Good afternoon, everyone. Thank you, Chairwoman 
Velazquez and Ranking Member Chabot, for holding this very 
important hearing today.
    Secretary Mnuchin and Administrator Carranza, I appreciate 
the both of you appearing before this Committee to answer our 
questions and discuss the way forward in supporting our small 
businesses through this unprecedented crisis.
    You know, we enacted the Paycheck Protection Program to 
ensure that our country's small businesses can keep their 
employees on payroll and keep businesses afloat during the 
crisis. And I know many small businesses in my home state of 
Kansas, especially the minority-owned ones, struggled to access 
the program during what was a critical time. And, at the same 
time, we saw well-connected and even publicly traded companies 
getting these loans with little to no problems, and were even 
borrowing when they had already borrowed from their own 
executives.
    And I believe Kansans need to know that their tax dollars 
are not being used to pay back high-dollar salaries of 
executives. And that is why I have been working alongside my 
colleagues on this Committee to push for accountability and 
transparency that the public deserves. In fact, I introduced 
the PPP Accountability Act, which would ensure that both 
Congress and the public are able to see the information about 
the loan recipients for themselves. And I appreciate that you 
listened to some of these concerns and have made some of the 
initial data public.
    And, you know, from this information, we know that in the 
Kansas Third, close to 100,000 jobs were retained and 
preserved. And we also know that there is a lot of information. 
We have heard about it from some of my colleagues today, a lot 
of information that we still don't know, like what loan 
forgiveness rates will look like, the rate at which minority 
businesses have received loans. And this information is 
essential to our Congress to provide the oversight that we are 
constitutionally mandated to provide.
    So, I think I will start with, Secretary Mnuchin and 
Administrator Carranza, can you tell us what your plans are for 
releasing the data of the recipients for the loan forgiveness 
portion here?
    Secretary MNUCHIN. Well, let me first say I agree with your 
comment on the public companies and you know there was about 
$30 billion of it returned. And as the administrator has said, 
we are going to have a very robust process to review loans 
before loans are forgiven.
    And, yes, in the forgiveness process people will be 
required to provide much more data and that data will be 
released.
    Ms. DAVIDS. Well, so can we--I know you had mentioned 
earlier and it was highlighted a couple of times that there is 
definitely a commitment to making sure that minority-owned, 
women-owned businesses, and some of the most marginalized or 
disadvantaged small businesses out there should be getting 
access to these loans at the same rate as everyone else. And, 
you know, some of the fields included in the data are optional.
    And when we talk about how many jobs are saved through 
loans and demographic information about the ownership of the 
business being optional, I am curious what your plans are to 
evaluate the effectiveness and reach of the program without 
this information.
    And I appreciate the commitment that you have to making 
sure that some of the most vulnerable businesses out there are 
getting loans. I am just curious how you are going to get there 
with some of this information being optional?
    Secretary MNUCHIN. Well, the jobs numbers will be required, 
so when people apply for forgiveness, they are going to have to 
be very specific in how much money was used for payroll and the 
number of jobs. So, that will be required.
    As it relates to demographics, this is optional. There are 
legal issues associated with forcing people to report 
demographics.
    As I commented in my opening testimony, we have looked at 
low- and moderate-income census tracts, and we are pleased that 
money was distributed proportionately. But we look forward to 
working with you and the Committee on transparency and 
collecting more of this information.
    Ms. DAVIDS. Well, I appreciate that. And I know that this 
has certainly been an iterative process, particularly when we 
are thinking about the rollout of the guidance and the rules 
around these programs.
    And I know that folks are working really hard at the SBA 
and Treasury Department. I have a lot of appreciation for the 
career folks, who have been putting in tons of hours. And thank 
you both for continuing to show up and listen to our concerns. 
I want to particularly thank you for listening to the concerns 
that my office put forward about the Tribal enterprises and 
making sure that the Paycheck Protection Program was accessible 
to all Tribal enterprises. So, thank you for that.
    And I will look forward to continuing to working with you 
to make sure that our small businesses are taken care of in 
this country.
    Chairwoman VELAZQUEZ. Time has expired. Now we recognize 
the gentleman from Pennsylvania, Dr. Joyce, for 5 minutes.
    Mr. JOYCE. Chairwoman Velazquez and Ranking Member Chabot, 
thank you for convening us here today in Washington. 
Administrator Carranza and Secretary Mnuchin, thank you both 
for joining us here. Thank you for your leadership during this 
what is an incredibly difficult time.
    Small businesses which we in this group frequently state 
are the backbone of America, and during this COVID crisis truly 
we have seen that these small businesses have become the heart 
of America. According to data that you provided to us from the 
SBA, my district, fortunately, has received $295 million in PPP 
loans. This number represents over 2,700 small businesses which 
were able to retain their employees, pay their benefits, their 
health insurance. This was a significant relief for the small 
businesses in Pennsylvania.
    This number would be substantially lower had it not been 
for your attentiveness for the needs of the farmers. On behalf 
of Pennsylvania farmers, I thank you for your willingness to 
work with my office on adjusting these programs to fit the 
needs of our agricultural producers, those who every day feed 
us safe and nutritious food.
    Administrator Carranza, as we continue to reopen our 
economy it is possible that people may increasingly rely on the 
internet platforms to purchase goods and services and to even 
work from home. While these platforms provide enormous 
opportunities for small businesses, this transition could 
further stretch the digital divide between urban small 
businesses and access to affordable and reliable broadband in 
the rural areas who have less reliable internet options.
