Emergency Loan Program Excludes Ex-Cons Trying to Make Good

  A Paycheck Protection Program (PPP) Loan is utilized by small businesses to provide the necessary funds to keep their staff on payroll and to cover necessary expenses such as rent and utilities during the coronavirus crisis. But, if you work for a small business owned by someone that’s paid their debt to society for a criminal past, they may not be eligible.  

Created by the Small Business Administration (SBA), 5.7% of U.S. small businesses have received PPP Loans as of April 14.   

However, the PPP Loan application contains certain language which could hinder many small business owners from applying and subsequently receiving help. Applicants must respond yes or no to the following question: “Within the last 5 years, for any felony, has the Applicant (if an individual) or any owner of the Applicant 1) been convicted; 2) pleaded guilty; 3) pleaded nolo contendere; 4) been placed on pretrial diversion; or 5) been placed on any form of parole or probation (including probation before judgment)?”   

Wyden Responds  

Sen. Ron Wyden (D-OR) released a press release addressing the issue.   

He states, “Though issued guidance excludes applicants with criminal history, including those who were charged but never convicted and those who have already served their sentences, nothing in the CARES [Coronavirus Aid, Relief, and Economic Security] Act requires this prohibition. This guidance is especially troubling considering the rampant racial disparities in our criminal justice system. This exclusion exacerbates existing inequities in access to credit, and lenders should report the number of loans rejected on this basis.”  

Wyden and 22 Senate colleagues wrote and signed a letter to the Trump administration stating these concerns and urging that they “amend guidance on PPP, to reaffirm lending institutions’ obligation to comply with fair lending laws and to require lenders to report on the demographics of any PPP lending.”  

In addition to these concerns, Wyden addressed the Trump administration regarding the health and safety of incarcerated individuals and employees, specifically citing a federal correctional institution in Sheridan, Ore  

Addressed to the Federal Bureau of Prisons (BOP), Wyden wrote, “In light of national reporting that has demonstrated the ferocious infectivity of COVID-19 in confined spaces such as prisons, it is of paramount importance that BOP address these concerns. This crisis must be met with the strictest commitment to the health and safety of everyone, whether incarcerated or not.”  

Merkley Responds  

Sen. Jeff Merkley (D-OR) wrote a letter to the U.S. Small Business Administration that explains his own concerns about the PPP Loan application’s language, stating, “The breadth of this provision is unconscionable, as it punishes individuals who should be innocent until proven guilty and those who have already served their time and, due to the well-known racial disparities in our justice system, disproportionately disqualifies minority-owned businesses.”  

He concludes, “The shortcomings in the current implementation of PPP are all too evident. We have an opportunity to correct these shortcomings, and we must seize that opportunity.” 

Along with pressing the SBA to make changes, Merkley urged Senate leaders to require said changes before adding more money to the program.   

By Cara Nixon 

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