[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] WHAT COMES NEXT? PPP FORGIVENESS ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS FIRST SESSION __________ HEARING HELD SEPTEMBER 1, 2021 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 117-030 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 45-478 WASHINGTON : 2021 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman JARED GOLDEN, Maine JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota MARIE NEWMAN, Illinois CAROLYN BOURDEAUX, Georgia TROY CARTER, Louisiana JUDY CHU, California DWIGHT EVANS, Pennsylvania ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANDY KIM, New Jersey ANGIE CRAIG, Minnesota BLAINE LUETKEMEYER, Missouri, Ranking Member ROGER WILLIAMS, Texas JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania CLAUDIA TENNEY, New York ANDREW GARBARINO, New York YOUNG KIM, California BETH VAN DUYNE, Texas BYRON DONALDS, Florida MARIA SALAZAR, Florida SCOTT FITZGERALD, Wisconsin Melissa Jung, Majority Staff Director Ellen Harrington, Majority Deputy Staff Director David Planning, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nydia Velazquez............................................. 1 Hon. Blaine Luetkemeyer.......................................... 2 WITNESSES Ms. Tracy C. Ward, Director of the SBA 504 Loan Program, Self- Help Ventures Fund, Durham, NC................................. 5 Ms. Leslie Payne, Assistant Vice President of Commercial Lending, Affinity Federal Credit Union, Basking Ridge, NJ, testifying on behalf of the National Association of Federally Insured Credit Unions......................................................... 7 Ms. Marla Bilonick, President and Chief Executive Officer, National Association for Latino Community Asset Builders, Washington, DC................................................. 9 Mr. Robert Fisher, President and Chief Executive Officer, Tioga State Bank, Chairman, Independent Community Bankers of America (ICBA), Spencer, NY............................................ 10 APPENDIX Prepared Statements: Ms. Tracy C. Ward, Director of the SBA 504 Loan Program, Self-Help Ventures Fund, Durham, NC........................ 43 Ms. Leslie Payne, Assistant Vice President of Commercial Lending, Affinity Federal Credit Union, Basking Ridge, NJ, testifying on behalf of the National Association of Federally Insured Credit Unions............................ 61 Ms. Marla Bilonick, President and Chief Executive Officer, National Association for Latino Community Asset Builders, Washington, DC............................................. 73 Mr. Robert Fisher, President and Chief Executive Officer, Tioga State Bank, Chairman, Independent Community Bankers of America (ICBA), Spencer, NY............................. 78 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Accion Opportunity Fund...................................... 85 CAMEO - California Association for Micro Enterprise Opportunity................................................ 88 CBA - Consumer Bankers Association........................... 90 CDC Small Business Finance (CDCSBF).......................... 92 Chairtable Nonprofit Letter.................................. 94 JCN - Job Creators Network................................... 97 WHAT COMES NEXT? PPP FORGIVENESS ---------- WEDNESDAY, SEPTEMBER 1, 2021 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 1:00 p.m., via Zoom, Hon. Nydia M. Velazquez [chairwoman of the Committee] presiding. Present: Representatives Velazquez, Mfume, Phillips, Newman, Bourdeaux, Carter, Chu, Evans, Delgado, Houlahan, Kim of New Jersey, Craig, Luetkemeyer, Williams, Hagedorn, Stauber, Meuser, Tenney, Garbarino, Kim of California, Van Duyne, Donalds, Salazar, and Fitzgerald. Chairwoman VELAZQUEZ. Good morning. I call this hearing to order. Without objection, the Chair is authorized to declare a recess at any time. Let me begin by saying that standing House and Committee rules and practice will continue to apply during remote proceedings. All Members are reminded that they are expected to adhere to the standing rules, including decorum, when they are participating in any remote event. With that said, the technology we are utilizing today requires us to make some small modifications to ensure that the Members can fully participate in these proceedings. House regulations require Members to be visible through a video connection throughout the proceeding, so please keep your cameras on. If you have to participate in another proceeding, please exit and log back in later. In the event a Member encounters technical issues that prevent them from being recognized for their questioning, I will move to the next available Member of the same party and will recognize that Member at the next appropriate time slot, provided they have returned to the proceeding. Should a Member's time be interrupted by technical issues, I will recognize that Member at the next appropriate spot for the remainder of their time once their issues have been resolved. In the event a witness loses connectivity during testimony or questioning, I will preserve their time as staff address the technical issue. I may need to recess the proceedings to provide time for the witness to reconnect. Finally, remember to remain muted until you are recognized to minimize background noise. In accordance with the rules, staff have been advised to mute participants only in the event there is inadvertent background noise. Should a Member wish to be recognized, they must unmute themselves and seek recognition at the proper time. Seventeen months ago, during the early days of the COVID crisis, this committee and our counterparts in the Senate worked together to create emergency relief programs to assist small businesses. At that time hundreds of thousands of small firms across the country were closing their doors to protect their customers and their employees. Recognizing the dire nature of this situation, Congress created the Paycheck Protection Program. The PPP was an unprecedented government effort that sought to distribute hundreds of billions of dollars to entrepreneurs so they could keep their lights on and pay their employees. Over the course of the past year, Congress replenished the funds multiple times and made critical improvements to make the program more equitable for the smallest of small businesses and the underserved. More than $800 billion in critical PPP support was provided to small businesses during their time of need. PPP was never perfect, but thanks to the hard work of SBA employees and necessary reforms made by Congress, the program has helped saves millions of businesses from permanent closure. With conditions improving from the loss of the pandemic, it is vital that this committee turn to what may be the most important part of the program, the federal government's promise that this loan can be forgiven and converted into grants. PPP guidelines stipulated that SBA should forgive loans if small businesses spent funds on meeting payroll costs and other related expenses. SBA has already received 5.6 million loans for business requests and made over 5.2 million forgiveness payments. This means that approximately 46 percent of all PPP loans have received payments. This statistic represents progress, but also shows that there is a long way to go. Unexpected debt can hinder a small employer's recovery and cloud its path to future growth, so we must examine the obstacles preventing recipients from loan forgiveness and work to obviate them. I look forward to discussing how the SBA is working to make PPP forgiveness as simple as possible and examining solutions to maximize total loan forgiveness, especially for small dollar borrowers. I would now like to yield to the Ranking Member, Mr. Luetkemeyer, for his opening statement. Mr. LUETKEMEYER. Thank you, Madam Chair, and thank you for calling this very important hearing on Paycheck Protection Program, loan forgiveness, and the process. With the program's application window now closed, Members of Congress must examine the back end process that focuses on forgiveness to insure the program concludes appropriately, prudently, and smoothly for small businesses. Prior to the pandemic, small businesses were displaying optimism, confidence about their economic future. Through a smart tax environment driven by the 2017 Tax Cuts and Job Act and former President Trump's deregulatory actions. Such as cutting two regulations for every new one, these small businesses were investing in their companies, their employees, and their communities. Unfortunately, COVID-19 and overwhelming State and local shutdown mandates devastated the nation's smallest firms. From being closed entirely to altered capacity restrictions, these measures force small businesses into survival mode. Not surprisingly, many small businesses adapted and performed to the best of their ability under dire circumstances. That is what they do. Federal government assistance, like the PP, provided an avenue toward recovery and focused efforts on the nation's more than 60 million small business workers and employees. The PPP proved to be successful due to the efforts of private sector lenders who partnered with the Small Business Administration and the Department of Treasury to deliver funds to small businesses with speed and efficiency. As the program continues to shift towards forgiveness. Today's hearing will show a completely different perspective for lenders who participated in the program. If a small business adhered to the rules set out in legislation and the guidance produced by SBA and the Treasury Department, forgiveness should be attainable. Congress examined this process in 2020 and created a streamlined forgiveness process for all loans below $150,000 in a December COVID package. The SBA has also taken steps to simplify the process to that end. As I have been examining SBA's new direct forgiveness process, it has come to my attention that lenders have received multiple messages which quite conceivable could be considered a threat from the SBA on potential for enhanced lender audits based on their participation within the direct forgiveness process or if they had not offered 2021 PPP borrows an opportunity to move through loan forgiveness. One