[Congressional Record Volume 168, Number 97 (Tuesday, June 7, 2022)]
[House]
[Pages H5250-H5252]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         COVID-19 EIDL FRAUD STATUTE OF LIMITATIONS ACT OF 2022

  Ms. VELAZQUEZ. Madam Speaker, I move to suspend the rules and pass 
the bill (H.R. 7334) to extend the statute of limitations for fraud by 
borrowers under certain COVID-19 economic injury disaster loan programs 
of the Small Business Administration, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 7334

       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 ``COVID-19 EIDL Fraud Statute 
     of Limitations Act of 2022''.

     SEC. 2. EXTENSION OF STATUTE OF LIMITATIONS FOR CERTAIN 
                   COVID-19 ECONOMIC INJURY DISASTER LOAN 
                   PROGRAMS.

       (a) Certain Economic Injury Disaster Loans.--Section 7(b) 
     of the Small Business Act (15 U.S.C. 636(b)) is amended by 
     inserting after paragraph (15) the following new paragraph:
       ``(16) Statute of limitations.--Notwithstanding any other 
     provision of law, any criminal charge or civil enforcement 
     action alleging that a borrower engaged in fraud with respect 
     to a loan made under this subsection in response to COVID-19 
     during the covered period (as defined in section 1110(a) of 
     the CARES Act) shall be filed not later than 10 years after 
     the offense was committed.''.
       (b) EIDL Advances.--Section 1110(e) of the CARES Act (15 
     U.S.C. 9009(e)) is amended by adding at the end the following 
     new paragraph:
       ``(9) Statute of limitations.--Notwithstanding any other 
     provision of law, any criminal charge or civil enforcement 
     action alleging that a borrower engaged in fraud with respect 
     to the use of an advance received under this subsection shall 
     be filed not later than 10 years after the offense was 
     committed.''.
       (c) Targeted EIDL Advances.--Section 331 of the Economic 
     Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act 
     (15 U.S.C. 9009b) is amended by adding at the end the 
     following new subsection:
       ``(i) Statute of Limitations.--Notwithstanding any other 
     provision of law, any criminal charge or civil enforcement 
     action alleging that a borrower engaged in fraud with respect 
     to the use of any amount received pursuant to this section 
     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 may 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.

[[Page H5251]]

