Transcripts For CSPAN Small Business Assn. Administrator Testifies On COVID-19 Loan Program 20220816

The Small Business committee will come to order. Before i give my Opening Statement in regard to today subject, i do want to express all of our concerns about the devastation thats taking place in kentucky. The flooding has been just horrible to see. We know these Natural Disasters are very, very hard on a community, and our prayers are with those that been victimized by the flooding. And we recognize there are many needs to how we respond as a nation to deal with this Natural Disaster. And i know our country will do everything we can to see the resiliency of the people in kentucky. I say that particularly knowing about our Ranking Member, senator paul, represents the great state of kentucky. And our thoughts are with them. I also recognize the Small Business relief is only one part of that recovery. I commend the sbas and asked that yesterday relief to Small Businesses, nonprofits, homeowners and renters in the region. Small Business Committee will work with the sba to get this information out to the effective areas to help the people of southeastern kentucky get back on their feet. I want to thank senator paul for his cooperation in arranging for todays hearing. Its been a challenge on scheduling. Thank you, senator ernst for stepping up and being willing to take on the responsibilities. I know senator paul had a conflict and we certainly understand that, but he cooperated with us and senator ernst is available and i thank her for being able to take on this position today. And let me thank patrick kelley, the associate Administrator Office of Capital Access and Small Business administration for being here today and being willing to help us understand we are in regards to the eidl program. One of the most important functions of this committee is oversight. Yes, we want to pass the right policies and make sure that they are adequately drafted and funded, that you have the resources and the direction you need. But then its our responsibility to make sure these programs are being carried out as effectively as possible. So we look at todays hearing, which is oversight the Economic Injury Disaster Loan Program during covid, and recognize that this was an incredible undertaking. On april 24, 2020, 50 billion of subsidy was provided for the Economic Injury Disaster Loan Program under covid. On may 7, the Small Business administration announced the program and imposed when their 50,000 cap even cap even though this program under law allows for loans up to 2 million. The Trump Administration decided to limit that to 150,000 cap. We were not happy about that, and members of this committee as well as many members of the senate expressed our concern that 150,000 cap was arbitrary, and we wanted to see that implemented at the full Amount Congress authorized at 2 million. By july 20, the sba had entered into 3. 1 million loans for 169 billion. Let me repeat that again, 3. 1 million loans by july 201000000 loans by july 20. April 21, under the Biden Administration april 21 of this year, Biden Administration increased the cap from 150,000, the 500,000, and then in september increased it to the full 2 million. We were were all very pleased about that. And we were very pleased that we were able to increase the total amount available to the 2 million limit. The Biden Administration deserves a high marks for implementing the congressional intent at 2 million. The sba administer a program and now theres almost 4 million loans that have been issued under the covid eidl program. Thats quite a record. Over the past two years the sba has transformed the relatively small and unknown program intended to supporting your deeds following Natural Disasters into one of the federal governments primary tool to combat the Economic Impact of covid19 pandemic. 3. 9 billion covid eidl loans the sba has issued since april 2020, more than all the loans that have been issued during the entire history of the Disaster Loan Program. Just tells you how much more additional responsibilities the sba took over and have delivered on those programs. The eidl loan program is a source of hope for Small Businesses. Its the critical capital they need during a pandemic, provides a fixed rate low interest longterm capital that is absolutely essential for Small Businesses. They dont have the resiliency. This gives them the hope of being able to stay in business. In december of last year, december 31, no new applications were allowed under law, and the sba basically closed the process for new applications. Heres where the confusion and frustration comes down. On the winding down of the program. And heres where we are really baffled as to the weight and information we received from the sba way first of april 28 of this year, the sba said that funding was exhausted. On may 6, they said the deadline for Loan Modifications appeals and denials for reconsideration. Yet on april 11, we were informed by the sba that it had 1. 3 billion of transfer funds from the American Rescue plan, 1. 2 billion available in regards to canceled loans. So we didnt understand that they gave the explanation on april 28 that the sba that funding had been exhausted. They set a date of april 16 for excuse me, sent out another notice on april 16 that all workable files have been processed. So what im confused about, we have a large number of Small Business owners that are in the process with her sba eidl loan receiving information from the sba that theyve exhausted funding, that they are all workable files have been made and yet they hadnt been notified in regards to their individual cases. On june 22, applications couldnt be processed because of lack of funds and other statement made by the sba. Yet in june staff called with minister kelly we were informed that 800 billion were made made in the eidl program. Theres frustration and anger out there. We have 41,000 applicants applicants who have never received terminations. We have 125 applicants that of an approved that havent received their funds. I can tell you, i talked to my state workers all the time handle the calls from the Small Business community, and they are my frontline workers. And there are Small Business owners are really frustrated. They have gotten insufficient information from the sba. They believe their applications have never been litigated, never been completed, and they want to know why. I want a straight answer. As i said earlier the Small Business community is in the Growth Engine of our country. Its were innovation takes place. Small Business Owners dont have the same deep pockets and resiliency. They need to know what is going on with their applications. If they are in eligible then declared ineligible. Let them handle it or take an appeal but dont leave them in the lurch pics i hope that the string will have an opportunity to get answers to those questions and that we can have the completion of the eidl loant represents the values of our committees and policy that we develop and values of the program that are so important to Small Businesses. With that levy turned over to senator ernst. Thank you, senator cardin, and i also want to express my sympathies to those families and those communities that were impacted in kentucky. I think all of us are watching and praying for the best, but understanding this is a very difficult time for them. So thank you for mentioning that. And thank you as well, chairman cardin for holding this important hearing to discuss the sbas lindy and Disaster Assistance program. The four we move forward any further on this i cant overstate how harmful inflation has been for Small Businesses in iowa and throughout the nation. As part of my 99 county tour across iowa i stick with those that speak with a Small Business owners are continuing to tell me how recordsetting levels of inflation have created a significant financial burden across their value chains. The most recent Consumer Price index report shows that prices increased by 9. 1 over the last 12 months. The largest yearoveryear increase in over 40 years. Over the same time the Producer Price index increased by 11. 