WASHINGTON, D.C. – Today, the House Committee on Small Business held a full hybrid hearing on an SBA Management Review: Office of Capital Access.

Ranking Member Blaine Luetkemeyer’s opening statement as prepared for delivery:

Thank you, Madam Chair, and thank you for holding today’s hearing with Mr. Kelley.

Prior to COVID-19, the nation’s small businesses, and our economy in general, were operating at full-speed. 

The low tax environment enabled by the 2017 Tax Cuts and Jobs Act and the smart regulatory environment were allowing small businesses to grow, compete, and create jobs across America. 

Unfortunately, the capacity restrictions and shutdown measures of COVID-19 forced small businesses to think and operate differently. 

With limited foot-traffic and minimal dollars coming through their doors, small businesses were left without any options. 

They turned to the federal government and the country’s COVID relief measures and in particular, the Paycheck Protection Program. 

Overnight, millions of small businesses became aware of the resources and tools available to them at the Small Business Administration.

Additionally, thousands of lenders raced to assist them. 

As I sit and talk with small businesses, I often hear that the PPP saved their businesses. 

While the nation continues to recover, our work is not over. 

Agencies and program offices that ran and played a significant role within these relief measures must continue to talk and work with Members of Congress. 

That is why I am glad to have Mr. Kelley before us this morning.

In addition to helping administer the PPP, the Office of Capital Access has also, under the Biden Administration, taken the reins of the fraud plagued Economic Injury Disaster Loan program, also known as EIDL and the office was involved with the unconstitutional and underfunded Restaurant Revitalization Fund where Congressional Democrats directed American taxpayer dollars to some small business owners based on race and sex over others.    

To say the least, we have a lot of questions for this Office and how they performed over the last two years.

For example, the Biden Administration continues to defer EIDL payment for small business borrowers. 

These loans which have a maturity of 30 years, now have a deferment period for over 30 months.  That means, the American public, Congress, and law enforcement won’t know how the program has performed, nor will we see the true extent of fraud until payments are required. 

The SBA’s Inspector General has already flagged this program for potentially $80 to $90 billion in fraudulent loan activity.   And yet, this Office, the Administrator, and the Biden Administration continues to defer payments. 

I would like to remind everyone, the EIDL program was a direct loan and grant program where the SBA qualified small businesses and disbursed funds directly. 

The SBA Inspector General has documented that identity theft was rampant in this program. 

In fact, follow up answers to this Committee by the Administrator indicate that the number of flagged applications for identity theft has swelled to over 1 million. 

This means that criminals got through the SBA’s open door and entered the program illegally. 

Additionally, and just yesterday, the SBA Inspector General found in its Independent Auditors report that the SBA Direct Disaster Loan Program continues to be overwhelmed with issues.  The report indicates that the program had “gross improper payments and an unknown payments rate exceeding 10 percent, which is higher than the statutory amount.”

Beyond these very large concerns, this Office also administers all of the SBA’s government guaranteed lending programs. 

These programs which are delivered to small businesses through efficient and responsible public private partnerships with lenders assist small businesses when traditional and conventional capital is not available. 

Who is accessing these programs, who is lending within these programs, how is the SBA overseeing these lenders – these are major questions that need to be addressed. 

With all of the new interest and focus on the SBA, this office’s list of statutorily required duties is long.

They have a lot of work that is mandated in law. 

New and extraneous projects must not divert attention away from what they must accomplish. 

COVID programs must be concluded effectively, efficiently, and responsibly. 

Traditional programs need to be calibrated and staffed appropriately. 

Unfettered policy-making and decision-making will not stand. 

However, I am glad the SBA will at least testify. 

I can’t say the same for Secretary Yellen. 

Even though she was charged with onboarding new PPP lenders, and despite being statutorily required to testify, she continues to ignore this Committee and American small businesses. 

As I said earlier, our work is not done. 

With inflation soaring, the economic environment for small businesses is not great. 

However, despite these challenges, small business owners have the resiliency to drive our nation forward. 

With that Madam Chair, I look forward to today’s conversation and the many conversations before us regarding the SBA’s Office of Capital Access. 

I yield back.

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