  Madam Speaker, I rise in support of H.R. 7334, the COVID-19 EIDL 
Fraud Statute of Limitations Act of 2022, introduced by the ranking 
member, Mr. Luetkemeyer, and cosponsored by myself.
  As with the PPP and Bank Fraud Enforcement Harmonization Act, this 
bill will extend the statute of limitations for COVID-19 EIDL fraud 
cases to 10 years to allow prosecutors more time to do their jobs. The 
bills are companion pieces of legislation and much-needed to help law 
enforcement investigate and bring fraud charges.
  Congress amended the SBA disaster loan program at the start of the 
pandemic to allow small businesses facing economic injury due to COVID 
to apply for SBA disaster loans which were originally designed for 
natural disasters. At the same time, SBA lowered the guardrails and 
disbursed funds quickly to provide stability to the small business 
economy, which, as we all know, was facing unprecedented uncertainty in 
2020.
  In a very short time, the program went from one that responds to 
natural disasters in a few, distinct geographic areas, depending on the 
nature of the disaster, to one that was responding to a nationwide 
crisis almost overnight. Overall, the COVID EIDL program approved 
almost 4 million loans totaling over $378 billion.
  The SBA administrator transitioned the program to the Office of 
Capital Access to dedicate additional management capacity. Since that 
transition, the office closed out a backlog of nearly 1 million 
applicants and increased loan officer productivity while improving the 
customer service experience and solidifying robust fraud controls. 
Nevertheless, throughout the pandemic, our committee held numerous 
oversight hearings with SBA's inspector general who testified that 
there is a great deal of potential fraud in this program, and it would 
be a decades-long effort to fully investigate.
  The IG's office identified $78 billion in potentially fraudulent 
activity in the EIDL program as well as over $6 billion in loans and 
grants related to identity theft allegations. Given the degree of 
potential fraud, we need to give prosecutors more time to bring 
fraudsters to justice. This bill will give law enforcement the time 
needed to conduct their investigations of COVID EIDL fraud.
  That is why I cosponsored this bill which will go a long way towards 
enhancing oversight and accountability.
  Madam Speaker, I thank the ranking member, Mr. Luetkemeyer, for 
introducing this important measure, and to the members of the Small 
Business Committee for unanimously approving this important piece of 
legislation.
  I urge all Members to support this bill, and I reserve the balance of 
my time.
  Mr. LUETKEMEYER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in support of H.R. 7334, the COVID-19 EIDL 
Fraud Statute of Limitations Act of 2022.
  Similar to the previous bill, the Paycheck Protection Program, the 
Small Business Administration's Economic Injury Disaster Loan program, 
known as EIDL, was also activated as the Nation's small businesses were 
being shut down due to COVID-19. However, unlike PPP, EIDL was a direct 
loan and grant program through the SBA. Unfortunately, the SBA acting 
as a direct lender and grantor has been problematic and has resulted in 
billions of potentially fraudulent dollars flowing to criminals.
  In fact, the SBA's inspector general has reported that as much as 
$84.4 billion within the $400 billion program could be fraudulent. 
Moreover, over 1 million applications have been flagged for identity 
theft concerns. This is unacceptable and must be addressed.
  H.R. 7334, the COVID-19 EIDL Fraud Statute of Limitations Act of 2022 
takes the first step and establishes a 10-year statute of limitations 
window to ensure law enforcement and the SBA's inspector general have 
the time to investigate all wrongdoing. This change is even more 
important as the SBA continues to defer all EIDL payments, thus 
clouding the true extent of fraud within the program.
  Madam Speaker, I thank the chair for working with me on this measure 
which passed out of committee unanimously earlier in May.
  If we are to take COVID relief fraud seriously, then we need to 
ensure law enforcement has what it needs to catch and prosecute all 
criminals. H.R. 7334 provides them the time to act.
  Madam Speaker, I wholeheartedly believe this bill is instrumental 
when it comes to fraud recoupment. I urge my colleagues to support it, 
and I reserve the balance of my time.
  Ms. VELAZQUEZ. Madam Speaker, I continue to reserve the balance of my 
time.
  Mr. LUETKEMEYER. Madam Speaker, I yield such time as he may consume 
to the gentleman from Pennsylvania (Mr. Meuser), who is the ranking 
member of the Subcommittee on Economic Growth, Tax and Capital Access.
  Mr. MEUSER. Madam Speaker, I thank the ranking member, Mr. 
Luetkemeyer, for his leadership on this bill and in committee.
  The EIDL program, Madam Speaker, was established to deliver relief to 
struggling small businesses during the pandemic. This is why I rise 
today in support of H.R. 7334.
  Unlike the public-private partnership that was Paycheck Protection 
Program, the EIDL program was a direct loan program administered by the 
SBA, not in partnership with private lenders.

  The SBA's inspector general has estimated that there is approximately 
$84.4 billion in potential fraudulent EIDL activity, over 20 percent of 
all EIDL loans extended.
  With this massive level of potential fraud, it is imperative that 
this House passes Ranking Member Luetkemeyer's bill to extend the 
current 5-year statute of limitations for SBA grants and loans to 10 
years. In doing so we can allow for authorities to investigate the 
egregious amount of potential fraud in the EIDL program and ensure 
accountability for those who took advantage of the EIDL program to 
defraud the American people.
  Madam Speaker, I note that this bill had strong bipartisan support 
and passed out of the Small Business Committee by voice vote last 
month. I urge my colleagues to support this important legislation.
  Ms. VELAZQUEZ. Madam Speaker, I continue to reserve the balance of my 
time.
  Mr. LUETKEMEYER. Madam Speaker, I yield such time as she may consume 
to the gentlewoman from New York (Ms. Tenney), who is the ranking 
member of the Subcommittee on Underserved, Agricultural, and Rural 
Business Development.