thing is clear. There are multiple legitimate and prudent reasons why lenders haven't joined the SBA's new direct forgiveness portal, including the fact that some lenders have had systems and portals up and running for months. And I cannot stress enough this next reason, which is many lenders would like to assist their small business borrowers through the completion of this program. I will not stand by and let lenders who are punished for working closely with their small business borrowers, the SBA, their dismal performance and attempt at direct lending through the EIDL program to provide a warning to everybody that the SBA is ill-suited to perform many of these tasks. I will continue to watch these developments closely. At today's hearing I look forward to hearing more about the relationship between SBA and private sector lenders. Has there been an open line of communication? And where should improvements be made going forward? Additionally, I am also concerned about further changes to the forgiveness process that can open the program to increased levels of waste, fraud, and abuse. Granting blanket forgiveness has the potential to remove critical safeguards that are in place to ensure that American taxpayer dollars are protected. PPP loan forgiveness oversight is even more important considering recent reports indicating that certain fintech lenders have been connected to many of the program's most problematic loans. These are significant issues that I plan to continue to examine closely. As Members of Congress assist the small business economic recovery, we must not ignore the barriers being enacted that will prevent small business growth in the future. At a time when most small businesses are simply trying to stay afloat, President Biden and congressional Democrats are pushing tax increases on both the corporate and individual levels, the elimination of step-up basis on inheritance, and a slew of other harmful changes. These tax changes have implications for all small businesses and farms, and main street USA should not be forced to pay for the Democrats' outrageous and unnecessary spending agenda. Our nation's small businesses are already facing worker shortages and skyrocketing inflation. We should be creating an environment that allows small businesses to create jobs, expand, and grow, not perpetuating an environment that requires them to scale back. I want to thank all of the witnesses for joining us today, and I look forward to our discussion. Madam Chair, with that, I yield back. Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The gentleman yields back. I would like to take a moment to explain how this hearing will proceed. Each witness will have 5 minutes to provide a statement and each committee Member will have 5 minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return to mute when finished. With that, I would like to introduce our witnesses. Our first witness is Ms. Tracy Ward, the director of the Self-Help Ventures Fund 504 loan program, who has led the way for her CDFI in helping very small borrowers access to the PPP program. In 2020 and 2021, Self-Help made just under 2,800 PPP loans totaling $253 million in COVID-19 relief funding. 65 percent of their PPP borrowers were small businesses and nonprofits led by people of color. Self-Help is affiliated with the Center for Responsible Lending, a national nonprofit for research on policy organization dedicated to protecting home ownership and family wealth by working to eliminate abusive financial practices. Thank you for joining us today, Ms. Ward. Our second witness is Ms. Leslie Payne of Affinity Federal Credit Union in Basking Ridge, New Jersey. Ms. Payne is the credit union's Assistant Vice President for commercial lending and has been personally involved in the credit union's PPP lending. Her credit union has updated to the SBA direct forgiveness platform, so we look forward to hearing about her Members' experience. Today she is testifying on behalf of the National Association of Federally Insured Credit Unions. Thank you for joining us today, Ms. Payne. Our third witness is Ms. Marla Bilonick, the President and CEO of the National Association of Latino Community Asset Builders or NALCAB. She also serves as CEO of NALCAB's subsidiary asset management company, Escalera Community Investment. NALCAB is a nationwide network of over 130 mission- driven organizations that are encore institutions in predominantly Latino communities. Ms. Bilonick brings over 20 years of expertise in small business development and community-based financial services with an emphasis on the U.S. Latino population. Ms. Bilonick testified before the committee last Congress on issues related to underserved business development. It is my pleasure to welcome her back to the committee. The Ranking Member, Mr. Luetkemeyer, will now introduce our final witness. Mr. LUETKEMEYER. Thank you, Madam Chair. Our next witness is Mr. Robert Fisher. Mr. Fisher is the president and chief executive officer of Tioga State Bank located in Spencer, New York. In addition to his leadership role at the century-old Tioga State Bank, Mr. Fisher is currently the Chairman of the Independent Community Bankers Association of America, also known as ICBA. Additionally, he is a Member of ICBA's Federal Delegate Board and its policy development and nominating committees, not to mention Mr. Fisher is a fifth generation community banker. He is also a graduate of the University of Notre Dame and a United States Air Force veteran. Mr. Fisher, I want to thank you for taking time away from running your bank to join us today, and I want to thank you for your service to our nation. I also want to thank the other witnesses for joining us and look forward to your questions. Thank you for doing all you can while we are in this pandemic era here, a unique time that we have been involved in this. Your testimony today is going to be very important to us to be able to understand some of the issues that you face and that we need to be addressing. Thank you very much. And with that, Madam Chair, I yield back. Chairwoman VELAZQUEZ. Thank you all for being here today. Ms. Ward, you are recognized for 5 minutes. STATEMENTS OF MS. TRACY C. WARD, DIRECTOR OF THE SBA 504 LOAN PROGRAM, SELF-HELP VENTURES FUND; LESLIE PAYNE, ASSISTANT VICE PRESIDENT OF COMMERCIAL LENDING, AFFINITY FEDERAL CREDIT UNION, ON BEHALF OF THE NATIONAL ASSOCIATION OF FEDERALLY-INSURED CREDIT UNIONS; MARLA BILONICK, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL ASSOCIATION FOR LATINO COMMUNITY ASSET BUILDERS-NALCAB; AND ROBERT FISHER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, TIOGA STATE BANK, CHAIRMAN, INDEPENDENT COMMUNITY BANKERS OF AMERICA (ICBA) STATEMENT OF TRACY C. WARD Ms. WARD. Thank you, Chairwoman Velazquez, Ranking Member Luetkemeyer, and Members of the committee. My name is Tracy Ward, and I represent Self-Help, a Community Development Financial Institution, and a PPP lender. Thank you for the opportunity to provide testimony today. At the start of the pandemic, Congress came together to create the Paycheck Protection Program, delivering urgently needed funds to small businesses to limit mass layoffs and business closures. Congress designed PPP as a forgivable loan with the explicit promise that funds spent properly would not have to be repaid. Today we are asking for several fixes to PPP forgiveness to ensure that promise can be kept. SBA implementation of this unprecedented program was remarkably fast, but it came with a complex and constantly changing set of rules, and Congress placed the burden of understanding these rules on small business borrowers, quite a challenge for small businesses in survival mode scrambling to access limited funds. As a result, many of the smallest businesses are not getting that promised forgiveness--even when they have spent every penny properly. For example, an independent contractor in Illinois received a much-needed PPP loan of just under $20,000. Two days before he applied, SBA issued a new rule effective immediately that limited the way businesses like his could document the request, so now his loan is not forgivable, even though he completed his application in good faith and spent the funds properly. This Black-owned microbusiness instead of being able to recover is being held back by an unexpected $20,000 debt trap. Congress and SBA have recognized and addressed some of the unintended challenges faced by the smallest businesses in accessing PPP loans. One significant change was an adjustment earlier this year in the loan amount calculation for most microbusinesses, sole proprietors, independent contractors, and self-employed individuals, the smallest of the small; but that change was not applied retroactively, denying thousands of businesses adequate relief. One such business is a Black-owned child care in North Carolina, which received only $2,750 in PPP funding. Had this change been retroactive, she would have been eligible for an additional $14,000 to support her operations. And despite Congress making this exact same change retroactive for small farmers and ranchers, other microbusinesses, like this child care, were left out. It is important to remember that these challenges are exacerbated for small businesses of color, which are overwhelming microbusinesses that entered the pandemic credit starved and with limited access to mainstream banking services due to structural limitations that have been well documented by our affiliate, the Center for Responsible Lending, and by others. We propose several clear fixes to the forgiveness rules to ensure fairness and to avoid inadvertently causing further harm to the smallest businesses who are the least able to sustain it. One, eliminate ``gotcha'' denials of loan forgiveness due to sudden changes in rules that were imposed without notice. Two, rescind SBA's January 15, 2021 rule denying forgiveness to borrowers who made good faith errors. Three, require lenders to opt in to SBA's direct forgiveness portal if they are unduly slow processing forgiveness or if they are unresponsive to their borrowers. The portal should expand the options for forgiveness, not limit it. Four, alleviate unnecessary paperwork burdens for the smallest businesses