Washington, D.C.— Today, Rep. Nydia M. Velázquez (D-NY), Chairwoman of the House Small Business Committee, and Rep. Judy Chu (D-CA), Chairwoman of the Subcommittee on Investigations, Oversight, and Regulations penned a letter to Small Business Administration (SBA) Administrator Jovita Carranza, seeking more information on the status of the SBA’s Economic Injury Disaster Loan (EIDL) program. EIDL has served as a critical lifeline to small businesses amidst the ongoing pandemic, supporting $366 billion in new lending. In recent months, government watchdogs have highlighted the potential for fraud and abuse in the program.
In March, Congress opened the EIDL program to small businesses with COVID-19 related economic injury, making it the first economic relief program offered to small businesses impacted by the pandemic. Since then, Congress has appropriated billions of dollars for additional loans and grants for the program. On October 28th, SBA’s Office of Inspector General (OIG) released a report detailing instances of fraud and potential fraud within EIDL. The report noted a lack of adequate internal controls in the EIDL review process that left the program vulnerable to abuse.
In the letter, the lawmakers call on the agency to increase transparency to help Congress improve fraud prevention efforts within EIDL.
“While we understand SBA had to act quickly to get money into the hands of small business owners, having the proper internal controls in the program is vital to prevent waste, fraud, and abuse,” wrote the lawmakers. “Moving forward, we want to ensure the EIDL program is operating with minimal fraud, SBA can quickly and easily identify improperly disbursed loans, and the agency has the ability to recover the taxpayer dollars identified as fraudulent. We are committed to working in conjunction with SBA and OIG to address concerns in as fair and effective a manner as possible.”