    This response to COVID-19, as you so eloquently stated, has 
been an impetus for innovation. Those words were very striking 
to those of us sitting here in the Committee.
    Would you support further modifications of the PPP that 
would allow funding to be used for broadband improvements or 
other costs associated with the tools and the infrastructure 
that is so necessary to allow rural small businesses to 
telework effectively and utilize online platforms.
    Ms. CARRANZA. Congressman, I have always been a strong 
proponent of cost-effective broadband for the rural areas and 
the most underserved markets. And so, I look forward to working 
with your office to continue that discussion. Yes.
    Mr. JOYCE. Thank you, Administrator. So, those in our rural 
areas can more readily access the necessary avenues of 
commerce, thank you for this consideration and thank you for 
allowing us to continue this discussion and evaluate the use of 
PPP to support rural broadband.
    Secretary Mnuchin, thank you for acknowledging that 
utilizing the remaining funds in PPP can positively affect 
small businesses that have been and continue to be drastically 
affected by COVID.
    Thank you for focusing on different businesses and 
considering the additional economic impact and qualifying by 
economic impact on the businesses. I think that is a reliable 
model that will allow us to move forward and effectively 
utilize the remaining PPP funds.
    Thank you for your continued work with us, Secretary 
Mnuchin, and for the efforts to return those remaining workers 
to their jobs. Do you feel that utilizing the additional PPP 
resources will allow us to continue to see those additional 
workers return to full employment?
    Secretary MNUCHIN. Yes.
    Mr. JOYCE. Thank you both for being here today. Thank you 
for continuing your work, and I yield the remainder of my time.
    Chairwoman VELAZQUEZ. The gentleman yields back. Now we 
will recognize the gentleman from Maryland, Mr. Mfume.
    Mr. MFUME. Madam Chair, thank you very much for the 
opportunity. I want to thank you for your relentless efforts at 
trying to bring about fairness and equity to this issue and to 
the overall sear of what is happening with small businesses in 
this country and, even more so, what is not happening. I want 
to thank the Ranking Member and I obviously want to thank our 
guests who are here.
    There is, from where I sit, a great deal of skepticism in 
many circles across the Nation from people who see the awarding 
of PPP funds and the rollout of this project as being 
discriminatory; as being something that works for others, but 
does not work for them; and as something that they believe was 
set up to be that way.
    Now, people, for whatever reason, have their own beliefs 
and their own shortcomings and misgivings about things, but 
when they look at the fact that the President's lawyer received 
PPP funding, that Members of Congress have received it, that 
private equity chains have received this funding, it is kind of 
hard to look at those persons and say, well, no, that is not 
the case. These are just coincidences.
    And so, it is out of that backdrop, for me at least, and, 
as I said, from where I sit, that I am concerned that we 
continue to have this discussion about bringing equity to Black 
and Brown and Korean businesses where if we, I think, were true 
to what we were saying to begin with, whether it was this 
program or any program that preceded it, that would be 
something that we would look for. We would automatically have 
that as a threshold, as something we would want to try to 
achieve.
    And as I said the other day, Madam Chair, after having 
served on this Committee 10 years through the '80s and the 
'90s, through three presidential administrations, and then to 
be fortunate enough to return to 24 years later to be a part of 
this Congress and, again, this Committee, it is disheartening 
for me to look back over that period of time and to recognize 
that many of the same arguments advocating on behalf of Black 
and Brown and Korean businesses for fairness and equity are 
still being made. I mean, it is almost unconscionable, it is 
unbelievable. And if I didn't live it myself through the 10 
years that I was here and the 24 years that I was gone, I 
wouldn't believe it.
    People are concerned, Secretary Mnuchin and Madam 
Administrator, that what they see does not gel with what they 
have been led to believe. They think that the awarding of this 
program in some way represents Robin Hood in reverse, that the 
people who really should be getting some of this money on a 
fair basis are not getting it. They anticipate that there will 
be another review, another study on the study, and then another 
Plan B for the Plan A that failed. So, I want to get that on 
the record because these people oftentimes don't have an 
opportunity to speak for themselves.
    Let me just say to you that in the hearing conducted by 
this Committee on June 17th, we learned of many issues that 
many borrowers and lenders have faced in applying and in using 
PPP dollars; witnesses outlining various areas of improvement, 
including and not limited to more explicit rules, clearer 
guidance around loan forgiveness, and more accessibility for 
minority-owned and underserved businesses. And they believe 
those are crucial issues.
    We learned that the structure and the implementation of PPP 
continues, as has been said, to disadvantaged, smaller 
businesses, specifically businesses of color. And that is due 
to the structural limitations that are built into the program.
    I think both of you would probably agree that PPP funding 
is heavily dependent on traditional financial institutions and 
prior banking relationships. Many of those institutions have 
been documented to have bias in their awarding of loans and 
bias in their consideration of loans, not to mention a 
different assignment of risk for persons who may be Black, 
Latino, or Asian.
    And so, those things have traditionally hampered Black 
businesses. And now when we get to this stage and this 
juncture, persons like myself, at least you have got to show me 
that this is not true.