by automatically forgiving loans of $25,000 or less. These microbusinesses overwhelmingly should qualify for full forgiveness based on program rules. Finally, improve and refocus SBA's loan review process to ensure that fraudulent activity is prosecuted and that businesses who applied in good faith are not harmed by uncertainty and delay. In this ongoing crisis, small businesses deserve responsible follow-through on PPP's promise so they can get back to running their businesses and employing their communities. Without changes, the forgiveness stage of PPP will exacerbate preexisting inequities, and for many of the smallest businesses, will turn Congress' promise into a bait and switch. Thank you for addressing this important issue, and I look forward to your questions. Chairwoman VELAZQUEZ. Thank you, Ms. Ward. Ms. Payne, you are recognized for 5 minutes. STATEMENT OF LESLIE PAYNE Ms. PAYNE. Good afternoon, Chairwoman Velazquez, Ranking Member Luetkemeyer, and Members of the committee. My name is Leslie Payne, and I am testifying today on behalf NAFCU. I am the AVP of commercial lending at Affinity Federal Credit Union. Over the last 18 months, I have been tasked with the implementation and day-to-day management of the PPP initiative at Affinity. I am proud of the work that we have done to help our Members through these challenging times, and I thank you for the opportunity to appear before you today to discuss the PPP forgiveness process. Credit unions have gone above and beyond to ensure small businesses in their communities are taken care of during the pandemic. Though Affinity was already an SBA lender, many credit unions signed on as PPP lenders despite not having done SBA lending before. An analysis of the SBA's PPP data shows that credit unions made loans in amounts much lower than the national average, and credit union PPP loans went to the smallest of small businesses. Affinity provided 1,058 PPP loans in the first round of the program, totalling approximately $58 million in lending. We provided an additional 603 loans in the second round for approximately $38 million. Our overall average PPP loan was approximately $56,000, with over 90 percent of loans $150,000 or under. Our smallest PPP loan was approximately $700, while our largest was approximately $1.7 million. Borrowers have come to rely on their credit units to assist them through every phase of the PPP process, including forgiveness. The initial complexity of the PPP forgiveness process posed challenges for many small businesses who may not have the staff or the expertise for such a complex application. We were pleased to see Congress enact a simplified forgiveness process for loans under $150,000. However, credit unions continue to grapple with simultaneously processing loan forgiveness applications while meeting the routine needs of their small business Members. Many credit unions, such as Affinity, have invested money to create a solution for Members to complete online applications and upload supporting documentation or work with a third-party vendor to streamline the overall process. A primary source of frustration for credit unions on forgiveness has been the SBA's ongoing requests for additional documentation for applications under review even for small dollar loans. Still, almost 80 percent of our PPP loans at Affinity have been forgiven. For Affinity's forgiveness applications overall, it has taken on average 9 days from application submission to SBA approval. For forgiveness applications that have been placed under review, it has taken an average of 47 days. SBA's recent introduction of the revenue reduction score is a welcome change will help expedite the forgiveness process. The SBA also recently launched the Direct Borrower Forgiveness Portal. At Affinity, despite the time and money invested in implementing solutions to process forgiveness applications in- house over the last year, we are one of many credit unions that have opted into the portal. Although the process streamlines the borrower's experience, it does not necessarily streamline the process for all lenders as many will have to monitor the SBA system and update their commercial lending platforms manually. However, the portal offers smaller credit unions that have not had the ability to leverage a third party vendor or lack the means to develop a streamlined in-house process, a simple solution to process forgiveness applications. Despite many opting into the portal, credit unions generally feel it would have been more beneficial at the onset of the forgiveness process. Some credit unions are choosing to not opt into the program because they feel the systems they have created are more consumer friendly. Moreover, integrating the new portal is operationally burdensome. There are also concerns that the SBA will not answer borrowers' questions in a timely or complete fashion. It was very difficult to get answers in a timely manner last year, and some credit unions fear that borrowers will use the portal and then come back to their lender with questions, but the lender has no control over the system and will not be able to assist the borrower. At Affinity we have had some frustrations with the process, such as the SBA communicating directly with borrowers without alerting lenders, and the SBA not alerting Members that borrowers apply directly for forgiveness. Two ways that Congress can take to improve the forgiveness process would be, one, increasing the loan size for the use of the portal and revenue reduction score and, two, urging the SBA to follow up on its commitment to focus its review on larger and higher risk loans. Adopting this approach to forgiveness reviews will conserve the SBA's resources and allow the agency to more efficiently allocate their finite resources to those PPP loans that warrant additional review. In conclusion, we are proud of how we have been able to help our small business Members stay afloat and retain employees through the PPP. At Affinity, like at all credit unions, our priority is our Members. Our team has been and remains committed to guide our Members through the PPP experience successfully. I again thank you for the opportunity to appear before you today, and I welcome any questions that you may have. Chairwoman VELAZQUEZ. Thank you, Ms. Payne. Ms. Bilonick, you are now recognized for 5 minutes. STATEMENT OF MARLA BILONICK Ms. BILONICK. Thank you. Good afternoon, Chairwoman Velazquez, Ranking Member Luetkemeyer, and Members of the committee. My name is Marla Bilonick, and I am the president and CEO of the National Association of Latino Community Asset Builders, otherwise known as NALCAB. It is my sincere honor to be addressing you today about Paycheck Protection Program forgiveness and speaking on behalf of NALCAB, our Member organizations, and the small businesses that they represent. NALCAB is the hub of a national network of over 140 mission-driven organizations that are anchor institutions in geographically and ethnically diverse Latino communities across the nation. Our vision is to dramatically scale the flow of public and private sector capital that responsibly meets the asset- building needs and opportunities in the communities we serve. As a grant maker and U.S. Treasury certified CDFI lender, NALCAB strengthens and coordinates the capacity of the NALCAB network to deploy capital. We know that the strength of the U.S. economy relies on the fast-growing Latino communities' hard work, entrepreneurial experience, spending power, and leadership. While the Latino community in the United States is often heralded for starting small businesses at rates higher than other ethnic groups, the adverse economic effects of the pandemic have disproportionately impacted Latino business owners. Stanford's Latino Entrepreneurial Institute surveyed 7,000 small business owners and cites that 86 percent of Latino-owned businesses suffered immediate negative financial impacts from the pandemic. At the same time, Latino business owners were successful at securing PPP loans at only half the rate of their White counterparts and only 3 percent of Latino-owned businesses received their full funding request. NALCAB was called upon to provide capital to several Members to facilitate their PPP lending. As a CDFI in our own right, we ultimately loaned our Members close to $12 million for PPP loans which resulted in them making 640 loans to small businesses in their communities. NALCAB Member CDFIs, including heavy hitters like Accion Opportunity Fund, Self-Help, LiftFunds, and CDC Small Business Finance, were able to provide business clients with PPP loans when banks could not or would not. In fact, NALCAB Member and CDFI, Prestamos CDFI was the third highest PPP lender in the nation, including traditional commercial banks. Prestamos made close to 500,000 PPP loans averaging around $15,000 each, for a total of close to $8 billion in PPP lending. JP Morgan Chase and Bank of America topped the ranking with over $12 billion and over $9 billion respectively. As of August 2021, roughly half of PPP borrowers had submitted forgiveness applications with the other half outstanding. Advances have been made to streamline PPP forgiveness, including the July launch of the Direct Forgiveness Portal which is an immediate and simplified clearinghouse for forgiveness applications attached to loans of $150,000 and below. Discussions with CDFI Members of NALCAB point to the portal now being the primary channel available in seeking loan forgiveness for their small business clients. Between April and August, the forgiveness applications process practically doubled from the national number reported in April. This may be partially attributed to the Direct Forgiveness Portal. Number three ranked PPP lender and NALCAB Member Prestamos CDFI reports that they are directing clients almost exclusively to the SBA PPP forgiveness portal and have found that to be a straightforward avenue for achieving forgiveness. However, they noted that they fear that some clients are missing out on loan forgiveness due to lack of awareness of the process and/or lack of access to technology to connect to the portal. The additional CDFI Members we spoke with from coast to coast all reported the portal was now their primary