3 , indicating that most Small Businesses are experiencing increasingly diminished margins, impacting their ability to provide paychecks to working families, especially those that reside in my rural communities. Small businesses are the backbone of the american economy, and despite being told otherwise, Small Business owners know the impact of inflation on their businesses, not transitory and it is proving that could be short term. This inflation crisis has created a valueadded tax that is deeply impacted their economic security. Which is why it is deeply troubling to me that the democrats in Congress Plan to move forward with a reckless partisan tax and spending spree focus on raising taxes to pay for electric vehicles for the rich, hamstring our manufacturers, and all sorts f other pet projects of far left interest groups. The covid Economic Injury Disaster Loan Program, or eidl, provided support for Small Businesses facing Financial Hardship as a result of the covid19 pandemic here as the rush of pandemic aid went out the door, bad actors took advantage of the american taxpayers generosity. We now know fraudsters built millions and millions of sba and fraudulent loans from this program. But as it transitions from supporting Small Businesses to servicing loans, i am concerned about the sbas lack of attentiveness to ensuring Law Enforcement has everything it needs to pursue those who have defrauded the taxpayers. Wrongfully awarded dollars must be returned to the program and return to the american taxpayer. Timely action is needed in order to do so. In a similar vein, the sba has unlawfully approved nearly 100 million in forgivable ppp loads to planned parenthood affiliates. To make matters worse, the sba forgave 34 of these loans, despite it being a clear violation of the affiliation role. Yet to date the sba has not launched an investigation into this issue or make any effort to recoup the ineligible funds. It is critically important to protect the integrity of the Capital Access programs that are intended to provide support to Small Businesses from fraud and ineligible distribution. Mr. Kelly, thank you for appearing before us today. I look forward to working together in the future to ensure that taxpayer money is protected from fraud and that bad actors are held accountable. Thank you. Thank you, senator cardin. Thank you, very much for your, again, taking on the responsibility today. I want to ask consent to put in the record letters that were written to administrator guzman on may 6, 2022, two, from senator van hollen and myself, and july 15, 2022, from a group of senators headed by senator cornyn and myself in regards to our concerns as to why certain information was given to our constituents and when we were told there was money available. Administrator kelley, thank you again for being here. As i pointed out earlier we appreciate your leadership on this program, the office of Capital Access is critically important to Small Businesses. The role of that committee has quadrupled, maybe more than that, since covid19 so we know that you stood up and agency that was meant for certain purpose that was really tested to its limit and we thank you very much for your service and thank you for being here and you may proceed. Great. Thank you, chairman cardin. Thank you, senator ernst. I, too, want to extend my sympathies to the commonwealth of kentucky. Obviously 35 families to date no longer have a loved one and there are hundreds of others have not been sent there as chairman cardin mentioned in his Opening Statement, President Biden declared a disaster area to five counties and obviously we will work to expand that if necessary, and obviously work to help all of the survivors. On behalf of the administrator guzman, im happy to be here with the committee today to answer any and all questions. My name is patrick kelley. I am the associate administrator of the office of Capital Access at the sba and i have been since arch first of 2021. First, i would like to echo the chairmans comment regarding the work of the Civil Servants at the sba. It truly is a privilege for me to have a Second Opportunity to work with people during a time when so much was asked of them for the last 24 months. On balance these are some of the best people ive ever worked with across the private sector and Public Sector, and i will continue to enjoy the opportunity to serve the American People. We oversee a bunch of different carriers act and economic aid act programs, and covid eidl certainly is a focused today. That particular program as was mentioned by chairman cardin serviced about 4 million Small Businesses, and roughly 400 billion in financing. The program also 72 of those loans went to Small Businesses with ten or fewer employees. 50 of the recipients were not able to access the ppp programs i think one of the Great Success stories about this, what i characterize is uber credit out of it what else were program, its a success getting to all corners of our society, and in addition to the covid eidl program just to provide an update for you and the members, we are obviously working on forgiveness in the ppp program. We are currently parking 10. 4 million loans out of the 11. 4 million forgiven, and we expect that the remaining 1 million will seek forgiveness this fall as the april, may, june 2021 ppp loans hit their ten month mark and begin to make payments. We have provided direct forgiveness to assist 1500 lenders, which is amounted to 2 million loans being serviced by the sba on behalf of lenders and borrowers to assist with that forgiveness. That particular program was also coincided with obviously the Restaurant Revitalization Program. I do want to thank the chairman said leadership on the restaurant program. We worked diligently to roll them out with members of this committee, staff, as well as the house and the 101,000 businesses were supported for 20. 8 6 billion. The last thing i will add before we get to the questions, which im looking forward to, hopefully helping folks understand what were trying to accomplish, is just to provide some context to the breadth of what the sba was asked to do. The office of advocacy at the sba estimated that in 2021, total for Small Business and Mediumsized Enterprises receiving capital from any source, any private sector lender was 651 651 billi. In the covid eidl program in 2021 we put out 200 billion on top of the 167 billion that the chairman reference in 2020. So it is absolutely the case that the sba has played an outside role as administrator guzman has worked with this committee and the nation to provide. Thank you. Well, again thank you and i agree with your last statement, that the sba has played an outside role, no question about it. It stepped up during the pandemic, and i agree with you with Civil Servants, and i give our real thanks to the incredible amount of work that they put out to get, help out quickly both with the ppp b program and i loan program, the eidl advanced program and then later with a shuttered venue in the restaurant programs. It was an incredible effort, and it saved Small Businesses. They exist today that would not have but for the billy to get those programs out, and has a point out this is all bipartisan. The bills were developed bipartisan and this hearing in regards to how the eidl program is being wound down, there is bipartisan interest to see it done right. Some want to get the numbers right because we had like 3. 9 million loans that were given out. We have we think 41,000 people who are looking for determinations that are not yet been done. We have seen at times the sba say that these are unworkable. To our knowledge, those 41,000 Small Businesses have not been informed as to their status. So they are sitting out there hoping that theyre going to get a positive response, but they want a response. They want to move on with their life. They want to know whether they cant or cannot access the funds because they have to plan their businesses. We believe there are 41,000 that are in that status, and then we had 125,000 Small Businesses that thought they were going to get their funds, copy and been approved for the funds and havent gotten their funds, and then they get notices that theres no funds available, but yet we have been told that there is money there. So the funds are there so it seems like they are not getting accurate information, which is extremely frustrating, and they call our office and they call your office, and they call every senator in this country with legitimate concerns. So can you clarify the numbers for us . How many applications are still pending . Are they workable or not workable . Why havent the Small Businesses been notified . And arthur applications that it been approved but have not been acted upon . And for what reason would that be . Are there applications yes, i will get to all of that. So first i just want to start the top with 125,000 so we can address that. The 125,000 folks have obligated funds to them. They could close those today with the assistance of an Sba District Office directly themselves with the call center for the specific covid eidl program, but that money is theirs. We will not cancel those funds. Obviously at some point later this year we will send out notice and start to see if folks want to seek this. Obviously its a loan product that has to be paid back. Obviously very favorable terms but still nonetheless a loan product. So at their discretion each of those 125,000 can close that loan. So i welcome the opportunity to make sure that anybody in any of the offices is clear that those folks have money and can be funded. And those funds are there . Yes. Is no problem . Correct. So and that, i started their to then moved to the 41,000 because prior to i believe my testimony in the house was the week of may 16. And during my testimony, it was timely because we were in a time when applications received on or before may 6, i indicated in the