    Prior to the June 17th hearing, both of you know that a 
letter was sent to each of your departments inquiring how and 
why minority businesses have had so much trouble and being 
denied in many instances outright for the EIDL and the Paycheck 
Protection Program. We needed transparency. We requested that 
you immediately begin publishing the demographic data on PPP 
recipients. On July 6th, that data was released and our worst 
anecdotal observations were confirmed, especially in my 
congressional district, where in the entire State of Maryland, 
which is not a large state--this is not California or Texas; 
there are only eight congressional districts--the district that 
I represent got----
    Chairwoman VELAZQUEZ. The gentleman's time----
    Mr. MFUME.--2.7 percent of the funding. And I thank you, 
Madam Chair. I am good.
    Chairwoman VELAZQUEZ.--time has expired. Yes, sir, you can 
finish your--yeah, okay.
    Now we recognize the gentleman from North Carolina, Mr. 
Bishop.
    Mr. BISHOP. Thank you, Chairman Velazquez and Ranking 
Member Chabot, and especially to all the Committee members 
physically present right here in this hearing room in 
Washington, along with our distinguished witnesses, which 
demonstrates the kind of the leadership the American people 
need to see. Thanks.
    I join those who have complimented you and those serving 
with you, especially for your historic accomplishment in 
implementing the Paycheck Protection Program.
    Secretary Mnuchin, as you have observed, the key to that 
historic success and speed was enlisting private sector 
financial institutions, including traditional banks, fintechs, 
credit unions, CDFIs, to serve as the conduit for massive 
relief to huge numbers of small businesses.
    Given that fantastic success, if Congress legislates 
additional relief we would be wise to continue the model of PPP 
and keep private sector lenders enlisted in the mission. But we 
have heard that lender fatigue is an issue. This is 
attributable in part to the fact that after these business 
entities jumped to respond to the call of the Federal 
Government, a number now face frivolous lawsuits, proving that 
too often when government is concerned, no good deed goes 
unpunished.
    As the administration looks at additional relief measures, 
it seems to me that we should try to prove that adage wrong for 
once, mainly by clarifying that the current ``hold harmless'' 
language which protects PPP lenders from liability applies 
throughout the life of the loan.
    Mr. Secretary and Madam Administrator, isn't it important 
to fight lender fatigue in this way? And will you work with us 
on this protection for lenders who have done so much to help in 
the current crisis?
    Secretary MNUCHIN. Yes, we will work with you. Thank you.
    Mr. BISHOP. Madam Administrator?
    Ms. CARRANZA. Likewise.
    Mr. BISHOP. Shouldn't we also be looking at that same issue 
for small businesses who face similar concerns, that is 
frivolous liability--or frivolous lawsuits?
    Ms. CARRANZA. Yes. One of the concerns I had was that we 
don't take any measures that would be punitive to the borrower 
or the lender, especially when we have started with 1,800 
authorized lenders and grew that to 5,500. And the Secretary 
and I are still working on additional nontraditional lenders 
that are still applying to provide PPP loans. And we are 
looking forward to making sure that the underserved, the sole 
proprietors, and the independent contractors, really have an 
opportunity with this over $100 billion that remain.
    Mr. BISHOP. Thank you, ma'am. Administrator Carranza, I 
want to follow up on an issue that has disturbed millions of 
Americans. It is now widely known that abortion provider 
Planned Parenthood brazenly violated the law concerning 
business affiliation by taking $80 million of PPP loans via its 
affiliates. The American people want to know how the SBA failed 
to act in real time to prevent this wrongdoing and how it will 
act quickly to compel the return of those funds and prosecute 
those responsible.
    Ms. CARRANZA. I will answer that question in two manners. 
One, we do not discuss individual loan issues publicly. And 
secondly, we will be reviewing all affiliations and all loans 
closely.
    Mr. BISHOP. Madam Chairman, I request unanimous consent to 
submit for the record the May 19, 2020, letter of SBA Associate 
Administrator William Manger to Planned Parenthood of Delaware, 
Incorporated, including the investigative document request and 
interrogatories appended thereto.
    Finally, Mr. Secretary, your testimony referred to your 
anticipation of additional relief to business and, importantly, 
that it will be targeted to the parts of the economy that need 
it most as our economy is starting to move from lockdown to 
restart. Undoubtedly, the lockdowns hit certain industries 
harder and I was pleased to hear that your answer to Ranking 
Member Chabot that in targeting the relief, the administration 
proposes to rely on neutral standards, such as documented 
pandemic-related revenue loss.
    Can you elaborate on the threshold you have in mind of 
revenue loss that would warrant relief? And do you believe that 
relief would be graduated in proportion to the degree of 
revenue loss?
    Secretary MNUCHIN. Well, I look forward to working with 
this Committee and the Senate committee to determine those 
issues. Again, as you just raised, we should look at whether it 
should be a specific number or graduated. So, yes, we look 
forward to working with you.
    But I think it is important that we target this to the 
businesses that are hardest hit.
    Mr. BISHOP. Agreed, Mr. Secretary. And I guess the last 
point, I am curious if you would agree that the reason to do 
that, to target it according to revenue loss rather than, say, 
picking specific industries, is that to do the latter would be 
both overinclusive and underinclusive. And you might 
arbitrarily pick winners and losers rather than responding to a 
particular need.
    Secretary MNUCHIN. Yes.
    Mr. BISHOP. Thank you, Madam Chairman.
    Chairwoman VELAZQUEZ. Time has expired. The gentlelady from 
California, Ms. Chu, is recognized for 5 minutes.
