[Congressional Record Volume 168, Number 97 (Tuesday, June 7, 2022)]
[House]
[Pages H5249-H5250]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PPP AND BANK FRAUD ENFORCEMENT HARMONIZATION ACT OF 2022

  Ms. VELAZQUEZ. Madam Speaker, I move to suspend the rules and pass 
the bill (H.R. 7352) to amend the Small Business Act to extend the 
statute of limitation for fraud by borrowers under the Paycheck 
Protection Program, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 7352

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``PPP and Bank Fraud 
     Enforcement Harmonization Act of 2022''.

     SEC. 2. FRAUD ENFORCEMENT HARMONIZATION.

       (a) Paycheck Protection Program.--Section 7(a)(36) of the 
     Small Business Act (15 U.S.C. 636(a)(36)) is amended by 
     adding at the end the following new subparagraph:
       ``(W) Fraud enforcement harmonization.--Notwithstanding any 
     other provision of law, any criminal charge or civil 
     enforcement action alleging that a borrower engaged in fraud 
     with respect to a covered loan guaranteed under this 
     paragraph shall be filed not later than 10 years after the 
     offense was committed.''.
       (b) Paycheck Protection Program Second Draw Loans.--Section 
     7(a)(37) of the Small Business Act (15 U.S.C. 636(a)(37)) is 
     amended by adding at the end the following new subparagraph:
       ``(P) Fraud enforcement harmonization.--Notwithstanding any 
     other provision of law, any criminal charge or civil 
     enforcement action alleging that a borrower engaged in fraud 
     with respect to a covered loan guaranteed under this 
     paragraph shall be filed not later than 10 years after the 
     offense was committed.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New York (Ms. Velazquez) and the gentleman from Missouri (Mr. 
Luetkemeyer) each will control 20 minutes.
  The Chair recognizes the gentlewoman from New York.


                             General Leave

  Ms. VELAZQUEZ. Madam Speaker, I ask unanimous consent that all 
Members have 5 legislative days in which to revise and extend their 
remarks and include extraneous material on the measure under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. VELAZQUEZ. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I thank all the members on the Small Business 
Committee for their work and support of the bills before us.
  The legislation we are considering is, once again, a product of our 
committee's bipartisanship and shows that we are committed to our 
Nation's entrepreneurs.
  The seven bipartisan bills we are considering will promote economic 
growth on our Main Streets in numerous ways.
  The first two reaffirm our commitment to being good stewards of 
taxpayer dollars, and the importance of holding pandemic fraudsters 
accountable for their crimes.
  The second pair of bills under consideration will help small firms 
attract and retain qualified employees by boosting apprenticeships and 
career and technical education programs.
  Finally, we will consider three bills to improve the Federal 
procurement process and promote opportunities for small businesses to 
secure contracts from the Federal Government.
  The first bill under consideration today is H.R. 7352, the PPP and 
Bank Fraud Enforcement Harmonization Act of 2022, introduced by myself 
and our ranking member from Missouri (Mr. Luetkemeyer).
  H.R. 7352 sets the statute of limitations for all cases of PPP fraud 
at 10 years, consistent with the statute of limitations for bank fraud.
  Under current law, bank-originated PPP fraud is being prosecuted as 
bank fraud, which has a 10-year statute of limitations.
  At the same time, PPP loans originated by nonbank lenders, including 
fintech companies, are often prosecuted as wire fraud, which carries a 
5-year statute of limitations.
  To address this difference, the bill extends the time for prosecutors 
to bring charges to 10 years for all cases of PPP fraud, regardless of 
whether the lender was a bank or fintech company.
  SBA's Office of Inspector General identified over 70,000 PPP loans 
totaling over $4.6 billion in potentially fraudulent PPP loans, many of 
which originated with fintechs.
  According to researchers at the University of Texas at Austin, 
fintech companies handled 75 percent of PPP loans connected to fraud by 
the DOJ, despite originating only 15 percent of the loans overall.
  As of March 10, the DOJ's efforts have resulted in criminal charges 
against over a thousand defendants with alleged losses exceeding $1.1 
billion and over 240 civil investigations into more than 1,800 
individuals and entities for alleged misconduct in connection with 
pandemic relief loans totaling more than $6 billion.
  Given the extent of potential fraud, especially among the subset of 
PPP loans originated by nonbank lenders, we must ensure prosecutors 
have enough time to fully investigate and bring fraud charges.
  As of now, the statute of limitations for nonbank PPP loans secured 
in April 2020 will expire in 2025 in most cases, less than 3 years 
away. That is not enough time given the complexity of these fraud 
schemes.
  As the chair of the Small Business Committee, I take my role over the 
SBA and its program very seriously. That is why I sponsored this bill 
to give the DOJ, FBI, and State and local law enforcement the resources 
and time they need to bring these bad actors to justice.
  Madam Speaker, I thank Ranking Member Luetkemeyer for joining me in 
leading this effort, and to the members of the Small Business Committee 
for their support.
  Madam Speaker, I urge my colleagues to support this bill, and I 
reserve the balance of my time.