house that the were roughly 61,000 of those, those, twothirds of which were roughly loan increased requests. And a third of those were reconsiderations. I said during that testimony that we would get to all of those files prior to may 16, and we would decision those files. So 38 of the twothirds, so if we are keeping track, 38 of 40,000 files were decisions and were approved and obligated funds and either sit in that 125,000 bucket or have already close the loan and been dispersed. With respect to the final third, the reconsiderations, i indicated at that time and it held true that reconsiderations our decision to successfully, meaning you ask for a reconsideration, the sba reconsiders it and send you know what, on hindsight you are correct. Two out of ten times the sba reverses a prior decision to its important to understand that 92 of the 41,000 did receive a loan and a prior decision in 2021 regarding their increase request, or in 2022 had been indicated what documents they were missing, which is onethird, or twothirds of that number. I realize i am throwing a lot of data here but the chairman asked to get into the numbers. Twothirds of that number has either not file taxes from 2019, so its important to understand if you could file an extension and that the extension. Of time told within the fall of 2020, so these are 2019 tax returns with no filing. There was a filing once in 2021 when the program resumed, a historic practice in sba programs. So to senator ernst, its about fraud and abuse, historically the sba has always allocated tax verification. The cares act required you sba to forgo that provision and economic aid act replaced that. So in addition to not filing or filing late, theres a third category of filers who upon learning that their increase request was not validated by the filing that they put forward for 2019 proffered an amended filing return that coincidentally coinciding with the request that they were seeking. So its really important to understand that yes, there was communication challenges with trying to indicate first, we are seeking all comers in the five months following the programs formal conclusion. 12312021 the last day in the program by law anyone could submit a new application. As chairman cardin mentioned, since 92 of the loans, or 3. 6 million from 2020 had from april of 2021 until may 6 of the 2022 to seek a loan increased. The reason i use the april timeframe instead of the september 2000000000 threshold is because the average increase was 200,000. So it is absolutely the case that these folks are frustrated. It should be mentioned that 75 of the 41,000 files are from codes congress indicated were not impaired by the pandemic. As you know in economic aid act, congress designate specific industry segments which was appropriate, hospitality, restaurants, et cetera. 75 of the remaining requests are from industries that were not designated as significantly impaired by the pandemic. I lent money for six years to Small Businesses for for a y bank based in wilmington, north carolina, and the only ceo of that company is lying to us, the only two questions a borrower cares about, they might approve, when do i get my money . So i understand from a borrowers perspective, no is a suboptimal outcome. But given the fraud, waste, abuse that this committee has highlighted for the last year and the reforms that the economic aid act began and the Bidenharris Administration extended to address fraud, waste, and abuse we cannot extend loans to folks who have not paid their taxes. I understand exactly [inaudible] verify or recognize on following the chiffon returns are not all the documentation isnt there. Its not always the Small Business owners fault. They may very well be entitled, they just havent been able to because of the pandemic to dot every eye and cross every key. So i am interested in how many files today are there still open where the Small Business owner has not been informed, if you reject they can file an appeal so they have that right but if you dont reject, they are in sort of an open status, they dont know what the future has. How many eidl applications are still pending where there hasnt been a finite answer given by the Small Business administration . So chairman cardin, every Single Person and a know this because we have worked with your staff, Committee Member staff on a daily basis, my colleagues here from legislative affairs work on a daily basis, we receive female accounts from your office and our office. And in those email accounts, and i read them daily, so believe it or not i read each one each day because its an easy way for me in Public Service to have an impact that day. I can either help somebody unblock something or i can get to a solution. In each of those email female correspondence, there is an indication by the borrower of multiple instances and several different times over the balance of however long they been seeking a look increase, of interaction and communication with sba employees, either at the District Office are directly with the Loan Officers themselves. So to say that they have not been notified of the challenges facing their files, i believe understates the totality of the circumstances. Where in the most recent cases, so since the program stopped considering reconsiderations in may, the emails that come in part either, as i said, in the obligated funded category in which we work than to assist them with how they can close that loan if they want to close that loan, or they are almost entirely in the category related to a tax issue. And so 41,000 is obviously a deafening amount of voices because if you took 50 states and divided it by that, that is roughly 800 calls, right . So your colleague senator van hollen on that stuff call you mention reference 1200 calls, which at the time if you did 50 by 1200 that is roughly 61,000 when we had the call. So its totally understandable that your offices are frustrated, that the borrower who in 2020, the federal government allowed them to seek a loan product without any verification of whether they had file taxes or could demonstrate a gross sales receipt number and the cost of goods sold number integral to the Economic Injury calculation. And they say to us collectively, but you gave me money, therefore, i am eligible. And in the sense that their business is small, as i mentioned in the overwhelming majority of these are ten or fewer employees so they are by anybodys definition small, totally true. But in the sense that we can make a reasonable reassurance of repayment from the cash flow of the business and verify that they filed their taxes, we cannot do that. So i understand what you are saying, and i think we are really two ships passing in the night. We are hearing from the borrowers that the requested additional information, they supplied that additional information, they didnt hear back from the sba, their application to still pending. They get notification theres no money available and now here that money is available. Then they get notification all files are unworkable, but they think the case is still pending. Thats where the frustration is occurring and we need to know the numbers. Ill come back on a second round. Senator ernst. Yes, thank you, mr. Chair. Quick, easy, i hope it is easy, question for you. Do taxpayers deserve an sba that is transparent and accountable to americans, and how it spends their money . Yes. Thats great. Thank you. I do agree with that as well. Your office has received recommendations from both the Inspector General and the gao on both ppp and covid eidl, many of which are pretty common sense, including continually assessing the covid eidl program and developing portfolio level Data Analytics help identify fraudulent loans and fraud risk factors. Yet these recommendations and others have remained open for more than a year while watchdogs have identified billions in fraud, and Law Enforcement prosecutes fraud case after fraud case. Ive heard from a lot of iowans who said that ppp and covid eidl loans were helpful for them in the early days of the pandemic, but when we listen to Inspector General where, hes right when he says that ppp and covid eidl have unprecedented levels of fraud. So it has been helpful but theres a lot of fraud ongoing in these programs. Weve all seen this story about the bmw with a license plate ppp loan. This is manhattan in new york, and we have seen so many of these cases. I dont think the program was her for folks to buy brandnew vehicles. But as a programs would driving down and theyre sticking to the fraud identification phase, i am concerned that it seems everybody cares about fraud mitigation and prosecution except maybe the folks in your office. We really need the sba to step up on this. So will you commit to implementing each of the recommendations the oig and gao have made to your office so that we can actually limit the waste, fraud, and abuse of our taxpayer funds . Yes, and we have. So inspector where also mentioning this testimony specifically is that under the Bidenharris Administration weve made great progress on the items you have identified. Specific to covid eidl program. There was what am going to do is list the choices made in the Previous Administration during 2020 that were not in place and of these changes were made in 2021 by the Bidenharris Administration. First, verifying business address. There is an easy, fast, speedy way to verify u. S. Postal address. They did not do that. Static address, i get another automated, at the continue to come back to is false distinction that you could not have speed without certainty. We restored speed and certainly. We made 6. 