    Ms. CHU. Yes. Administrator Carranza, I would like to 
follow up on this issue of Planned Parenthood. You know, 
Planned Parenthood has been a lifeline for healthcare 
providers. Their affiliates serve nearly 3 million patients 
annually and is an important healthcare provider for many low-
income people across this Nation. And let me say that Planned 
Parenthood affiliates operate independently from the national 
organization, each having their own CEOs and board of 
directors, and, therefore, qualify for PPP.
    On May 28th, I co-wrote a letter to your agency along with 
Chairwoman Velazquez. It was signed by 166 Members of Congress. 
And we asked you to administer the PPP program in a uniform 
manner and specifically not to exclude any entity or nonprofit 
on the basis of political ideology.
    Now, this letter came in response to numerous Planned 
Parenthood affiliates learning that they were under 
investigation for violation of the PPP affiliation rules, even 
though they were not. So, I am deeply concerned about the 
motivations which would have prompted the SBA to conduct these 
investigations into the eligibility of Planned Parenthood 
affiliates, especially after several of them learned about 
these investigations first from Fox News rather than from the 
SBA directly.
    So, Administrator Carranza, of the over 500,000 healthcare 
and social assistance entities that have received PPP loans, 
can you tell the Committee how many investigations into 
violations of affiliation rules have been conducted? And has 
the SBA initiated such investigations against any other 
nonprofit organization for violation of affiliation rules under 
the PPP?
    Ms. CARRANZA. Congresswoman, as I addressed Congressman 
Bishop, at this point I am not able to discuss any particular 
loan review, and I am not in a position to discuss any others 
that we are reviewing. The specific one that you are referring 
to is under review, as well as others. But I will not get into 
any specifics about that, I am sorry.
    Ms. CHU. Well, now let me focus in on another issue. Mr. 
Secretary and Ms. Administrator, I would like to (inaudible) 
two mandates of the CARES Act. One is that all COVID-19 loan 
programs be translated into the 10 most commonly spoken 
languages other than English. The other mandate is that PPP 
should prioritize underserved businesses, such as those owned 
by women, minorities, and veterans. Despite this clear mandate, 
Treasury and SBA failed to even collect demographic data of PPP 
applicants.
    As a result, the loan level data released by your agencies 
show that, for instance, in California, only 6 percent of loans 
under 150,000 included information on race and ethnicity. And 
in May, the SBA inspector general testified to the Subcommittee 
that I Chair, the Oversight Committee, that agencies have 
failed to issue any formal guidance to lenders on how to 
prioritize underserved businesses and, of course, to adequately 
collect data.
    So, to demonstrate the seriousness of this failure, just 
this week the National Community Reinvestment Coalition 
published a study showing that Black business owners with 
identical or better finances than White business owners were 
less likely to be offered Federal assistance by participating 
PPP lenders.
    So, Mr. Secretary, please explain why you haven't provided 
this guidance to lending institutions on how they should be 
prioritizing the underserved and what you are doing to address 
this issue, as well as the collection of demographic data.
    And, Ms. Carranza, I do appreciate your testimony saying 
that the SBA has translated its resources to 17 languages. But 
the EIDL application still is not translated, and what is 
happening with that?
    Secretary MNUCHIN. So, first----
    Ms. CHU. So, Mr. Secretary?
    Secretary MNUCHIN. Yeah, first, let me just say the 
demographics information was always really intended to be 
collected on the forgiveness. So, again, this is something that 
we couldn't force people to do, but we hope that people do this 
and there will be a lot more information disclosed.
    We have made major efforts to work with the CDFIs for 
greater access. And, as I said, we do have access to census 
tracts, so, again, that is well represented. But we can always 
do a better job and we will.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired. 
Ms. Carranza, you may answer the question.
    Ms. CARRANZA. Yes. Concerning the language, you are 
correct, we have 17 languages, interpretations of the PPP 
application. I will have to look into how many languages in the 
EIDL, but that program was also to have bilingual.
    Chairwoman VELAZQUEZ. The gentleman from Pennsylvania, Mr. 
Evans, is recognized for 5 minutes.
    Mr. EVANS. Thank you, Madam Chair, for your leadership, 
especially on this subject and staying relentless on this 
subject. We are all concerned about it.
    Madam Chair, is it possible for the gentleman from 
Baltimore, that I could yield some of my time, I don't have 
much, to get the answer to this question?
    Chairwoman VELAZQUEZ. The gentleman from Maryland is 
recognized.
    Mr. EVANS. Yes.
    Mr. MFUME. Thank you, Madam Chair. I want to thank the 
gentleman from Pennsylvania. I will not take much of it.
    The point that I was trying to make, though, is that when 
the data did finally get released after our letter, the data 
that was released to all of us on July the 6th, it showed, Mr. 
Secretary and Madam Administrator, that in the State of 
Maryland, which only has eight congressional districts, the one 
that I currently represent now got 2.7 percent, 2.7 percent, of 
all of the funding, even though it is the most diverse district 
with Black, Latino, and Korean businesspersons anywhere in the 
state.
    Now, this district had been previously represented by the 
late Elijah Cummings, and so we have been without a 
representative for some time until I got sworn in. But there is 
no reason in God's world that there should be that kind of a 
disparity so obvious in a state and a district, in particular, 
that diverse.
    And I will yield back the time to the gentleman from 
Pennsylvania, and I appreciate it.