channel for client forgiveness, even in the cases where they had developed their own technology ahead of the portal. While only a sliver of NALCAB PPP lenders made loans over five figures, we are supportive of stretching simplified forgiveness process for loans up to $350,000. This would further ease the burden on even more small businesses that are doing their best to power through recovery. In addition, it would lighten the administrative load of lenders that have supported those businesses through their PPP journey. We agree that PPP loans of $350 thousand and above are in a different class and justify higher scrutiny. Loans that were made in the initial stages of the Paycheck Protection Program in 2020, when there was some confusion regarding calculations around loan sizing, have resulted in good faith error that generated some PPP loans that exceeded borrowers' correct maximum amount. In January of 2021, the SBA's procedural notice informed PPP lenders of said excess loan amount errors. Particularly in cases of smaller amounts, small loan amounts, this seems like undue efforts to squeeze dollars out of the very borrowers that the PPP program was designed for, borrowers that most certainly used every cent of their PPP loan to ensure their businesses stayed afloat and to keep their employees on payroll. I don't believe I have time to go into my recommendations, but they were outlined in the content of the testimony. Chairwoman VELAZQUEZ. Thank you. Ms. BILONICK. Thank you very much for your time. Chairwoman VELAZQUEZ. Thank you, Ms. Bilonick. Mr. Fisher, you are now recognized for 5 minutes. STATEMENT OF ROBERT FISHER Mr. FISHER. Chairwoman Velazquez, Ranking Member Luetkemeyer, and Members of the committee. I am Bob Fisher, president and CEO of Tioga State Bank, a $550 million community bank in Spencer, New York, and Chairman of the Independent Community Bankers Association of America. So thank you for the opportunity to testify at today's hearing. The PPP was a natural fit for the business model of community banks. We are small business lending specialists with local knowledge and deep roots of the communities that we serve. My bank's PPP lending is typical of a community bank. We made a total of 929 loans for $64.8 million, saving roughly 10,000 jobs. Our average loan was just under $70,000, and Tioga State Bank's 40-year history as an SBA 7(a) lender helped us to navigate sometimes challenging SBA channels on behalf of our borrowers. Our largest PPP loan, $2.7 million, was to a southern tier independent center. They are a large not-for-profit in Binghamton, New York, dedicated to helping people with disabilities remain independent. The loan helped prevent staff layoffs and allowed the center to continue to provide critical services in our community. Other community banks have similar stories and results. In aggregate, community banks made nearly 60 percent of the PPP loans which supported nearly 50 million jobs. What's more, community banks made over 80 percent of PPP loans to minority- owned and women-owned small businesses and nearly 70 percent of the PPP loans to veteran-owned small businesses. I am proud that my industry stepped up to support the survival of these diverse businesses in a time of crisis. We are well into the forgiveness phase of the program, and this process must be as simple as possible for borrowers so that they can focus on operating their businesses in a still uncertain environment. We are grateful to this committee and Congress at large for its role in making statutory changes and advocating for a streamlined process. As you know, the SBA has created the Direct Borrower Forgiveness Portal for PPP loans of 150,000 or less. My bank has a strong record of processing forgiveness applications and has chosen not to use the portal. Like many community banks, our true value proposition is relationship lending. We believe we owe it to our borrowers to ensure a smooth process from origination until full forgiveness. If there are technical or communication problems with the SBA--and this has, frankly, been a major concern--we want to use our expertise and relationship with the agency to resolve them. This is good business practice and best for our borrowers. We are working expeditiously and are as eager as our borrowers to obtain full forgiveness. ICBA insists that SBA respect lenders' choice to not use the portal. Instead. The SBA has threatened to audit these lenders. What's more, the SBA suggests that lenders are deliberately delaying forgiveness to spread out fee income. That practice would be unacceptable and would cut against the grain of community bank relationship lending. I can assure you that no community bank that I know of is engaging in it. Our strong record of PPP lending in a time of crisis must not be diminished by these accusations. My bank and other community banks choose to preserve our borrower relationships and not be cut out of the process by a direct SBA program. More broadly, bank underwriting and servicing is what makes SBA lending programs so effective and must not be displaced by direct programs. As we conclude the PPP, reports of fraud and abuse have surfaced in the media. These problems must be reduced to the greatest extent possible not only in the PPP but in all SBA programs. My bank has experienced no PPP fraud and 100 percent forgiveness. Like other community banks, we own the consequences of our lending decisions and underwrite with great care. However, certain lenders with little experience in underwriting or with the SBA crowded into PPP. Safeguards were lowered in response to the crisis and, not surprisingly, these lenders may be subject to higher incidents of fraud. As normal state returns, the SBA should proceed with great caution as it considers changes to existing programs. Tioga State Bank and many community banks highly value a robust and sustainable 7(a) program. Fraud puts all SBA programs at risk. Thank you again for convening today's hearing and for the opportunity to offer my perspective, and I am happy to answer any questions you may have. Thank you. Chairwoman VELAZQUEZ. Thank you, Mr. Fisher. Thanks to all of the witnesses for being here today and for your work and engagement on the PPP. I will begin by recognizing myself for 5 minutes. Ms. Payne, less than one-quarter of all PPP lenders have updated to the SBA direct forgiveness platform. Even though your credit union invested in its own platform, you also updated to the SBA platform. Can you share with us any feedback your borrowers have had on the SBA platform? Ms. PAYNE. Yes. Thank you for the question. We have opted in, and largely we opted in, we have a system in place that has been working quite well. We jumped on the forgiveness quite early in the process and put things in place that we needed to do. We made our investments and such. We opted in because we want to give our borrowers every opportunity for forgiveness, so we have offered that. To date, since the portal has opened, the Direct Forgiveness Portal has opened, we have seen approximately 12 percent of our borrowers go to the direct portal. So the majority of our Members are still coming to us to directly go to our portal for forgiveness. But what we have heard from our Members is that, from their perspective, that the portal has been user friendly. From the lenders' perspective, this creates more manual process for us. As we do have our own process in place, we have to proactively go into the SBA portal and check the website, and then manually we are inputting data in the beginning of the process as well as at the end of the process. So another concern that we have is in the early stages--we are still in the early stages, and there are still some unknowns with regard to the confusion and communication that our borrowers will get from the SBA and when they will get that communication. Chairwoman VELAZQUEZ. Thank you. Ms. Ward, we have heard from borrowers that they are responsible for paying, with interest, excess loan amounts caused by PPP miscalculation from a lack of rules and clarity early in the program. Should this excess loan amount be forgiven if loan proceeds were spent on forgivable purposes? Ms. WARD. We believe they should. We have seen many borrowers that are facing issues where they applied, based on the current rules in place as they understood them; but because the rules were complicated: some businesses were able to include owner healthcare costs, some were not. Some could document payroll showing 941s, others had different methods that could be more complicated. So we are seeing borrowers that are caught in this issue of having applied in good faith for a loan that they then used to keep their business operating, to keep their staff employed, and now at forgiveness, because the rule may have changed within days of when, they applied, they are not going to be able to get full forgiveness and they are caught in that. Chairwoman VELAZQUEZ. How is your institution handling these good faith errors? Ms. WARD. So we are working with our borrowers when we find situations like this--I will say, luckily, we are not finding many situations like this within our own PPP borrowers. We had processes in place and worked closely--as Mr. Fisher said, community banks are very--have a relationship and work hard with our borrowers to try and make sure that they understand the loan they are getting and how to get this forgiveness. Chairwoman VELAZQUEZ. Okay. Ms. WARD. We are hearing and seeing news reports about especially small lenders, small borrowers who are caught in this and are not going to be able to get forgiveness. We have been able--on a couple of cases where we have borrowers in this situation at Self-Help, we are working with them to try and identify are there other potential documents they have that might help us get them to full forgiveness. Chairwoman VELAZQUEZ. Thank you. Ms. Payne, any comments on the PPP miscalculations? Ms. PAYNE. Yes. I think we have experienced several loans. With the initial PPP guidance, it was continuously evolving. Both the Members and lenders were trying to get their arms around the guidance and the rules, a very stressful and chaotic time. I think that each loan should be looked at on its own