Authorized to declare a recess at any time. I want to thank everyone, especially our witnesses, for joining us today for our committees hearing. I want to make sure to note some important requirements. By saying standing house and Committee Rules and practice will commit continue to apply through hybrid proceedings. Regulations require members to be visible through a video connection throughout the proceedings. Please keep your cameras on. Member to remain muted until you are recognized to minimize background noise. In accordance with the rules established under hr 965, stafford been advised to meet participants only in the event there is inadvertent background noise. For those members here in the room, i urge members and staff to wear masks while in the hearing room. I thank you in advance for your commitment to a safe environment for all here today. Mnuchin, administrator carranza, thank you for being here today. I want to give a sincere thank you of both agencies who have worked tirelessly over the last few months responding to the crisis. I am deeply appreciative of all the work which helps support millions of american jobs in a moment of unprecedented uncertainty. These are extraordinary circumstances and i would like to paint a picture for you of the magnitude of the devastation that Small Businesses are going through right now. Back in march, it became clear that covid19 would tear through our communities, leaving almost no sectors of our economy unscathed. Was deeper than their larger counterparts. I have been on phone calls with Small Business owners in my mainstaysho have been in the community for decades. Who have lived through 9 11 and the Great Recession, and are now Holding Back Tears telling me if we do not do more to fix ppp and find longterm solutions that they cannot imagine their business, their source of income for their selves themselves and employees to survive the pandemic. 0 small, of our 110,00 businesses that have closed their doors permanently. An estimated 7. 5 million additional firms are at risk for the same fate. On top of all of that, they turn on the news and see headlines familiesmp friends and cleared for millions in Small Business bailout, let me tell you. That is a gut punch to the Small Businesses this program is intended to serve. The ones that did not have the topnotch Financial Connections to quickly get a ppp loan. While we are grateful to sba for providing data that i have been calling for since the start of ppp, it is no secret there have been errors that are cause for concern. I am troubled by the Bloomberg News report that at least 226,000 loans were likely misreported by congressional districts, making it even harder for us to understand how businesses in our districts fair in the program. Meanwhile, a report from the new York City Comptroller suggested that ppp loans were made in greater frequency in states that were less hit by covid19 than in epicenters like new york city. Pandemic hasw, the been especially unforgiving for our communities of color. Minorities have borne the brunt of this Health Consequences of this terrible virus. Businesses,t their also businesses also disproportionally bear the consequences. A mere 12 of black and latino Business Owners who applied for ppp loans reported receiving what they asked for. Nearly half anticipate being forced to close permanently in the future. We dont even know how asian and native american Business Owners fared because Demographic Data was not asked to be voluntarily provided. That is why collecting, graphic Demographic Data on the loans is imperative. Moree we will commit to do for these businesses in what is sure to be tough month ahead. Im sure you both can understand many in our country are frightened. They are angry and they are hurting. We are here today to bring transparency to make sure american knows they have a government that works as well for them as it does for the wellconnected corporations and friends of this administration. As locked out orders started in march, storefronts were of layoffsnd waves are taking place. Congress provided relief to reeling Business Owners and their employees. Thet, congress established Paycheck Protection Program, or ppp, to provide forgivable loans to businesses and nonprofits for mainly covering payroll. Businesseshelp small that needed financing beyond ppp. Sbas programced to get more Flexible Working capital to more business faster knowing that Small Businesses operate on razor thin margins, congress created the program to get cash into the hands of Small Businesses quickly to bridge the gap onto their until their bones are dispersed. Until there loans are dispersed. This has been a lifeline for many entrepreneurs and job creators, injecting governance 670 billion into the economy injecting over 670 billion into the economy. We held numerous hearings with Small Businesses, lenders, and leading policy experts over the past few months. One of the top issues we heard from ppp stakeholders is the incomplete and everchanging guidance. Borrowers testified they had very little guidance regarding how to spend their loans so they could qualify for forgiveness. Theers are still reporting process for seeking