    Mr. EVANS. Thank you.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. EVANS. I want to specifically go to the Secretary of 
the Treasury and kind of piggybank a little bit on what was 
just stated. The question I want to ask, what are you doing to 
address the discriminatory loan practices? And what are you 
going to do to hold these banks accountable in terms of this 
process?
    We have seen that. I think the Chairperson and Chairwoman 
Maxine Waters, they work together about CDFIs, initial 
investment. What are you specifically as Secretary of 
Treasury--because, obviously, Black borrowers have been treated 
differently than White borrowers. So, can you speak to that, 
Mr. Secretary?
    Secretary MNUCHIN. Well, let me first say I have had 
multiple calls with Chairwoman Waters and they have been very 
constructive and very helpful. We have also made a major effort 
to work with the CDFIs and expand the CDFIs, and we are pleased 
with their work. Robert Smith, as I have commented before, has 
been particularly helpful. We have had weekly conference calls 
with him and his team.
    And we have to do a better job to make sure that all areas 
and all communities have access to these funds. And to the 
extent there are specific situations of discrimination or 
others, obviously we want to research that.
    Mr. EVANS. Well, when you say ``better,'' you have a lot of 
experience. I heard the gentleman from Colorado ask you about 
your banking background. Can you in a very specific way tell us 
what tools you intend to use, especially when you know that 
this problem does exist?
    Secretary MNUCHIN. Well, let me just repeat, the statistic 
we have on low- and moderate-income housing is we did have 
proper representation. Now, that obviously is different than 
other demographics.
    The CDFIs, I think, are best used at being able to access 
the underserved communities, and that is why we proactively put 
a CDFI set-aside as something we very much support. And we 
support an additional legislation making sure that the CDFIs 
have the proper resources to serve these communities.
    Mr. EVANS. Go to the administrator real quick. The EIDL 
program relating to constituents of mine who called about it, 
the question around credit and what, tell me what was your 
thinking in terms of receiving that information. Was there a 
ranking of order relating to EIDL distribution of grants? How 
exactly was yours or management around you relating to the EIDL 
program?
    Ms. CARRANZA. The EIDL advance administration was based on 
the number of applications that were, again, in the queue 
applying for the advance. And we based it on $1,000 per 
employee. It wasn't just an arbitrary number. It was a well-
assessed and analyzed strategy. It was discussed with Members 
of the Senate Small Business Committee.
    We advised them that in order to cover the number of 
applicants, the number small businesses that were applying for 
the advance, we needed to do something so that many more people 
would receive the funds. The average for both the agriculture 
and as well as normal businesses were about three employees per 
business, so it was about 3,000.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Mr. EVANS. Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. The gentleman from Illinois, Mr. 
Schneider, is recognized for 5 minutes.
    Mr. SCHNEIDER. Thank you, Madam Chair. And I want to thank 
you for holding this hearing. Congressional oversight of these 
unprecedented programs is critical, especially as we thinks 
strategically about our posture going into the fall. I want to 
thank you as always and to the Committee staff for the work you 
have been doing throughout this process.
    Secretary Mnuchin and Administrator Carranza, thank you for 
joining us today and for your work assisting small businesses 
throughout this pandemic.
    Administrator Carranza, you assured me that many of our 
complaints about the EIDL program, the lack of communication to 
borrowers, the backlog of applications, have been addressed. I 
heard you say today that you have compressed the time of 
processing to only 5 days. But I am concerned that, you know, 
at this moment, as we are in this kind of lull and it is kind 
of like a diner in between the lunch and the dinner rush, 
things are quiet, but it is going to get busy again soon when 
the money starts to run out.
    When you talked about the $150,000 as a cap and earlier you 
had mentioned that we, through our work, had provided a bridge, 
when you created that arbitrary cap that is a bridge that goes 
partway across the river. But without a full bridge, many of 
these businesses are going to find themselves in the river 
getting wet and many of them will drown. We need your help and 
I hope you will lift that cap and give the help that many of 
these businesses need.
    Economic uncertainty continues and will continue in the 
months ahead. Small businesses are still going to need more 
help in the fall. And so, today what I would like to discuss is 
Treasury and SBA's preparations to anticipate the expected 
surge in challenges in the fall.
    Earlier this week, I sent both of you a letter with 
questions I would like to discuss on the PPP and EIDL loans. 
How well they were implemented, how they helped the businesses, 
what gaps remain, and what your agencies are doing to 
anticipate that.
    In that vein, Secretary Mnuchin, what economic forecast 
remodeling, if any, has Treasury done to anticipate future 
needs?
    Secretary MNUCHIN. So, I think economic modeling is 
particularly hard at the moment because of the fact that we 
closed down the economy. This is not a typical economic 
situation. But we are relying upon our economic models where we 
do anticipate as we open the economy that we will have a 
significant improvement, as I have said, in the third quarter. 
But there will be industries, and we have done economic 
modeling within the Treasury on the industries that are going 
to be hit the hardest and the sizing that we need of additional 
PPP funds to address that. And we will be working with this 
Committee and with the Senate on that.
    Mr. SCHNEIDER. Do your models take into account the fact, 
as we are seeing in California, Texas, Arizona, Louisiana, 
Florida, a serious spike in cases? In California, you are 
seeing businesses close down again. Do the models take that 
into consideration?
    Secretary MNUCHIN. Well, again, let me just first say that 
traditional economic models, given the medical situation, are 
very hard. But, yes, we are looking at this across the entire 
U.S. and certain scenarios, as you said, where there will be a 
slowdown in opening and certain areas where things are doing 
better. But, again, that is the reason why I think we need 
additional funds to help these hardest hit businesses.