merits. If there was an error and it was made in good faith but the use of the funds was permitted, then I believe that these loans should be considered for full forgiveness. Chairwoman VELAZQUEZ. Thank you. Ms. Bilonick, would you support increasing the qualifying loan amount to $350,000 to help SBA deliver forgiveness more efficiently and enable more small businesses to focus on their recovery? Ms. BILONICK. Absolutely. I think anything that will reduce the burden on both the borrowers and the lenders is a positive and should be supported. This would bring the percent over 90 percent of PPP loans, and I think it is a sound recommendation. Chairwoman VELAZQUEZ. Thank you. My time has now expired. The Ranking Member, Mr. Luetkemeyer, is now recognized for 5 minutes. Mr. LUETKEMEYER. Thank you, Madam Chair. And just to comment first, you know, whenever you see that basically one in six loans are made by fintechs and 9 out of 10 of those we are looking at as fraudulent and most of those loans are under $350,000, and the OG report--IG report said that half the loans under $350,000 are probably where your theft, identity theft and fraud are, for us to not look at those is, like, the administration leaving $85 billion worth of military equipment behind in Afghanistan for no reason whatsoever. This is nuts for us not to go after people who have intentionally gamed the system and are making away with dollars that the taxpayers have paid in and half the program would not be looked at. This is--I think it is a very, very wrong way to approach this. Mr. Fisher, you talked about in your testimony something that is very, very concerning to me with regards to the SBA and their threat to audit entities, banks, credit unions, other entities that may do PPP loans if they don't participate in the portal. What is your experience with this? What have you heard about this? Can you elaborate on it? I know you said in your testimony--I'm reading it as well. Would you like to elaborate just a little bit on that, please? Mr. FISHER. Sure. We received communication from SBA on Monday that there was potential for audit if you did not participate in the portal, the forgiveness portal. And from day one, we decided we wanted to be that interface between our customer and the SBA because it is, it is a very confusing, complicated process. And we feel that we have got the expertise. The customer doesn't. So we want to, you know, control that relationship and help our customer navigate through this whole forgiveness process, and we don't feel we should be--we have worked forgiveness very hard. In fact, we only have five loans from the first round that are still waiting for forgiveness, and it is not for a lack of effort on our part. We have been reaching out to those borrowers to get them to seek to apply for the forgiveness. Mr. LUETKEMEYER. So it is a choice on your part how you want to approach forgiveness, and the SBA is trying to threaten you into making the choice, their choice, basically. Is that right? Mr. FISHER. That is how it feels, yes. Mr. LUETKEMEYER. Well, I would urge you if you find banks that have received this threat and then receive an audit as a result of that, please contact me and my office. We want to follow up on this. We want to hold SBA accountable for outrageous statements like this. This cannot go unchallenged. This cannot be allowed to happen. So, please, work with us if you see this happening within the banking community that you work and your association works with. Thank you so much for that. You know, you made some great statements here, Mr. Fisher, as you were going through discussing the banks making the loans. You know, the banks have something called know your customer, and in doing that, I think we have found that---- And as I mentioned earlier, the fintechs don't have that sort of firewall and, as a result, they are the ones that are causing a lot of problems here, although there is not a lot of problems with PPP compared to, like, the EIDL program which has got almost a third of it which is the most fraudulent stuff. But the underwriting that you are able to provide and the know your customer seems to be a real key in being able to minimize the fraud, minimize the abuse, and also set you up for being able to get forgiveness for your customers because you have done it right. Would you agree? Mr. FISHER. I totally agree. I mean, that is--we know our community. We know our customers. And I think that is what made the process work for community banks and why we were able to do 60 percent of the PPP lending. Mr. LUETKEMEYER. It is concerning to me that, you know, as we continue to go through this process here and we are looking at--and I don't believe to bring the EIDL program into the PPP discussion here unnecessarily, but I think it lends--the PPP program here, by having had the banks do the underwriting, be able to do the hard work of know your customer and prepare the loans to be able to be approved by SBA, showed that that is a template I think for being able to do things the right way and minimize fraud and abuse. When you look at SBA's direct lending program, which is the EIDL program, and how fraught it is with fraud, it really sets up the contrast of does SBA really need to be in the direct lending business. So would you like to address that question? Mr. FISHER. We have always felt that, you know, with the 7(a) program and 504 programs that community banks--you know, we have that relationship with our borrowers, and I think it really has reduced fraud. As I said, we experienced zero fraud in our PPP lending, and I think that just shows how relationship banking works and how utilizing community banks to be the interface with small business is so effective. Mr. LUETKEMEYER. Thank you very much for your testimony, Mr. Fisher. We certainly appreciate your thoughts and observations today. Thank you. With that, Madam Chair, I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. I now recognize the gentleman from Maryland, Mr. Kweisi Mfume. Mr. MFUME. Thank you, Madam Chair. Thank you for calling this hearing. Ms. Payne, I would like to just start with you, if I might. From your own perspective, what were some of the considerations that went into you offering your own PPP forgiveness platform as opposed to the SBA's? Ms. PAYNE. Well, the first consideration was that there was no platform that the SBA was offering or putting out there. The forgiveness process was technically to start almost immediately. We took our first forgiveness application in September of 2020. So we needed to put something in place, and we did. We bought a software program, we trained our staff, and we pulled other resources. We wanted to be responsive. This was a temporary loan to help these businesses get through a very chaotic and traumatic time, and they needed to know that this was going to be forgiven, not that they had additional debt. So so many wanted to get forgiven as soon as they could, so we responded to our Members' needs, and that is what we did. We initiated our own platform, and we invested the time and resources and money to do that to be responsive. Mr. MFUME. So most of your credit union Members have used your platform rather than the SBA's platform. I would ask you, how would you evaluate the borrower outcomes? Are they comparable? Are there things that jump out at you that are cause for alarm? Ms. PAYNE. No. We have not had too much cause for alarm. The process, I will admit, early on was slow as we were learning it, and we did not necessarily anticipate the number of loans going under review. When we started, they were taking 10 percent of our loans and putting them under review, and that creates very much the back-and-forth problem, and it is time- consuming for our Members and it is stressful. They don't know why they are under review, and we can't-- you know, we don't know if it is random or otherwise. But in that sense, that process started slowly; but once we got up and running and really hit stride, we haven't seen any major issues. It is just when we go under loan review, it can be very time-consuming; but we have per my testimony, we have submitted 80 percent of our portfolio has gone through the review process. Not all are 100 percent forgiven, but there are some that have some partial forgiveness; but overall we have had very good success rate on behalf of our Members. Mr. MFUME. Mr. Fisher, if I could turn to you for just a moment. You occupy a rather unique perch both as president of Tioga and as Chairman of the Independent Community Bankers of America. So far only about a quarter of all PPP lenders have opted in to SBA's direct forgiveness platform. Do you think, sir--or what do you think could have been done differently to have made that platform more appealing to persons? And if you had your druthers--let's hope we never go through this again; but if we were to go through something like this again, what would you recommend? Mr. FISHER. I think--you know, I think the issue is most banks had their forgiveness plan in place. We have already developed systems. We have a methodology of how we put customers through forgiveness, so SBA rolling this out late in the game has made it problematic. So I think had they wanted this portal to be used, I think I would have rolled it out when forgiveness started. It is kind of late in the game to throw in another ancillary system when we already have it pretty down for our customers. Mr. MFUME. Okay. Thank you, Madam Chair. I have no other questions. I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. The gentleman from Texas, Mr. Williams, is recognized for 5 minutes. Mr. WILLIAMS. Thank you, Madam Chair. And before I get started, I want us, all of us across this country, to remember those 13 families that are--we are all praying for the loss of those young men and women and also remember those people who are still stranded in Afghanistan this morning. I am a small business owner, have been for 51 years. My whole life has been done dealing with credit unions and community banks, and I can tell you that the main street America does it a heck of a lot better than the federal government. And I want to say thanks to all of the lenders for getting this program out, and it is