                              {time}  1545

  Mr. LUETKEMEYER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in support of H.R. 7352, the PPP and Bank Fraud 
Enforcement Harmonization Act of 2022.
  Inflation and price increases continue to hinder all Americans and 
especially small businesses and their workers. Prices at the pump and 
prices on the shelves rattle the mettle of the Nation's job creators. 
Month after month, small businesses face price increases that not only 
prevent expansion and growth but also hamper recovery. These economic 
conditions must improve, and we must get a firm grip on reckless 
spending coming out of Washington. Similarly, we must take on a 
stronger oversight role when it comes to investigating fraudulent 
COVID-19 behavior.
  When America's small businesses faced State and local COVID shutdown 
orders, Congress moved quickly and stood up the Paycheck Protection 
Program. To ensure small businesses and their workers received PPP 
relief in an efficient and speedy manner, Congress required private-
sector lenders to be the drivers of the program. The result speaks 
volumes with nearly $800 billion disbursed to small businesses.
  As the Republican leader on the Committee on Small Business, I often 
hear about how important the program was for small businesses across 
our great Nation. It was the lifeline that many of them needed to be 
able to survive.
  While most lenders' fraud defenses were strong due to Federal 
financial rules such as Know Your Customer, fraudulent behavior did 
take place. Investigations are underway, but more time will be needed 
and required to bring justice to those who defrauded the program.
  Depending on the type of lender that participated in the program, the 
current statute of limitations ranges from 5 years for wire fraud that 
categorizes

[[Page H5250]]

many fintech lenders, who have been associated with problematic loans, 
to 10 years for banks and credit unions that fall under bank fraud.
  H.R. 7352, the PPP and Bank Fraud Enforcement Harmonization Act of 
2022, takes important steps to create an across-the-board 10-year 
statute of limitations on all loans handed out through the PPP program. 
This change will ensure all law enforcement and inspectors general have 
the time to track down all wrongdoing no matter the type of lender.
  H.R. 7352 was created via voice vote in committee. I thank the chair 
for treating this issue with the priority it deserves and for working 
with me on the bills before us today. This bill is a step in the right 
direction, and I urge my colleagues to support it.
  In closing, Madam Speaker, when Congress raced to save American small 
businesses, criminal actors lurked in the shadows. Although one of the 
most popular COVID-19 relief measures, the PPP program, has firmly 
moved into the loan forgiveness period, the investigations surrounding 
illicit behavior have just begun.
  H.R. 7352 will wisely ensure all loans handed out through the 
program, no matter the type of lender, have a statute of limitations 
window of 10 years.
  According to some of the most recent SBA inspector general reports, 
nearly $4.6 billion of the $800 billion could be potentially 
fraudulent. While these numbers will surely change, it is paramount 
that we provide law enforcement the runway to track down all fraudulent 
behavior. These are American taxpayer dollars on the line, and they 
must be protected.
  Madam Speaker, I urge my colleagues to support this legislation, and 
I yield back the balance of my time.
  Ms. VELAZQUEZ. Madam Speaker, I yield myself the balance of my time.
  Madam Speaker, we must continue supporting the work of our Federal, 
State, and local law enforcement agencies as they investigate and 
prosecute pandemic loan fraud. It appears the bulk of PPP loan fraud 
was originated by nonbank lenders and fintech companies, which may not 
be prosecuted as bank fraud and is therefore subject to a much shorter 
statute of limitations.
  This presents the possibility that pandemic loan fraudsters may get 
off the hook because the statute of limitations expired. We simply 
cannot let this happen. This bill would give law enforcement agencies 
the time needed to hold fraudsters accountable and bring them to 
justice.
  Once again, I thank our ranking member, Mr. Luetkemeyer, for working 
with me to lead this important effort, and all the members of the Small 
Business Committee for their bipartisan work on this bill.
  Madam Speaker, I urge my colleagues to vote ``yes,'' and I yield back 
the balance of my time.
  Ms. JACKSON LEE. Madam Speaker, I rise in support of H.R. 7352--the 
``PPP and Bank Fraud Enforcement Harmonization Act of 2022'' extends 
the statute of limitation and provides a timeframe in which criminal 
charges can be filed against those accused of fraud in connection with 
the ``Paycheck Protection Program'' and ``Paycheck Protection Program 
Second Draw Loans'' program.
  The Paycheck Protection Program commonly known as the ``PPP'' loan 
was created as a part of the CARES Act--the Covid Aid, Relief, and 
Economic Security Act--of March 2020.
  The PPP loan was established to help small businesses survive through 
the COVID-19 pandemic of 2020, so that they may be able to pay their 
employees and keep their businesses operating during the tumultuous 
challenges imposed by COVID-19.
  I urge everyone to remember the times before the recent reemergence 
of a ``business as usual'' stance that many have now taken, and 
remember the omnipresent news reports about the horrific and ever-
increasing death toll.
  Any person who was willing, for their own financial gain, to take 
advantage of that situation and the emergency funding that was intended 
for those who needed it most during the gruesome pandemic deserves to 
be punished for their heinous actions.
  H.R. 7352 would extend the statute of limitation for prosecution of 
loans classified within the PPP and Economic Injury Disaster Loan 
(EIDL) categories under the Small Business Act.
  As it stands now, bank-originated PPP fraud is being prosecuted as 
bank fraud which carries a 10-year statute of limitations.
  In contrast, loans that originated through financial technology 
avenues--known as Fintech--are currently subject to only a 5-year 
statute of limitations because they are governed by wire fraud laws.
  H.R. 7352 will ensure that we are doing our duty to uphold justice 
and gather all necessary information and evidence, while extending the 
reach of the law against these violators.
  PPP fraud comes at the expense of all Americans, tax-paying Americans 
who work hard for the money they earn.
  H.R. 7352 will ensure that there's ample time allotted for special 
attention to the complex nature of PPP loan fraud.
  Ensuring that the timeframe is fair and commensurate with the 
severity of the nature of loan fraud, H.R. 7352 will make sure that 
justice is served in every regard.
  I ask that each of my colleagues joins me in support of H.R. 7352.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from New York (Ms. Velazquez) that the House suspend the 
rules and pass the bill, H.R. 7352.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mrs. GREENE of Georgia. Madam Speaker, on that I demand the yeas and 
nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
are postponed.

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