    Mr. SCHNEIDER. And I appreciate it is hard, but it is 
necessary. And it is also necessary for these businesses and 
other organizations, like our schools, to have clear and 
consistent guidance. I have had countless conversations with 
businesses, yesterday I had a group call, Zoom call, with 
school superintendents, and all of them are talking about the 
challenges they are facing with the lack of clarity and the 
guidance coming from both your Department, as well as others.
    And I asked the superintendents about the teachers. The 
teachers said they are absolutely terrified about going back to 
work. I don't think the government is doing nearly enough to 
provide that guidance. I hope we can see more guidance.
    But as you are looking at forward-thinking and what we 
might need, how do you incorporate the data you have, the 
uncertainty that lies ahead to make sure we can give better 
guidance to our businesses going forward?
    Secretary MNUCHIN. Well, I can assure you that the task 
force will be working and continues to work with the states on 
guidance. And obviously, the states refine it based upon the 
different areas.
    And on your comment, I expect that we will have a 
significant amount of money dedicated to K to 12 education to 
help them deal with, as they--the areas that reopen have the 
proper money to fit, so that it is safe for students and for 
teachers.
    Mr. SCHNEIDER. Thank you. Let me just say it is critical, 
not just the money, which desperately is needed, but the 
guidance on how to use that money and how best to open safely.
    In my last few seconds, Administrator Carranza, when we 
spoke last, I gave you last month a letter asking for an update 
on 59 businesses in my district that still have not received a 
decision on their EIDL application. As of today, 12, more than 
20 percent, of those companies are still waiting. Can you give 
us an estimate of when we will get these? Companies like Easy 
Cut in my districts are waiting and trying to get that 
information to survive this pandemic.
    Chairwoman VELAZQUEZ. The gentleman's time has expired. You 
may proceed to answer the question.
    Ms. CARRANZA. Congressman, I look forward to working with 
your office to identify the remaining balance of those 
businesses to come to a conclusion.
    Mr. SCHNEIDER. Thank you.
    Ms. CARRANZA. You are welcome.
    Mr. SCHNEIDER. With that, I yield back.
    Ms. CARRANZA. Thank you.
    Chairwoman VELAZQUEZ. The gentleman from New York, Mr. 
Espaillat, is recognized for 5 minutes.
    Mr. Espaillat, you need to unmute yourself.
    We cannot hear you, so I am going to recognize the 
gentleman from New York, Mr. Delgado, for 5 minutes.
    Mr. DELGADO. Thank you, Chairwoman. I want to thank both 
Administrator Carranza and Secretary Mnuchin for being with us 
today.
    And while the PPP and EIDL programs have been critical for 
small business owners, I want to take a moment to highlight a 
bill that I introduced that was included in the CARES package, 
the Small Business Repayment Relief Act, now known as the Small 
Business Debt Relief Program, which provides 6 months of 
payments--principal, interest, and fees--for qualified SBA 
loans, including SA, 504, and microloans.
    In the month of April, the SBA made payments to lenders 
just over 1 billion. And these payments corresponded to 263,192 
total borrowers. However, estimates provided by the 
Congressional Research Service indicate that there are about 
320,000 outstanding loans across these three programs.
    Administrator Carranza, you noted during a Senate Small 
Business Committee hearing last month that the SBA had taken 
steps to notify borrowers of this benefit, but needed to do 
more outreach to ensure borrowers who are eligible are aware of 
this benefit. Can you tell me what concrete steps you have 
taken to ensure that every eligible borrower is able to take 
advantage of these 6 months of payments?
    Ms. CARRANZA. Yes, we dealt with the lenders and 
intensified the communication. As a result of that, we have 
realized it has gone from $1 billion to $3 billion of debt 
relief. And we can do more because, as you stated, there is 
still an opportunity to work not only with the existing 
businesses, but others that are interested.
    And our 7(a) has grown significantly, which we are very 
pleased about; 504 is not growing as quickly, so we need to 
intensify in that particular area. I am very pleased to 
announce that within the HUBZone, as you know, the 504 falls 
into that area, the underserved market, we have over $106 
billion that have been appropriated under the PPP program.
    I look forward to working with your office if you have any 
particular areas that you would like me to concentrate on.
    Mr. DELGADO. Well, I would like to just follow up, if I 
may. You said you contacted the lenders and then you said you 
can do more. So, I am curious if you would be able to detail 
what the more would include.
    Ms. CARRANZA. Follow-up calls to the individuals that we 
initially contacted through our Office of Capital Access.
    Mr. DELGADO. Anything else?
    Ms. CARRANZA. Again, I look forward to speaking with you 
and working up a strategy that would--if you have a particular 
area that you believe we could do a better job of. I will go 
back to the office and inquire as to how are we working with 
all of the other program offices.
    Again, 7(a) has progressed well; 504 not as strong. But the 
debt relief has seen an increase of a couple of billion dollars 
since we last spoke. That is to say since the hearing. Thank 
you.
    Mr. DELGADO. Given that 7(a) has increased well, are there 
things that are being done with regards to that loan that could 
be utilized with regards to the other major loans that could 
help closing the gap we are speaking of now?
    Ms. CARRANZA. Well, Congressman, we have been talking about 
perhaps strengthening up all of the flagship loans and we have 
been communicating that information to Treasury.