interesting that all of a sudden the SBA wants to get involved in the program here of late with portals, and so forth, and now we have to have a hearing. So just, again, the government does it better--or the private sector does it much better than government. When I talk to borrowers and lenders back in Texas, I constantly hear about communication issues with the SBA. Last week a lender told me there are some loans that have been submitted for forgiveness as far back as January, and we are hearing that this morning, that have yet to receive an update after 8 months. When the bank calls the PPP hotline for updates, it no longer is even in service, and the SBA can't continue to leave small business owners and community banks in the dark when they are taking all necessary steps to recover from the pandemic, these small business owners. So, Mr. Fisher, thank you for your service and what you are doing. I want to say, can you discuss your interactions with the SBA and describe how responsive they have been to your inquiries? Mr. FISHER. Communication throughout the process has been difficult, especially early on in the process. We have got some great connections with our local SBA office, and those folks are greatly helpful, but they are also limited in some of the knowledge that they have and, obviously, this was a new program, constant guidance changes, and things like that. So it was--communication was very problematic throughout the process and continues to be somewhat problematic in certain areas. I know of a local bank that I just heard a story yesterday that they had opted out of the forgiveness portal, yet their customers all received notices from SBA saying that they could apply through the portal, which was not active for the bank because they hadn't opted into the program, which caused chaos with their customer service center, so---- Mr. WILLIAMS. Well, we are hearing stories like this all over, and I can tell you firsthand, it is tough to communicate with them. Lenders were given two options for PPP loan forgiveness: Either opt into direct forgiveness with the SBA or opt out and continue to process loans themselves. We are hearing about that that today. Most commonly bankers did not opt into direct PPP forgiveness for two main reasons. Lenders had already created an internal process, which we know that, or contracted this work out to a third party when they saw how important the forgiveness aspect of PPP would be in the future. In addition, as we have heard today, many banks were reluctant to opt in because the SBA had not been the most reliable partner in the past, and that is an understatement. And, unfortunately, on Monday morning, as we have heard, the SBA sent a notice to all lenders that they would be under more intense scrutiny for their loans if they did not participate in the Direct Forgiveness Portal, and here they are coming in late and messing everything up. So making this change so late in the process has caused confusion and even more headaches for the banks who make PPP so successful. So, Mr. Fisher, you have touched on this, but I think we need to talk about it even more. Can you discuss the risks you may face due to the recent announcement from the SBA and why you choose and chose to opt out of the direct PPP forgiveness in the first place? Mr. FISHER. Obviously, as I said before, they threatened potential audits, although they sent a follow-up email that maybe said that we wouldn't be audited, but I am not sure, you know, which letter to believe. But I think the reason we opted out is because we are relationship lenders. I mean, we want to be that interface between the lender and SBA because of--it is a complicated process, and we want to make sure that our customers are getting the correct information, that they don't have to learn the entire process. We know it. We have been through it. We have worked with SBA for 40 years, so we want to be that interface, that relationship that we have with both the SBA and our customer. We want to enhance that. Mr. WILLIAMS. Well, a heavy-handed government is never good, and we are seeing that here firsthand. Just quickly, Mr. Fisher, can you elaborate on the importance of relationship banking for PPP forgiveness and how more government involvement may draw out this process? Mr. FISHER. I just think relationship banking, that is the role--that is the key for community bank, how we interact with our customers, and I think it really cuts down on fraud. As I said previously, you know, we have had zero fraud. Most of the banks that I know have had zero fraud. So I think fraud and just having those relationships is critical. Mr. WILLIAMS. Well, thank you for that, and the government cannot say that. So thank you for what you are doing. And I take my time and I yield it back. Chairwoman VELAZQUEZ. The gentleman yields back. I now recognize the congress lady from Georgia, Ms. Bourdeaux. I would just like to also say to Mr. Fisher, when we had the first tranche of money that went out and in the first 2 weeks it was all gone, the data that we didn't get from the administration then showed that many small businesses in underserved communities and real small businesses were not able to access any PPP money because they didn't have preexisting relationships with banks. The big banks didn't lend to those small businesses. It wasn't until we intervened and we demanded from the Secretary of the Treasury to set aside money for mission-based lenders, that those data, those numbers didn't change. The same is true now with the great work that the SBA is doing in informing small businesses what they need to do in order to fill out the forms and take every step to be able to-- for their loans to be forgiven. Ms. Bourdeaux, you are recognized for 5 minutes. Thank you. Ms. BOURDEAUX. Thank you, Chairwoman Velazquez, and I have a similar line of questioning to some of the points that you raised. And thank you, Ranking Member Luetkemeyer, for holding this hearing. This access to PPP loan forgiveness is something I have been very concerned about since the moment I was sworn into Congress. In particular, we have heard a lot about discrepancies in loan forgiveness among underserved small businesses, particularly minority-owned businesses, in my community. And we did some informal surveys of who had gotten loan forgiveness and who hadn't and found that minority-owned businesses didn't know to ask, you know, didn't know how to follow up. And I think the testimony of Ms. Bilonick raises some of these kind of unanticipated problems that often occur with some of these very entrepreneurial, very vibrant businesses that just don't have that traditional relationship with a lender. This is one of the reasons I worked with the committee to submit additional views to the American Rescue Plan, encouraging the Small Business Administration to work to ensure equitable administration of emergency assistance, including PPP loan forgiveness. The SBA I think took a very important step towards ensuring greater access to loan forgiveness by opening their portal to provide forgiveness to loans less than $150,000. Unfortunately, as has been discussed in this hearing, you know, there is a lot of--you know, this is also creating some tradeoffs. But just to start off, Ms. Bilonick, can you just talk a little bit more--you raised some of the, kind of I wouldn't know, that I didn't know kind of issues that come up with some of the businesses in the Hispanic community. I have a very large Hispanic community. You know, when they are trying to approach working towards PPP loan forgiveness, what are some of the barriers that they face that we may not anticipate. Ms. BILONICK. Absolutely. So I think one issue is just--and I don't think it is exclusive to the Latino community. I think for most individuals who applied, the process of forgiveness was kind of just a big question mark, so I don't think that anyone is opposed to relationship banking. In fact, I would say all CDFIs are heavily involved in relationship banking. That is the bread and butter of the CDFI industry. So I did take some exception to those comments. I think also I wanted to just raise that I think the community-based lenders and the mission-based lenders have opted into the portal because, unlike higher resource financial institutions, the portal that the SBA is providing is actually an improvement over whatever sort of internal either portal or other system, maybe even the less sophisticated systems, that was being used internally. So they are directing their clients almost exclusively to the portal because it is more straightforward, clearer, you know, just better overall versus what they could put together in-house. But, yes, these challenges are real. I think--you know, just to add one more thing, just the access to technology, I mean, in order to access the portal, you have to have a means of accessing it. One other thing that our CDFI Members reported was that it is very challenging to follow up with multiple clients. You know, I mentioned one of our Members made 500,000 PPP loans, so to individually follow up with each one of those borrowers would be impossible, and so if people change their phone numbers, close their business, or anything, you know, that is sort of really challenging to try and reach them and then connect them, you know, into the forgiveness process, period, let alone the portal. Ms. BOURDEAUX. I thought that was an interesting point about I think of the housekeepers, and the landscapers, and just a ton of this kind of very vibrant entrepreneurial economy that we have, but often are not in, sort of, the traditional path in these relationships. What can we do better in order to make sure that a lot of these small businesses know about the forgiveness program and, you know, are able to access this? Ms. BILONICK. Well, one thing I want to say prior to being in this role, I actually was the head of a CDFI that is based in Washington, D.C. So during the pandemic, I was in that role. And I think what was critical to the success of either rolling out programs or following through with them, as is happening right now in the forgiveness process, was the direct line of communication between the SBA and the lender. And, so, I think you see