                              {time}  1600

  Ms. TENNEY. Madam Speaker, since the onset of the pandemic, Congress 
has passed several COVID-19 relief bills totaling an unprecedented $5.3 
trillion. While some of this spending was unwise, other programs, like 
the Paycheck Protection Program, provided much-needed relief to 
employers and businesses devastated by the pandemic.
  One particular area of concern is the COVID-19 Economic Industry 
Disaster Loan program, otherwise known as EIDL. This program, unlike 
other relief programs, was direct lending by the SBA, the Small 
Business Administration. This means the agency did not partner with our 
local banks and credit unions and, instead, approved and administered 
these loans directly.
  Since the COVID-19 EIDL funding passed, we have learned of countless 
cases of fraud, waste, and abuse. The Federal Government is simply not 
set up to be a direct lender.
  This is one reason I introduced the House version of the Transparency 
in COVID-19 Expenditures Act, which would require an audit of all 
Federal COVID-19 relief spending. There is obviously room for 
improvement in providing additional oversight and returning 
fraudulently awarded funds back to the taxpayers.
  In response, Ranking Member Luetkemeyer has done great work 
introducing the COVID-19 Economic Industry Disaster Loans Fraud Statute 
of Limitations Act of 2022 that will help fix part of the shortcomings 
by expanding the statute of limitations for EIDL loans and fraud from 6 
to 10 years, the same as bank fraud. This will give officials a greater 
window to track down fraudulent activity and hold bad actors 
accountable.
  No one should be wrongly profiting from the need to distribute aid 
during this pandemic. The American taxpayers deserve better, and I 
applaud

[[Page H5252]]

the ranking member's efforts on this. I urge all my colleagues to 
support this.
  Ms. VELAZQUEZ. Madam Speaker, I have no further speakers, and I am 
prepared to close. I reserve the balance of my time.
  Mr. LUETKEMEYER. Madam Speaker, I have no further speakers, and I am 
prepared to close. I yield myself such time as I may consume.
  Madam Speaker, fraud associated with the EIDL program is a serious 
matter. Due to mismanagement and poor oversight capabilities, the EIDL 
program has been overwhelmed with fraud.
  As I mentioned earlier, the SBA's inspector general has found more 
than $80 billion within the $400 billion program that could potentially 
be fraudulent. This represents a double-digit fraud rate.
  However, recouping these dollars has just begun and the current 
statute of limitations is limited. My bill, H.R. 7334, will ensure the 
statute of limitations runway is recalibrated and extended out to 10 
years. By passing this bill, Congress will allow the time needed to 
correct all wrongdoing within the program.
  I urge my colleagues to support H.R. 7334, and I yield back the 
balance of my time.
  Ms. VELAZQUEZ. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, our Federal, State, and local law enforcement agencies 
are diligently investigating and prosecuting pandemic loan fraud, and 
we must continue to support those efforts, whether in the COVID EIDL 
program or the Paycheck Protection Program.
  We all agree that anyone who took advantage of this once-in-a-
lifetime crisis to commit fraud and enrich themselves at the expense of 
hardworking Main Street businesses must be held accountable.
  It is unacceptable to allow anyone to get off the hook for defrauding 
a government relief program simply because the statute of limitations 
expired. We cannot let this happen, and we must pass this bill.
  Once again, I thank our Ranking Member, Mr. Luetkemeyer, for 
introducing this important measure, and I am pleased to support it.
  I also thank all the members of the Small Business Committee for 
their bipartisan work on this bill, and I urge my colleagues to vote 
``yes.''
  Madam Speaker, I yield back the balance of my time.
  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. 7334.
  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.

                          ____________________