forgiveness is not clear and unworkable. If forgiveness is the centerpiece of this program, a streamlined efficient progress forgetting those loans forgiven should be a priority. Turning briefly to idle, the lack of Clear Committee case and has been an ongoing issue. Given the urgency of this pandemic and the uncertainty for so many Small Businesses, sba must do a better job communicating. The spread has accelerated in recent weeks. Lockdown orders returned. It will be extremely important we take Lessons Learned since march to stop unnecessary bankruptcies and make sure these programs are working for americas small firms. We need to explore other ways sba can support our Small Business sector, like turning to triedandtrue programming enhancements that work after the Great Recession worked after the Great Recession. Once again, thank you for being here today. I now yield to the Ranking Member for his Opening Statement. Thank you, madam chair. Thank you administrator carranza and secretary mnuchin for being with us today and taking time out of your very busy schedules. Thank you so much for being here both. While the all agree we must be forwardlooking as we continue to respond to the covid19 pandemic, the topic of todays discussion is equally important. We must continue to Work Together to ensure the federal governments relief efforts face prudent oversight. These programs were developed to assist the nations smallest firms. Instances where an eligible businesses and entities, including clinical organizations who benefited from the programs must be examined closely. Take for example the over received by the Ohio Democratic party in may. Madam chair, i would oppose such a bailout for the Republican Party as well. It happened to be the Democratic Party in ohio that took advantage of this. I dont figure was ever intended for that type of thing to happen. Oversight of how well the billions of dollars allocated to assist Small Businesses was utilized is imperative. That will help us formulate a future strategy and make wellinformed decisions that benefit the greatest number of americans. Represent most of the city of cincinnati. For the past few months, i visited countless Small Businesses and obviously many of their employees as well. I and my staff have spoken with representatives from the cincinnati africanamerican chamber of commerce and the urban league. Some of our smallest businesses, particularly those in minority and economically disadvantaged communities often times the smallest businesses and typically under 10 employees, they when this started and they still dont have the strongest relationship with banks or Credit Unions when they were seeking these loans. I think it is something i know this has evolved in the chair has been instrumental in that effort as well. We worked with her and her staff on that. Those folksake sure in these economically disadvantaged areas have access to this. Often times the relationship they had with the Banking Institutions, Financial Institutions just is not there. That makes it tougher for them. It is impossible to legislate from washington for every single situation across the country. Likewise, it is impossible to regulate from washington for every scenario that may come up. All the folks in this room recognize this and have been reminded since march of the structural impossibility. Congress acted quickly earlier this spring. Speed was paramount in getting funds into the hands of Small Business owners to keep them afloat when they were forced to shut down through no fault of their own. Consolidating six months of legislative work in a little more than six days, the coronavirus aid relief and Economic Security act was passed with overwhelming, bipartisan support, republicans and democrats working together. It was signed into law by President Trump on march 27. This more than 2 trillion Economic Relief package delivered on our commitment to do Everything Possible to protect the American People from the Public Health and Economic Impacts of covid19. The cares act created the Paycheck Protection Program, following passage of this theslation the sba and department of the treasury worked tirelessly to execute the law and issue regulations to inform borrowers and lenders alike how the program would be administered. To the credit of everyone involved, the first loans flowed from private lenders seven days, just one week later on april 3. Since that date, the program has distributed nearly 5 million loans to small firms in the amount of over half 1 trillion. Dollars. Trillion it preserved nearly half a million jobs. He successes cannot be ignored. Ohio is not alone. This program invited Small Businesses and workers a lifeline across the entire nation. Were there bumps in the road . Of course. It is difficult to get a program this size up and running in a week. Heather been communication issues between the federal government and the lenders and the borrowers come o borrowers, undoubtedly. We must prepare for the future. Unfortunately there are still challenges resenting obstacles for the nations smallest firms. We continue to face this threat. We must before thinking. More needs to be done and we have proven what