that most in the district offices where there is kind of a more direct relationship to the community. But I would just actually suggest that that continue, or, perhaps, that more resources be put behind that so that there is someone to call up when you have a question, and you are in a community-based organization it is just kind of a lot of red tape and paperwork that you may not be accustomed to working with. So, I think having that direct tie to the SBA, and from my experience in New York and D.C., the SBA district offices are really knowledgeable and approachable. And I just think that is sort of a great way to connect into the overall mission of the SBA. Ms. BOURDEAUX. Thank you so much. Ms. BILONICK. Thank you. Ms. BOURDEAUX. We work very closely with our SBA and SBDCs and groups like that to reach out to the broader community. Thanks so much. And I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentleman from Minnesota, Mr. Hagedorn, for 5 minutes. Mr. HAGEDORN. Thank you, Madam Chair. I would like to follow up on the presentation made by our Ranking Member Luetkemeyer, and also Congressman Williams of Texas. First of all, I think we are very fortunate to have someone like Congressman Luetkemeyer who understands the community banking business and that sector so well. And he has made some good points, that there isn't a lot of fraud, if any, with most of the community banks. And the banks that have made these loans, they know their customers, they are attentive to their customers, they are concerned about their communities and small businesses. This is a pretty good model of maybe something we stumbled into, but looking at, perhaps, utilizing this for other SBA loans could minimize the fraud that we have seen and help the taxpayers and help businesses. Second of all, Congressman Williams comes in and says, look, he has been in business for 50 years. He has interacted with both bankers in the private sector and then the SBA and others in government. There is a clear difference. I mean, one is attentive, one is trying to keep customers, one is trying to get business, and the other one is, well, if they get to it, they get to it. I mean, that is the way bureaucracies operate. The record of the SBA throughout this whole process was all good in some areas, but not so good in others. And I will tell you that the businesses and the banks that we talk to in this district, who have problems with SBA, they end up in our office. They end up with us calling SBA trying to get some resolution, trying to get people moving. And that really shouldn't be happening. The SBA should be handling these issues. Now I will give you my perspective, I was a congressional relations officer at Treasury for 18 years. I have seen the bureaucracy a little bit. And I think this move by the SBA to try to gain some control back of the PPP program when it was actually run very well through the banks might be some, you know, and effort to retain their turf. They see the writing on the wall that if we turn over the EIDL loans and others to the banks where we can minimize fraud and do better for our customers, they are going to lose some of their power. So I think that this may be not so much to help everybody, but just as a bureaucracy, looking out for itself. Now I would add, Madam Chair, I just want to do a couple of housekeeping items with you. When do you expect that we are going to get Secretary of Treasury Yellen to fulfill her duties and testify before our committee in person? Chairwoman VELAZQUEZ. We are working to get her to come as well as the Administrator to discuss the PPP forgiveness, but we are working on the reconciliation package right now. So, my guess is right after that, we are going to have the administration come in. Mr. HAGEDORN. Well, to your credit, I know you have said in the past and you joined with our Ranking Member that you had wished she had testified a little earlier. And, so, I appreciate you are going to continue to try to encourage her to come before us, so we can have a hearing. And secondly, and I know how important it is to forgive these loans and make sure small businesses can move on. Most of them have received these moneys and have utilized them, and have helped. But there are some small businesses still out there that this committee has an obligation to help. And they would, for instance, would be in the restaurant arena with the Restaurant Revitalization Fund. When the moneys were expended for that, almost $28.5 billion, they went to the people on a priority list that many of us viewed as discriminatory. And the people who are not on the priority list are sitting out there, well over 100,000 restaurant owners and they haven't received any money. And Congress hasn't done anything to follow that up to this point. Chairwoman VELAZQUEZ. I---- Mr. HAGEDORN. Well, if I could just say, I don't think that is fair, because people who are in the business are being helped, and other people who may be in trouble and needing help and going out of business are waiting. And I know the Ranking Member has a bill, I have cosponsored it, use reconstituted money, $60 billion. I think let's work together, please, and get the money to our restaurant owners. They really need it at this time. Chairwoman VELAZQUEZ. I wish--I hear you and many others express concerns about the fact that many underserved businesses and the very, very small businesses didn't get any access to PPP, even though they tried the hardest. I wish that you were out there compelling the big banks to provide access to those PPP. And, so---- Mr. HAGEDORN. I agree with you, Madam Chair. No, I agree with you. I am not a big fan of the big banks. And I think the one thing that has come out of the PPP program with underserved folks is they do now have a banking relationship with community banks and others. And they are in better position long-term in order to help their small businesses and to be successful. So for that, I think we should be---- Chairwoman VELAZQUEZ.--that the numbers were there for the world to see. Mr. HAGEDORN. Okay. All right. Thank you, Madam Chair. I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentlelady from California, Ms. Chu, for 5 minutes. Ms. CHU. Yes. Ms. Ward, you state in your testimony that three quarters of the PPP loans issued in 2020 included no demographic information. This is something I pushed hard to correct, and even most recently, sent a letter to the Biden administration asking them to look into racial disparities in PPP. And the lack of information caused the L.A. Times to publish a report where they looked at Census tracts in LA. And they found out that businesses in majority White neighborhoods received loans at twice the rate that majority Latino Census tracts received 1.5 times the rate of businesses in majority Black areas, and 1.2 times the rate in Asian areas. So, now we are in the forgiveness phase. So can you elaborate on why this kind of data transparency is necessary? And do you have recommendations on how to correct the data gap in the forgiveness process? If we don't have this kind of data, what do you feel businesses would stand to suffer? Ms. WARD. Thank you. I think SBA has taken steps to do a better job having lenders collect demographic data. And I think that is really critical and important, because then we can see what communities are being served by these programs, and where we as lenders, SBA, Congress, need to do more to make sure that these dollars are distributed fairly and forgiven fairly. I will say because of the crisis and the short time period to get a limited amount of funds, SBA was building this plane while it was already in the air. And there were constant changes, constant improvements made, constant clarifications, and that made it really hard for borrowers to keep up. But by and large, what we saw was an organization, an agency trying to get this product out as quickly as possible. I think they had this entirely new loan program available to small businesses within about 2 weeks of Congress passing this. That's unprecedented. So I really want to applaud SBA. With their resources, this became an overwhelming challenge. I am very happy to see that they have now been able to develop their own direct forgiveness portal, because there were lots of, especially the community lenders, and smaller lenders, CDFIs that did not have the resources to develop their own. And for those, SBA's direct portal is a significant improvement allowing a lot more borrowers quicker access to forgiveness. For lenders that had already created their portals like Self Help, like some of the other lenders here today, limiting borrowers options to get forgiven is not the right way to go. So while I applaud SBA for creating direct forgiveness, I think that will help get more of these loans through the forgiveness process, lenders that are doing a good job should be able to keep working with their borrowers. Ms. CHU. So Ms. Ward, but I was asking about demographic information. And so, you know, how can we correct this? And with the forgiveness portal, can we actually get that demographic information? Ms. WARD. Yes, I apologize. I didn't mean to get off track with your question. SBA has made changes to collect demographic information with the forgiveness process. So that is part of the information that SBA is trying to collect now on the forgiveness side that, in the early days and the loan application initially, those questions weren't asked and that makes it very hard to see where these funds were going. Ms. CHU. Let me ask about sole proprietors, and micro businesses and the unique challenges that they face. I want to make sure that they get the full benefit of the programs, since so many were devastated. Can you speak how the SBA direct forgiveness portal would benefit the sole proprietors specifically? Is the portal more accessible for them than the ones operated by their lenders or not? And which of your recommendations in your written testimony would be most helpful for those sole proprietors or these micro businesses to access forgiveness and relief? Ms. WARD. Well, I think in cases where sole proprietors have a lender that already has a portal or is already doing is good job processing forgiveness, that is