1 million ppp loans in the same amount of time, same amount of months that we did that with a fraud framework ahead of the authorization. In addition we have talked about the 4506k which again congress corrected any economic aid actively instituted. It was making any ig findings in 2020 in the rapid portal borrowers were allowed to switch their Bank Accounts. That is a red flag for any Financial Service company. It is not something that is necessary for speed and we restored preventing that from happening. You see that actually in the comments regarding the disbursements going over to treasure and some of the challenges with banks flagging suspicious activity. In addition, we restored the rule of two and manual refuse for all false, for all fraud flags related to individual loan files. This is particularly important because the ig referenced in the covid eidl program that was both filings where despite having fraud flags on those particular loan applications, they were waved through in 2020. With specific to the ppp program and the challenges that were highlighted in 2020 there, specifically the secretary of the treasure at the time required sba to process each and authorizations in real time for any bank or Financial Service company or Payments Company that is near impossible. There is three core Accounting Systems of planet earth banks use, jackassery, pfizer, im sure there are others but they cannot process in real time reconciliation. So by allowing authorization to be granted in real time, which they never had been before and will not again, led to 50,000 50 duplicate loans. In addition, there was a bulk processing choices made in phase two that were provided to banks to move through which the ig has correctly pointed out led to a host of issues with respect to duplicate loans as well as challenges with respect to the forgiveness the loan calculations. I can keep going but what i want to assure you, senator ernst, is under administrator guzman and in the Bidenharris Administration will work with the ig everyday. The reason that this committee does have data as chairman cardin is talked about on both programs, on all programs, is because unlike our predecessors the went to court to block the access for the American People for the date of the program weve made all of data available. So what is actually the case we will continue to prioritize rod waste and abuse. A something that we do not have to sacrifice speed. Some want to assure the borrowers out there, back to my point about how my approved and when i get my money, you can go fast in in a 21st century buu can go fast with sensible controls all through automated. The last thing i will see on this particular point with respect to ppp is that we put in beginning in january of 2021, for 6. 1 million ppp loans, a Fraud Control framework which enabled us to validate all manners of eligibility and compliance as well as know your customer principles of individual identity and business identity. So before you could get a ppp 32nd draw our first draw loan, whether or not the bank or the nonbank lender ran a fraud protocol, the agency ran that fraud protocol. And but for the holes that we placed on the loans that lenders need to work with us and borrowers needed to work with us holds to overcome where we did manual reviews depending on the issue, those things went through fast. And again there were 5. 1 5. N loans in 2020, no controls in six months. 6. 1 million loans in 2021 with controls. So the thing that ive been looking forward to talking to and appreciate this opportunity today is that speed and certainly can coexist. You can do emergency relief. The last thing ill say on behalf of the Civil Servants at the sba, which is really important for them, is that you would be hardpressed to find an igr gao report ahead of 2020 that has fraud, waste, and abuse featured prominently in it. There are improper payments for sure, meaning the lender made a mistake on the eligibility or some type of rule but you would be hardpressed to find that fraud, waste, and abuse. So 2020 there were choices made to prioritize speed at all costs, that in my opinion did not need to be made, and are the outlier of them that has caused the challenges that we all regret. And i say that completely admiring the Prior Administration, both caucuses, anybody whos been involved because ppp and covid eidl were unbelievable programs to help main street Small Businesses. But is actually the case that fraud, waste, and abuse is a huge priority. Thank you for indulging me. Yes. No, and appreciate that and i do hope once the fraud, waste, and abuse has been identified then we go the next step of either prosecution or recruitment recoupment. So again i will go back to my Opening Statements as well. We do know there was an error made with planned parenthood and the affiliation rules. But we havent seen any attempt to recoup those dollars. Its one thing we can identify it but then to actually go back and correct the problem, i think that is really important because whether its ppp or the eidl program, the loan program, obviously there are still those that have applied that would like to see those dollars in their businesses. So one way or another, and we can come back to that. Certainly i will have some followon questions, because i do know that jeffrey fraud Risk Management board which is good, so i will want to know a little bit more about that as well. But thank you very much, mr. Chairman. Thank you. Senator hirono. Thank you, mr. Chairman. Whenever there is a Natural Disaster, sba is among the first agencies to step forward and certainly hawaii has had its share of Natural Disasters. The want to thank you and administrator guzman at all the men and women who work at sba for being there as they have been. Its clear that the Prior Administration did not set up adequate protections against fraud, waste, and abuse. So you are doing, i guess that you are doing everything you can to ameliorate those deficiencie deficiencies. The ppp and i look were massive, massive programs and attack you have about 4 million loans that are coming to. Did you not request Additional Resources for sba so that you can process these loans that are coming to . Yes, i believe that 2023 budget makes a request for the servicing. What you are referencing is begin in october so less than 60 days from now we will begin to Service Payments it as a caminos and as you know, senator, there were 30 months of deferment. I please report that a third of covid on recipients have already made payments even during the deferment. So thats encouraging. But yes, we will begin servicing. That number as chairman cardin referenced in his opening remarks is a a massive number. So we will need resources. Mr. Chairman, i hope that were going to be supporting the administrations request for Additional Resources. Otherwise, you are going to have i would suggest the word chaos comes to mind, sba does its best with its resources to administer all these loans. You have heard a lot about people in her own states, weve all been getting phone calls, and the issue for me is that there are people who applied for these loans who were told that things are going well, they were following up on all the requested information, et cetera, and then finally to be told by the sba that the program ran out of funds. And then the next thing they heard was that no, the issue for this particular applicant im talking about, and applicant, a Health Corporation which is a Nonprofit Corporation that takes care of the health care needs, but the next time they hear is they were actually in the situation where they had made exaggerated projections of 2021 expenses and did not file their 990 tax return, i dont know know what that is. Though they are getting two different pieces of information, so how are what are they supposed to do . Because when youre exaggerating your costs, that sounds like fraud. So what are they supposed to do . Because originally there were not told that they were in a situation where they had to do with what sounds like fraud. So, so first off, yes. Not filing your taxes is fraud, yes. So it is a criminal offense. And for this particular program, the 2019 return is the return that we are leveraging. So those returns needed to be filed, we needed extensions by the fall of 2020. So, so yes. And the reason theres a disconnect, i believe, and i work on this every day, and i just want to say for the committee, its important