we Work Together across the aisle, across the capital, and the different ends of pennsylvania avenue, we can move mountains. I look forward to engaging with as we continue to work for american Small Businesses. I want to thank you both for being here and thank the chair for holding this hearing today. I yield back. Thank you. I would like to explain how this hearing will proceed. Witnesses will have five minutes to provide a statement and each member will have five minutes for questions. Please ensure your microphone is on when you begin speaking in that you return to mute when finished. I would like to introduce our witnesses. Our first is the administrator of sba. Administrator carranza has an inspiring background. Born in illinois to an immigrant family from mexico, she began her career at ups as a parttime employee, ultimately climbing the ranks to become president of latin america and caribbean operations. In 2006, president bush named her deputy administrator for the Small Business administration. Most recently was the treasurer of the United States. Welcome back to our committee, administrator carranza. Witness is the honorable steve mnuchin. The secretary of the u. S. Department of the treasury. Mr. Mnuchin has a successful career as a banker at Goldman Sachs for multiple decades before leaving to join other hedge funds throughout the 2000. He was appointed treasury secretary by President Trump or he has served for the last three years. Welcome to the house Small Business committee and thank you for joining us today, mr. Mnuchin. Administrator carranza, you are recognized refinements. Admin. Carranza thank you, chairwoman. Thank you. Mic is not on. Maybe bring it closer the. Closer to you. Admin. Carranza never said the committee, thank you for the invitation to testify this morning. I am eager to update you on the progress made by the agency in helping Small Business weather the pandemic. , since march the sba processed more loan volume than it has and the entire history the agency. Has approved nearly 5 million loans in muchneeded Fiscal Relief to Small Businesses. We administered this first of its kind program with an eye towards equity, recognizing the pandemic has been harmful to socially and economically disadvantaged businesses. We mobilized thousands of new lenders, including Community Banks, Credit Unions, farm credit lenders and hundreds of mdis that specialize in providing liquidity to underrepresented communities. The Economic Disaster loans and advances, the agency reached over 8 million Small Businesses, dispersing yearly 170 billion in assistance. That is more than all other disasters combined in the agency. Loans are being processed in just five days, with disbursements occurring in just two days. These programs help the Small Business sector survive onceinalifetime disruptions. Since early june i made a concerted effort to personally speak to businesses left to relink by this pandemic and a Financial Institutions so i can see for myself what is working and where improvements need to be made. One of the scores of businesses i visited was an African AmericanLogistics Management firm in dallas. Sba loans provided him with a bridge, a financial bridge over the most multi was waters he has ever experienced. It helped him not only keep his employees on the payroll, but who hire new workers received training and professional certifications. Many Small Business owners use that term bridge to describe how sba loans provided them with time and space needed to rethink, innovate, and adapt their Business Models for success in this new environment. One africanamerican manufacture in greensboro, North Carolina told me nsp alone helped her develop brandnew lines of revenue online. Sba loans helped they whiskey distiller in traverse city, michigan transition his operation to Hand Sanitizer to meet both a social need and financial gap. This pandemic has bent an impetus for innovation in the Small Business sector. Also haswoman, it accelerated modernization at the sba. For example, we created an internal oversight plan for each cares act program. We have looked longterm at our management responsibilities for millions of businesses and disaster loans. The agency has brought on thousands of staff to support our covid disaster operations while simultaneously servicing 175 Natural Disaster declarations. Correctedgnificantly the Customer Service experience for idle applicants by accelerating the processing of loan que. Professionals have been working hard to achieve this on teleworking status. , we are more nimble more responsive, and better prepared for tomorrow. Before i conclude i want to say a few words about the ppp data disclosure made earlier this month. That data reflects information about loans approved by lenders and entered into the sba loan system by those lenders. Determined mean sba a borrower has complied with Program Rules or is eligible to receive a loan and forgiveness. We are reviewing all loans. Moreover, we provided the opportunity for business or lenders who believe their reported information is inaccurate to contact us. We will work with them to fix it. At the same time, we should not lose sight of the fact this <