    Mr. DELGADO. Okay. We should definitely coordinate with our 
offices and talk through a bit more what other concrete steps 
we could take to help facilitate this. You know, we also don't 
know how much has been spent through this program since May. We 
don't know how much has gone to new qualified loans compared to 
existing. We don't know how many borrowers have yet to receive 
it. We don't know which lenders have failed to comply.
    On June 5th, Senator Coons and I sent a letter requesting 
this information. Do you have this information available or 
when can we expect this information?
    Ms. CARRANZA. I look forward to working with your staff. 
And if we have the data, which we reconcile on a quarterly 
basis, from what I understand, we can make that available to 
you in short order.
    Mr. DELGADO. We sent the letter on June 5th, and I just 
want to know have you been in receipt of the letter?
    Ms. CARRANZA. I am sure our congressional legislative 
office is working on it, sir, so I look forward, again, to 
connect with your office and resolve that particular issue 
and----
    Mr. DELGADO. Yeah, we certainly----
    Ms. CARRANZA.--provide you the information that you need
    Mr. DELGADO. I appreciate that. We certainly would like to 
expedite this process given, you know, the urgent needs on the 
ground.
    Ms. CARRANZA. Thank you.
    Mr. DELGADO. And I am sure you can imagine the importance 
of that. So, with that, I will yield back my time.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Mr. Espaillat is recognized for 5 minutes. He is not ready. 
They are having some technical issues.
    The gentlelady from Minnesota, Ms. Craig.
    Mr. ESPAILLAT. Can you hear me now, Madam Chair?
    Chairwoman VELAZQUEZ. Yes, I can hear you.
    Mr. ESPAILLAT. Okay. Will you allow me to proceed?
    Chairwoman VELAZQUEZ. Go ahead.
    Mr. ESPAILLAT. Thank you, Madam Chair, and thank you----
    Chairwoman VELAZQUEZ. The gentleman is recognized for 5 
minutes.
    Mr. ESPAILLAT. Thank you, Madam Chair, and thank you, 
Ranking Member. Thank you, Administrator Carranza and Secretary 
Mnuchin.
    Several months back, I spoke at this Committee and I said 
that small businesses, mom-and-pop stores, throughout New York 
were really upset and were mad as hell. Because we all know, 
and I am really amazed to see how everybody is praising the PPP 
program and how it began, because we all know it was a debacle. 
The portal crashed. Traditional banking institutions went to 
their preferred customers. And only the well-heeled and 
connected were able to get access to the PPP program to the 
degree that many of them were shamed into returning the money 
because they were publicly embarrassed that they were accessing 
this money.
    And small businesses throughout America felt that Main 
Street should be bailed out. We have already bailed out Wall 
Street. We already bailed out the airline industry. We already 
bailed out a bunch of industries. But Main Street needed to be 
bailed out, and the start-up of the PPP program was a debacle. 
In fact, it took a carve-out of some money and acknowledging 
that we needed to engage community-based banking and CDFIs to 
access dollars and give them to the small businesses across 
Main Street in America.
    But even with that, we have just recently seen how a New 
York Times--a Wall Street Journal report on an investigation 
made by the New York City comptroller revealed that only 12 
percent of the 1.1 million businesses, employee-based 
businesses, in New York City got PPP loans in comparison to 20 
percent of businesses in states like Montana, Kansas, Iowa, 
Wyoming, et cetera. While the pandemic was ravaging New York, 
the PPP program was giving money to those states that were the 
least impacted by the pandemic.
    So, my first question is to you, Secretary. You mentioned 
that you will carve out some money for minority- and women-
owned businesses. How much money from the remaining part of the 
PPP program and additional funding that will come for it will 
you carve out for that particular part of the economy?
    And the second question is, Mr. Secretary, will you 
consider having some parity in the level of access to the PPP 
program for states like New York, which contributes far more to 
the Federal coffers and contributes in ways that other states 
don't, and yet they get far less back? Again, only 12 percent 
of businesses here got that as opposed to 20 percent in states 
like Kansas and Wyoming and Iowa and Montana.
    Those are my two questions. How much money will you carve 
out for minority- and women-owned businesses? And do you want--
is there an effort to give states like New York, which are 
hammered--the Bronx, which was hammered by the pandemic, had 
one of the lowest numbers of PPP loans given to their 
businesses. In fact, if you look at who got the loans you will 
see that many management consulting firms got it, legal 
services firms got it, as opposed to, let us say, for example, 
nursing homes, which I think were critical in bringing life-
and-death services to people impacted by the pandemic.
    So those are my two questions, Mr. Secretary.
    Secretary MNUCHIN. So, as it relates to the first question, 
a specific dollar amount for the set-aside, I will be working 
with this Committee and with the Senate to see what both 
committees think is appropriate for that. And I am sure we can 
reach an agreement that--something that is appropriate and 
significant.
    As it relates to New York, I am not sure why more PPP loans 
haven't been made there. There is still money available. So, to 
the extent there are businesses in your area that need loans, 
we are more than happy to work with you.
    I don't believe there should be set-asides for certain 
states. And I think, again, it took a while to get this up and 
running, but I think now we have a system that will work well 
in the next round.
    Mr. ESPAILLAT. Well, now, Mr. Secretary, now that the 
pandemic is ravaging the rest of the country, states like 
Florida, you must agree, right, that Florida, Texas, Arizona 
are getting hard-hit right now. And, in fact, some of those 
businesses may have to shut down.