just to say personally, you know, i come from a town, Manchester Connecticut with a Median Income is 61,000. Its under the national average. In my community, behind us was a dentist. Across from us was a date on and around the corner was a Franchise Owner for dairy queen, obviously our favorite. So i want people to get capital. And as the administrator can but the reason they cannot get capital and were able and believe that they are eligible in the first place is because they did get capital in 2020, even with those issues. So its important to understand that that original choice with respect to the tax filings has a ripple through the process. So assuming that is there any way for this Nonprofit Agency to remedy the situation . I think they can exaggerate projection for 2021, that is probably in dispute, the weather not they filed a 990 is an objective criteria. Is that something they can remedy so that assuming they still need these funds, that you have fines, that they can pursue funds . Yeah. So i think, so first off just obviously as a indicated this is a credit not available elsewhere program so we take extraordinary lengths together and i think it is appropriate for the Public Sector to, for example, originally loans without 570 credit score which in the private sector would be difficult to get. On this particular issue though the weather not you filed and the fact that the increase request that you were seeking is not supported by the Tax Information or the Financial Information that you provided, i believe that we need to draw the line there and ive recommend to the administrator thats what we do. So and and i guess the lasti would say is there is no comparable process in the private sector for appeal or reconsideration. And i will say every time that i said yes, when i was lending, and i lit a half a billion dollars to federal Government Contractors across the country, minority women, that own, every time i suggest i was a greatest banker in the history of the world. The next day when i said no, i was the worst maker in the history of the world. With regard to this reticular nonprofit, then the answer is no because they didnt file they either filed a 990 and a creek or the didnt. They didnt file, thats my conclusion. They just need to know one way or the other. So thats the situation. Thank you. I know, mr. Chairman, that with the millions of loans and everything that happened and then the ppp, the eidl program, the what people are came out of the woodwork to take advantage of this program and one last question is, who is prosecuting all the people who were engaged in fraud in these programs . As you know, senator ernst also referenced this, the Bidenharris Administration designated a team at doj to focus on fraud, waste, and abuse associate with a cares act program. As i understand both the house and senate are moving bills along to extend statutory limitations which obviously will support their efforts. Because as a license plate shows, folks do need to be held accountable for where it is appropriate. Do you have any idea how many people have already been indicted . So, i dont. And i do want to clarify something, and a Notice Committee knows may be reaching across the 80 out to the cspan public. Sba is not an enforcement agency. So unlike the sdc, unlike the Bank Regulatory bodies, we administer programs certification for government, i nobody knows this, but we so we rely on the office of the Inspector General primarily and, of course, they work with secret service, at treasury as well as doj, department of justice. So we can assist the ig, and one of the primary ways to do that is allowing Inspector General personnel on a daily basis to have access to any and all data related to anything across all these programs. And administrator guzman upon being sworn in actually preceding her when i took my position in march 1, we restored that and so the ig has daily access to anything and everything they want. And obviously as senator ernst referenced, the administrator has designated a Front Office Person to coordinate with those of the bodies on this. She meets every two weeks with Inspector General, and her directive to us has been and will continue to be to be completely open, completely cooperative. I want fraudsters put in jail because the 32 million Small Businesses are the people that employ twothirds of this nation, and they were my neighbors and my friends and my relatives growing up. Thank you. Thank you, mr. Chairman. I will point out that senator paul and i worked together, the legislation you refer to passed the senate this week, on his way to the president seeking his signature for the statute of limitations. Senator rosen. Thank you, chairman cardin and Ranking Member ernst today, and mr. Kelley thank you for being here today testifying and the work you were doing. We are here today because a little over two and half years ago congress had to respond to a pandemic with a promise, promised to our Small Business owners that we wouldnt let them lose everything as a result of the Global Health crisis completely outside of the control. Completely outside their control. We made this promise through programs like ppp, the Restaurant Revitalization Fund and, of course, i dont. Idol has provided leaked over 40,000 nevada Small Businesses, thank you, we are grateful for that. It was particularly import for the spoils of businesses because it allowed them to get support directly from the sba without going through a bank. And this programs ability to struggling Small Business programs why i produce the Small Business act, aim to limit the bombing caps on title loans to fulfill our promise on eidl advance grants and replenish, replenish the funding for this program which i know the chairman supports. I am proud that my efforts resulted in raising eidl loan cap up to 2 million. Through all this, Small Business owners of course faced numerous challenges, over 90 of businesses in the bad our Small Businesses and so working with sba and eidl programs and less two administrations is really important. And after the Current Administration has corrected many errors of the Previous Administration, i applaud you for that. Sba seemingly reneging on its promise by ignoring many qualified applicants who began the eidl application process prior, prior to the deadline. I think we have to restore trust. So you aim to serve Small Businesses. This is your mission. You come from a small town. You know all the Business Owners a bear, which once, i screen your favorite, that i think it is fair for everyone in the heat of summer for sure. But how do we restore trust, trust between sba and Small Business owners who feel they have been unfairly boxed out of this process . And i think that has to do with the communication. Can you speak to the communication that you need to have between sba and the Small Business owners who applied before may 6 . Yes, i can. First, they tell me it is your birthday. It is. Happy birthday. Thank you. I will communicate that first. Thank you. Ice cream maybe. [laughing] i tell you, yes. I mean, jerry get at dairy queen pretty good. Pretty good. What ill say about communication, so there is no question cherry dip the wood peaks and valleys in terms of our pluses and minuses with the way the programs were community. Weve talked about structural expectation setting earlier in the hearing, and you reference in this, which is to say you tell someone in 2020 you can show up for something, you dont need documentation to validate that you file taxes, we give you 150,000 bucks. We do 3. 6 million in four months, so the expectation is that, okay, this must be something that i am able to access because i went to the federal government and they gave it to me. Then in 202121 when i come back and im asked to proffer evidence now of tax revocation, it goes to the Economic Injury, by definition with no change the expectation. So at the basis of communication in anything, right, is what expectations do you set, and if you changes speeded to the applications receive an female, any type of communication about this . Yes. One of the silver linings, i will call this one of the pluses, has been the opening of female correspondence with the borrowers. In the private sector, if an female Marketing Campaign that i was involved with got high single digits, we were very excited. Then there is, do you have usable reassurance of paying it . Its there that differentiates it from will be did not have a credit decision. We had a formula lenders executed but did not make a credit score which is one reason you will recall lenders were concerned in phase one about lending business borrowers. I think one of the things we improved was too late in terms of communication certainly for a program over, open well over a year 2029 made rapid portal to the District Office to have direct office and transparency to seek whatever the loan officer or any other processing employee dollars, that was critical because it helps students but i cases work your offices and how you fact that the person