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Publication

Underserved and Unprotected: How the Trump Administration Neglected the Neediest Small Businesses in the PPP

House Committee on Oversight and Reform
Select Subcommittee on the Coronavirus Crisis
Abstract
The Select Subcommittee on the Coronavirus Crisis of the House Committee on Oversight and Reform presents preliminary findings from an ongoing investigation into the implementation of the Paycheck Protection Program (PPP) by the Small Business Administration (SBA) and the Department of the Treasury. The investigation highlights that, contrary to Congress's intent, the Trump Administration and major banks did not prioritize small businesses in underserved markets, leading to longer wait times and obstacles for genuinely needy small businesses, particularly those owned by minorities and women. The report outlines three critical failures: Treasury encouraged banks to favor existing customers, guidance prioritizing underserved markets was lacking, and larger PPP loans for wealthier clients were processed faster than smaller loans for struggling businesses. The consequences of these failures include a significant drop in Black business ownership during the COVID-19 pandemic. Recommendations for SBA and Treasury include issuing clear guidance, investing in community financial institutions, and incorporating a demographic questionnaire in the PPP application form. The report stresses the need for a broader, comprehensive response to the coronavirus crisis.
Date
2020-10-16
Document Type
House Staff Report
Serial Number
Document Length
19 pages
Congress
116
Relation
DOI
Keywords
Staff Reports
PAP Major Code
15: Banking, Finance, and Domestic Commerce
PAP Minor Code
1521: Small Business Issues
Related Hearings
Press Releases and Contextual Information