    Perhaps as New York looks to reopen, this is the perfect 
time to focus in places in New York to see how we can help out 
New York. As goes New York goes the rest of the country. And 
so, is there a commitment to help, you know, small businesses, 
minority- and women-owned businesses, in New York State?
    Chairwoman VELAZQUEZ. The gentleman's time has expired. Now 
we recognize the gentlelady from Minnesota, Ms. Craig.
    Ms. CRAIG. Thank you so much, Madam Chairwoman. And I want 
to say thank you to Administrator Carranza and Secretary 
Mnuchin for your efforts over the course of the last 3 months. 
This Committee has been really a model of bipartisan efforts to 
save our small businesses. So, I just want to say thank you to 
my colleagues across the aisle, as well.
    Secretary Mnuchin, I was going to ask you and Administrator 
Carranza about extending the PPP applications for a second 
loan. You have indicated that you are open to that idea. I 
actually have the bill here in the House that would allow those 
hardest hit sectors, like restaurants and retail and 
hospitality, to come back and get a second forgivable loan if 
their revenue has been impacted by 50 percent or more and the 
size of their business is 100 or fewer employees with that 
remaining approximately $130 billion.
    I also had the bill a couple of weeks ago that passed the 
House, and thank you to the President for signing the extension 
of the loan program through August 8. I will tell you that I 
already this week have been meeting with small lenders, 
community lenders, who have been telling me that smallest of 
smallest businesses, loans of $6,000, $9,000, people are coming 
back and getting the PPP loan for the first time in the 
smallest of loans, which is really heartwarming. And I thank 
you for extending that.
    Secretary Mnuchin, can you just say a little bit more about 
the program as you would envision it of allowing those hardest 
hit sectors to come back? And I just want to make sure that I 
understand the direction that you and the administration are 
thinking, as well.
    Secretary MNUCHIN. Well, my suggestion and, again, let me 
just say we look forward to working with you and the Committee 
and the Senate, but my suggestion would be we have a program 
that works. We try to keep as many parts of the program 
consistent, we allow a second check, and that we put a 
limitation on a revenue decline and a size. And I understand 
your bill. I think that is a reasonable approach, but 
something, again, we are going to want to look--work with you, 
this Committee, the Senate to figure out what the appropriate 
revenue decline should be, what the size of the businesses 
should be, whether it should be 100 or slightly higher than 
that.
    But, again, we have complete agreement. There should be a 
second check available to the businesses that are hardest hit 
and there should be requirements around that.
    Ms. CRAIG. Thank you so much. My lenders and my small 
businesses as of this week are starting to ask the question, 
Administrator Carranza and Secretary Mnuchin, if there is any 
thought with respect to the smallest of smallest loans. I know 
there is a Senate bill that defines it as 150,000 or less, but 
that would absolve these businesses from essentially filling 
out those loan forgiveness applications just from the 
perspective of the bureaucracy of doing that.
    Is there any thought on either of your parts that whatever 
number we might not require or should we be advising our small 
businesses get your materials ready, everybody is going to have 
to fill out this loan forgiveness application?
    Secretary MNUCHIN. Well, we have put out what we call the 
EZ Form, and I think there are certain things that we can work 
with the Committee on in new legislation to simplify this even 
more. I am somewhat hesitant to just say a blank check, if you 
were 150,000 or less, you don't have to do anything, because, 
again, I am concerned about fraud and want to make sure that 
the oversight committees are comfortable that this money was 
used appropriately. So, I think some level of reporting in a 
simple way is important.
    Ms. CRAIG. Thank you so much. And then two final things 
very, very quickly.
    The initial CARES Act with the $1,200 Economic Impact 
payment, I know over the course of the next couple of weeks you 
are going to be working with the Senate, with the House perhaps 
on a second--or an additional bill. The 17- and 18-year-olds 
were left out as dependents, adult disabled dependents, college 
students like mine, who were back in my basement eating us out 
of house and home, were left out as dependents.
    Secretary Mnuchin, would you be open to including them in 
the next package and making that retroactive?
    Secretary MNUCHIN. So, let me just say from a policy 
standpoint, I understand that issue and I am sympathetic to it. 
There are some technical issues that the IRS and we have in 
administering that because of the way dependents were reported 
on tax returns. But we are trying to figure out if there is a 
way to do that.
    Ms. CRAIG. I appreciate that very much, sir.
    And with that, Madam Chairwoman, I will yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back. Let me 
thank the Administrator and the Secretary of the Treasury. 
Thank you again for being with us today to discuss your 
agencies' response to the COVID-19 pandemic.
    I am dedicated to pushing SBA and Treasury to prioritize 
our very small and underserved businesses because these 
communities are hurting. The programs have been fraught with 
challenges for participants and a lack of transparency for 
those of us seeking to conduct oversight.
    With that said, I expect regular updating to the data on 
PPP and forgiveness in the future. I also ask that you publish 
a comprehensive program guide. We cannot continue to operate 
this way. It is not good for borrowers; it is not good for 
lenders either. We cannot work when there are at least 22 
entering final rules and 49 frequently asked questions that 
borrowers and lenders must navigate. Understanding that this 
program was stood up with extraordinary speed, it is long 
overdue that a comprehensive guide is published.
    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 12:48 p.m., the committee was adjourned.]
    [Hon. Jovita Carranza did not submit his QFR's in a timely 
manner.]

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