from call center District Office and back frustrating and regrettable. In september we switched call center vendors the vendor selected, the contract staff augmentation and callcenter system selected 2020 had no Service Level agreements or kpi so what it translates to is what was the call Response Time . How quickly did you pick up the phone . We dont know. How quickly did you disposition in a favorable outcome . We dont know so again, choices made at the outset proved to be devastating across time. In addition to the portal itself had a twostep process from Technology View was inept, frankly. It required you to come in and fill out the Application Form in an intake and wait for a response. In an emergency situation as you have told me and i agree with, silence is deafening so if im waiting to be invited back to the portal and i dont know, i logically start a new system. The system detected you are applying for two instances of the same time so then of course your own the callcenter line so choices were made in 2020 from design view that created systemic issues that rippled forward and it leads to this day because constituency interactions we receive are still trying to make heads or tails out of these signals we sent them and that is horrible. From an administrative view, it never again so axis is now charged with reforming in the Natural Disaster program. Thank you and look forward to seeing streamline communication and process. Senator hickenlooper. I was so glad to yield to her on her birthday, make sure she didnt have to wait. We all wish you a happy birthday, we all try to do our best. Mr. Kelly, i have respect for and i think your putting yourself well today but whenever agitation i bring to my question is not a reflection on you, i view you as the solution, not the problem but its hard to look at a system like this where communication and the system has been so dysfunctional and not feel tremendous aggravation. Senator rich and i produced a bill to require the program to meet exact timelines, im sure youve seen it to make sure communicating in an effective manner. In march started work on gaos july 2021 recommendation to develop programs of strategy to communicate with Disaster Loan Program participants. Obviously as lives in this country is insufficient so these wildfires and floods are going to continue. His the copperheads of communication strategy include the timelines we had in our bill . I apologize, i am not able to recall exactly the timelines but i will endeavor to state timelines and tell me to speed up as senator cantwell did last spring. With respect to what we are doing in disaster loan, 83 of disaster loans are under 50000. Consumer and idle loans for business and Property Damage on the consumer side. Those are unsecured loans and we ought to be the 21st century able to approve decision and dispersed within 72 hours or less and im sure right now theres somebody online saying i can do it 24 hours but 72 hours sending disbursement list, we can get to that. There is historically in Natural Disaster, challenges between the way fema sba systems are not integrated as it could be so we are working with fema on a roadmap application interface to allow for systems to integrate with one another. We often talk about single entry federal have to go to multiple places but in the architecture you can have no wrong entry so i will look to the Restaurant Revitalization Program and indicator tends to reform timeliness. That program we had apis publish private sector tools, we enlisted other points of sale vendors were source of truth data that went to the injury calculation we were able to process 60 of the applications and at the discretion of the applicant and able to process those in less than 20 minutes if you think back in terms of totality of administrator whose lungs vision and execution in comparison to the shortcomings we are discussing today and legacy issues, it is remarkable and promising because we did not have the tax issues that we see. Thats exactly correct and one reason i admire in her work. Let me ask you a little connected to that, this is pie in the sky huger, away could work with syntax, they claim they have so much information about their customers that they can give a more accurate loan and tell whose credible. They give many loans turned down by the sba. Is there some way to partner with them to use that capacity and increase accuracy and get better performance . Yes. That is underway for example, under the hood in the back and restaurant revitalization integrated syntax provider that is what it is Election Commission of the borrower breakthrough i validate we did review to validate going i will do what was Mountain Range will with certainty will workflow deleveraging mr. Design experience in technology will grow out of that experience will i need to look are examples but fraud is usually able to integrate treasury do not pay, as an important criterion only access the Database Research center so theres enormous opportunity in Natural Disaster we are focused on right now are for program. Rate. Perfect. Thank you, i go back. Senator shaheen. Thank you for being here and for all of the work sba does. Its my understanding no funding remains to continue to improve modifications more previously denied applications but drafting bipartisan infrastructure bill, congress clearly intended sba use transfer authority granted by that law to reallocate funds through targeted Grant Program to the idle loan program to businesses eligible with the able to receive it. In the past, they used that authority, why was the decision made not to use that authority again . As we have indicated, we did use that authority to process applications received on or before the may 6 cutoff deadline so weve used both cancellations as well as funds we moved in coordination into that fund so theres no question communication from center level an individual basis about funding being exhausted was confusing. However when we speak to the inventory we talk about today, 41000, there arent any instances that would be approved and obligated funds. Those have been looked at, theres been communication about what was missing and insufficient and two thirds of the case its a tax related issue so at this time we would not move funds because we dont see inventory demand. Again, the reason that is the case is 92 of that population has had alone since 2020 and as of april 2021 with the average increase being 200,000, they could seek loan increase and many did but only 20 of those eligible ever responded over the course of 15, 16 months roughly so i understand again, i want to keep reiterating this, i understand why they are frustrated with the outcome but in terms of the sbas responsiveness for an increase, weve given multiple and in some cases reconsideration or appeals and we are not going to be able to get to yes on the individual while. I appreciate the effort. I beg to differ on a list of applications weve worked with our District Office on and while there are some i dont want to use the word questions but there are disparities but they are in at least one case as simple as an email address that was different so you havent convinced me and while i recognize there are some cases for various reasons, human error dont get reviewed in the same way we would all like, its im still concerned we have businesses out there that qualify that are not being acknowledged so i dont know how to resolve some of those cases but i do think it is a concern and an ongoing concern and as senator rosen talked about trust, i think thats a real issue many of our Small Businesses still have. I want to ask you about an issue not directly related but one that concerns me a great deal because i think the District Offices sba has around the country are really important. Ive lived through recession in hampshire where the only thing that kept our Small Businesses afloat was the sba and the work of the District Offices particularly during the pandemic they were really important. I am concerned because im hearing there are some who would prefer to be a smaller footprint would like to see more power consolidated in washington and the data weve shown shows a drop for some District Offices including hampshire even asked some of the other programs that help Small Businesses phase out to have further reduction and ability of our District Offices to help Small Businesses, its the goal we all share and ask if you support the work being done by District Offices and will you commit to efforts to increase operating budgets as long as Congress Appropriates dollars and expenses over all . First, yes. I enjoy working with the District Offices, five years during the Obama Administration right traveled quite a bit more those District Offices. I understand their value and one of the things weve done and Restaurant Revitalization Program was reintegrated 100 District Office employees directly into the positioning process as a response to some of the shortcomings identified. As i mentioned, one of the things weve worked with was getting access to the data regarding those files so they could assist borrowers directly so theres a place for District Office both to help us succeed on the mission as to the second part of your statement, i think its yes and what youre saying, a budget is prioritizing choices and you are suggesting sba would have funding to do its full suite of things and quite obviously then the District Office should be funded as it needs to be. Those decisions are above my pay grade but i think everyone and certainly administrative response to your question and hearing this spring indicated support. She did and i have had a chance to raise that with her yet we dont see the change in terms of the information weve been getting with respect to how the money is being distorted and those District Offices are still being told they have to reduce the operating budget significantly and i think its a concern. My understanding on this, these guys are about to jump up, i dont understand, and others appropriations but theres a committee and whats related to the agencys these things are going to be sorted out as the process moves forward so its not a very informed answer but what i took that to mean in relation to prioritization is an understanding theres a lot of opportunity, a lot of need given the balance of what we have. Thank you. Im going to be watching this very carefully and i dont appreciate having a budget submitted is being done with the idea that we are going to cut this area because we know congress is going to put that balcony so we can fund something else. I would hope in the budget process it would only be as honest as we can what the priorities are and what we should be in london so i appreciate your interest in. Im going to follow up on senator sheehan points, i want to acknowledge we spent a lot of time together developing these programs with senator rubio and collins. We did want to get money out quickly and we recognize the verification systems, we have to go through the systems, businesses would be shuttered and closed for good so we knew there would be some challenges doing this when we created the program. Im also going to follow up on individuals that followed the rules and the havoc on the clarity youve given us today but first, let me just say, i agree we want to get money out quickly, we dont want to see waste, fraud or abuse but we want to get money out quickly. Look at the size of the ppp program and idle programs and restaurant programs, the amount of fraud is very small so lets be clear, we want to see it at 0 but percentages are very small and under waste, fraud and abuse, a lot of this is not fraud and we should recognize all businesses do not have the same degree of capacity Large Companies have and at times, mistakes are made, they are not intended and we have to correct that but lets not call it fraud when its not so i want to clarify. Also comment this administration probably more transparency. We have gotten more affirmation. I know senator ernest might be a little upset, it wasnt a high bar to me under the Trump Administration because they didnt make anything available to us we appreciate the fact that its a much more open process under this administration and planned parenthood, i didnt know we had to talk about that again, affiliation rules apply not to just planned parenthood but other nonprofits, we clearly want nonprofits available, we make them eligible and the affiliation rule is the same for planned parenthood as it is for boys and girls clubs and etc. Theres never a determination made that money returned so lets be clear on that and i know we will hear about it again but i wanted to clarify that for the record. Let me get to the main thrust of todays hearing. It is clear sba did send out communications saying applications were denied because of lack of resources but as you have clarified today, thats not the case, correct . Yes. All of those instances, both of those messages i believe were communicated to the borrower. 125,000 eligible Small Businesses informed they are entitled to receive additional loan money and your testimony today is up to those applicants to get the documentation to complete the settlement of the loans. Its up to any borrower to close alone so they have to sign the documents so they are not providing additional documentation for any approval. If you bought a house or the big closing table, thats what theyve got to execute. They just have not done that yet. I just want to emphasize what senator shaheen has said, we will give you chapter and verse, i think weve already given you, we have several that have come to my attention were that is not the case. The burden is on the sba to complete closing, not on the person. They have done that and they are still winning for their checks. Theres yet another issue you just opened up, i agree the borrower agreed to take the note so they have to sign to be the borrower. We are responsible for closing the loan in association for that. So for the 125,000, including the District Office, we are executing, its discretion of the borrower and yes, we have seen from your office and others there was confusion for those folks who have funding and i want to reiterate again their money is there, they can execute the closing and we will assist them with that closing. Once they have executed the document, the money goes on schedule over to treasury for the ach into the designated bank account. There are issues with the Bank Accounts where the account is located, they are bouncing back disbursement, and i dont know the exact reasons from each institution. One of the reasons cited most often is the opinion of the bank that commercial activity for this account is not recognized and therefore they flagged as suspicious. I understand what youre saying and i recognize that and thats one of the points our college has mentioned, there are better systems that would have dealt with this and we are dealing with two agencies, treasury and sba and that is a challenge also. My please to you is, provide the leadership and resources to get these resolved. These are people frustrated, they need their money. In one case it was inc. Account only accepted checks up to a certain amount and they had a higher check coming in they set up a separate account and it took them forever and they still havent completed getting the routing into the system the money can get there. These are Small Businesses, they need help. Please resolve these issues and get the resources and get it done and theyve been given inconsistent information over time. At one time they got the money wasnt there and many of them were giving up so please provide the services they need to get that 125,000. Those who want to take out the loan, they complete the loan process and stop calling our offices, it would be very helpful so appreciate it if you would yes, one 100 , i hear you, one 100 we will redouble efforts and for all of the bank account, just like the closing, we will work those two completion. We will work with that borrower to get that money and the money remains there even if it bounced back. The 41000 potential. We are informed or directly or communications generally these loans are unworkable. Not that they were denied but unworkable as i understand. I understand a lot of these, they could not get verification is required and hadnt filed tax returns, all of those issues that has to be done to get there loans completed. I recognize that but unworkable is not denied. In some of these, many of these according to the case work we have, they think they have given adequate information or can supply adequate information to they havent got the ability to do that because of the way the system is set up so i urge you, to those who do have claims that can be adjudicated in a positive way, increased loan amount, lets get those results and the numbers are getting small enough it seems we should be able to handle those with the service we would expect. Urge us to try to resolve that. For those of us truly not eligible, you have to bite the bullet and get determination so we can move on or file an appeal so it would seem to me would have to complete these. I dont want you to deny application because you want to get it off the books, i am happy to keep it open if theres a possibility for successful conclusion for Small Business owner but there has to be a time. Understood. I understand the urgency, the objective and mission. One thing i want to make members aware of, from first disbursement, a borrower has 24 months to seek a loan increased. As of july, 80 of that universe, august 2 today so 80 can no longer a loan increase. By october, that will be 90 by the end of the year, zero. What is important to understand his again, the program did formally close and as you know december 31, to taking new applications and the combination of those things makes such from our perspective we are moving on to servicing for which that begins in october. 27000 folks required to make the first payment and it spikes up half a million multiple months thereafter. That is a huge list. We will have to onboard staffing weve scaled back when concluded to come back on board despite the fact this committee and Appropriations Committee made billions of dollars available for idle admin, covid idol rapid portal is not handle servicing so we have to stand up servicing solution at scale which is technology lift as well as people process lift so we are facing that in the next 60 days so i understand the frustration folks feel out there as part of that 41000 but from the perspective of what i can assure you is we did work with these borrowers to find a yes. It should be mentioned that with your leadership in 2021, we did 200 billing dollars of support and we did 400,000 loans checking ip business address, validating Tax Information so we demonstrated you can do 20 of the total address for marketplace of all lending in 2021 with 7000 employees. We did that together and there are definitely things we can do differently and have learned from. Twentyfour months is not statutory, you can waive that 24 months. I understand that. Thank you, chairman and i appreciate the discussion today. I want to make it clear, i dont care what administration it is, we should always be transparent. [laughter] i think that is just best policy across the board and with that transparency, im going to go back to the fraud Risk Management board. I am excited, i know sba announced in april they were creating this Risk Management board but when it comes to transparency, sba has not shared details with congress or the public about its impact since it was created. Can you visit with us and give an overview of what type of programs the board is looking at, have there been results from that . Share information with us on how the board is going. The primary responsibility today is to handle what amounts to north of 60 total audit reports in addition to annual audit our auditor work by the ag so within that is demonstrating to the auditors and first and foremost to ourselves that weve addressed the shortcomings we are highlighting so not making a court account system reconciled in real time, its not done on planet earth. We can avoid 50000 duplicates. There are issues with improper payments inflated to fraud which is you have addressed Small Businesses are not necessarily committee fraud. For example in the covid idol, the 80 billion often referenced is due to sole proprietors in 2020 were required to demonstrate 1000 they were seeking to 10000 target idle events originally made available. They need to demonstrate in order to have employees as a sole proprietor, you have to have a registered ei and so there are great sole proprietors i have no doubt believing. Have employees, certified correctly they deserve 5000 or 6000 or whatever but they did not have registered the date is february 15, 2020 when the pandemic was officially start date so the fraud review board is focused on addressing the most immediate issues. From how we do that we have to recognize and administrator guzman has shared with you and others, we have to recognize we have to be timely, fast, relevant so that means making Technology Choices that contemplate both certainty so putting tools in front and to disburse the money and know your customer and those types of things so across the board, it has begun and is a daily event. Theres not a day since i became associated administrator that i have not spent a third focused on fraud, waste and abuse top of mind. Thats good. With all the lessons weve taken away that came out of covid19 and some identified by the chairman and others through lines of questioning today, i am so hopeful that we never experience another covid19 type of event in our history but it could happen so taking lessons learned, are we able to act on those in the future . Have the suggestions, solutions been identified and how can we put them into practice as we move forward . I share the sentiment, i am good for pandemics, i hope we dont have another one. I want to take a second to commend the office of capitol access Civil Service because they took the resources the advent dollars this committee and appropriators made available and that technology specifically for fraud, waste and abuse, weve talked about medication, we were able to build off the initial portal launched in august 10 of 2022 support ppp forgiveness. From the private sector watching that launch august 10, 2020, i was struck as many were in the private sector, this works, this is good. Steve and his team and office of capitol access deserve credit because it was that investment with ppp dollars that led to a better experience for applicants in the restaurant, but the agency in a position to facilitate 1500 small banks forgiveness and processing 2 million loans and its that foundation into the Natural Disaster platform to address broader issues that ig highlighted and call center issues and the challenges we see in the case files. I do hope we continue to build upon that and in closing, i want to say a welldeserved thank you to the folks at sba who really had a huge pressing job ahead of them when covid19 hit and they performed admirably. I know a number of our own local banks and Credit Unions help push the dollars out to Small Businesses and they really did need that assistance so thank you for coming in front of the committee today. One more clarification i need on the record so i understand, may 6 was the cutoff date for modification, it could have gone to july if i understand correctly and could have waived that date later than that. You put on your website may 6 was the day quote due to lack of available funding. We want to argue when the judge made, you reject how much money would be available, you made that judgment but the website today still says as of may 6, 2022, is no longer processing covid19 idle loan increase request or request for reconsideration previously applied loan applications. Due to lack of available funding. I would suggest you may want to modify that, taken off, youre not accepting them, fine. We recognize youve used that, we may disagree and can have that debate but clearly funding is available and its misleading have that on your website. Second, you indicated during your questioning here most of the 41000 will not be able to get the yes and theres a concern the funding could be repurposed. We want to make sure funding is not a reason for determination pending as of may 6. I apologize if i impressed that, i either spoke or was not aware. I am keenly aware that an appropriations decision, my position and i want to make this clear, these files were looked at and i have seen them personally, ive been involved in the daytoday respondents and we have been responsive so i apologize for the confusion. No one will be denied who had their application prior to may 6 because of lack of funding . Correct. The denials, decisions beginning with initial denial for most of these beginning in 2021 and at the heart of the denials is a disagreement between that particular person about whether or not filing taxes is appropriate or not and i understand the frustration here and why that person because again, they got the loan originally with no tax, they didnt file and got a loan in 2020 i understand why when they speak to people including me, i received emails where when i read the initial email, they acknowledge the back and forth with their particular loan officer and acknowledge some shortcomings at first. Then they say a wrong has been done to them. I came to serve to say yes so that appeals to me as im sure it does you, we are here to serve so we take action and work with Civil Servants in the process centers to determine whether or not we can make an action. I want to make it clear any pending applications if they are meritorious, they will be funded, the money is there, the funds are there. Will say for another debate at another time whether you use that date because of lack of funding, i dont agree with that. I think you could have begun gone beyond may 6 and you have discretion even beyond july of this year if you wanted to under the 24 months. We will leave that for another time but it is clear congress intended to have adequate funds to deal with the public pandemic and we were prepared to make funds available. It seems like the funds we made available for specific purposes have been taken for other purposes, not necessarily the idle program but other programs and could have repurposed money to take care of the needs out there. I want to make sure we take care of the 125,000, it seems to me we could have had a longer offramp on the applications. Anything further . We very much appreciate your time and exclamations and service to our country. You have a very challenging job so thank you very much and thank you for appearing before the committee. You may open up in two weeks . Our normal process for from the questions for the record, appreciate if you can answer the questions as quickly as possible. With that, the committee will stand unturned. Adjourned. [background noises] [background noises] [background noises]