probably their best place to keep going with the process. As you noted for sole proprietors, independent contractors, self-employed, the rules were pretty complex. And if you are a micro business, you are your accounting department, you are your legal team, you are your marketing team, and you are trying to run your business. So having your lender--if your lender is working with you, helping you understand these complex rules, as you are entering your forgiveness information--we think that is better. Now SBA's direct portal SBA does have people manning and FAQs. But the nitty-gritty and details, especially for the smallest borrowers, we still think that is pretty complicated. And I still think the lender should be helping their borrower as they enter it, so there is not a lot of back and forth afterwards. We just think that is a smoother process, and hopefully, we will speed forgiveness for these smallest borrowers, too. Ms. CHU. Thank you. I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentleman from Minnesota, Mr. Stauber. Mr. STAUBER. Thank you, Madam Chair. And thank you, Ranking Member Luetkemeyer, for holding this hearing. It is very important. And I will just say that one of the--I have really, really strong concerns about the leadership at the SBA under Administrator Guzman. I can tell you that when our small businesses get information stating that they should or better opt in, otherwise they are going to be subject to audits, et cetera, that is the heavy hand of the government that I will fight against tooth and nail. I know many of us on both sides of the aisle, that is not how we treat our small businesses that just coming out of COVID, just struggling to make it. And, so, I will just say that first, we can't rule, or have SBA and this administrator rule with a heavy hand. And I wanted to say, earlier we talked about the PPP and some banking, my comment is our local lending institutions did a tremendous job with very little information upon the distribution of the PPP loans. With very little information, they did it in a quick way. But I just want to publicly thank our lending institutions that helped so many businesses stay afloat and helped people keep their doors open during the COVID crisis. I will also say that Administrator Guzman who was in our great State of Minnesota at an event, and her partisanship showed very well. Myself and Congressman Hagedorn, we are both Members of this committee, weren't invited by her or any of her staff. And I will say that my staff, both in the district and in Washington, D.C. have been very, very concerned with the lack of effort and the lack of response that Administrator Guzman and her staff have given to us when we have requested information. Either they are late, slow or no response. And that is just simply unacceptable and the partisanship on her end must stop. Her actions speak loud and clear. I should say her partisan actions speak loud and clear. So my question, Mr. Fisher, what has communication from the SBA been like for the lenders? Has guidance been clear, especially as it relates to forgiveness? And have you had difficulty getting answers to any of your questions? Mr. Fisher. Mr. FISHER. It has been problematic throughout the whole process. And I don't want to--I mean, SBA did a good job building the system, as Ms. Ward said on the fly. We were basically flying from New York to L.A. building the plane as we were going. So I congratulate SBA on their efforts to put this all together. But it has been problematic getting answers from SBA. And that is why we have always felt it is important to be that buffer between the customer and SBA, because we can--we have relationships with people at SBA. And even having those relationships, it has been difficult to get clarity and answers on complicated questions. Mr. STAUBER. Thank you very much for that answer. And are you concerned with new SBA direct forgiveness portal? And if you are, when would you instead like to see moving forward? And how might Congress help? Mr. FISHER. I am not concerned with the portal. I think as far as having that portal, I think it is a great option for maybe some banks or other institutions that don't have a forgiveness method. But I think, don't force people's hand into utilizing the portal. I think having those relationships with the borrowers is really, I think--you know, we create that buffer and we can help with those complicated questions. And I think even Ms. Ward alluded to the fact that some of our smaller borrowers--I mean, our smallest loan was $430, but some of those are some of the more complicated questions that arise. And so, if we can help answer those questions based on relationships we have had for 40 years, that is what we try and do. Mr. STAUBER. Mr. Fisher, I appreciate those answers. And you are one of the institutions that helped keep our small businesses afloat. You know, as well as I do, 16, 17 months ago you didn't have the answers, and we didn't either, and so we were working through it. And our lending institutions across this nation deserve so much credit for helping us out, and helping get that capital where it was needed in a short period of time. So with that, as we move forward here, I think that we ought to make sure that--we always talk about the economic drivers in our communities are our small businesses. And we need to take care of our small businesses. As Mr. Fisher said, that--know the customer, that relationship building is extremely important to--having been in small business for 31 years, I understand that relationship with the banking and the bankers and the institutions are incredibly important. So with that, Madam Chair, I will yield back. Thank you. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Pennsylvania, Mr. Evans, for 5 minutes. Mr. EVANS. Thank you, Madam Chair. I understand--Ms. Ward, I understand your CDC works with many borrowers who may require extra assistance when applying for PPP loans. What kind of challenges are these borrowers facing during the forgiveness stage? Ms. WARD. Thank you. The biggest challenges we are seeing for our borrowers during forgiveness are borrowers who misunderstood the rules because they were changing rapidly at the time, and made good faith errors in calculating their loan amount. Borrowers were responsible for calculating their own loan amount and determining their own eligibility. And, so, we are seeing businesses that are--you know, they have spent these funds on their business with the understanding that this would be a grant. They made choices as to how they would keep employees staffed and paid based on the understanding that this was going to be a grant. You know, some tell us they wouldn't have taken it if they had known they would have to pay it back, because the last thing they need in an economic crisis is additional debt. So, we really strongly feel that these smallest businesses especially that are suffering from good faith errors, that they be allowed the forgiveness that was intended, that they relied on. We also think for businesses in this size range, these micro-businesses, loans up to about $25,000, by and large, especially for one-person businesses--they would qualify for full forgiveness. And having them go through the paperwork burden of applying for a separate application for a business that small is a significant burden, and we think automatic forgiveness for those loans would be appropriate. We absolutely do not think that SBA should stop investigating fraud, and doing automatic forgiveness would not remove SBA's ability to investigate red flags, and fraud, and go after anyone who has lied about having a business or created false documents to try and bump up their loan amount, those should be prosecuted. But giving automatic forgiveness and taking this extra burden off the smallest businesses would not prevent SBA from investigating those cases. Mr. EVANS. Let me follow up. What options exist for borrowers who PPP lending is not being responsive to forgiveness requests? What options would you say? Ms. WARD. So I think SBA should absolutely be monitoring lenders to make sure that they are processing forgiveness applications within a reasonable timeframe. Borrowers should not be left--the worst thing in the world for a small business is uncertainty. And if they are stuck not being able to apply for months on end, or they are under review for months on end at SBA, that uncertainty is keeping those borrowers from knowing whether they will be forgiven, whether they have funds that they can spend to invest in new employees, to expand in their communities. If they don't know yet if they are going to be forgiven, they cannot make those investments. It is critical that SBA focus its review on the larger and higher-risk issues when they are doing their manual reviews. Work on those so that those, too, can be processed more quickly, so that borrowers that applied in good faith are not penalized. For the smaller loans, the SBA has a series now of red flags, things that flag fraud for them that can help them go back and look at those small loans that need SBA review. Mr. EVANS. I thank you. I yield back, Madam Chair. Thank you very much for this hearing and this opportunity, Madam Chair. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Pennsylvania, Mr. Meuser. Mr. MEUSER. Thank you, Madam Chair Velazquez, and thank you, Ranking Member Luetkemeyer, that you to our testifiers. So, certainly, the PPP, I think we virtually all agree, saved livelihoods. It worked out well, certainly from my district throughout Pennsylvania, and the SBA staff in Pennsylvania was very helpful along the way. As a matter of fact, taking calls at 7:00 a.m. and sometimes 11:00 p.m. for a number of months there. And the SBA should be an advocate, I think, almost by definition, for small business. So the PPP was successful because it was created by the Trump administration Treasury Department, but was driven and administrated by the private sector, with the support of the SBA. So, you know, public-private partnership, if you will. And it certainly worked out well. Now, the EIDL loans, and I know that is a challenging subject to bring up was a very different story, and was, in fact, run exclusively by the SBA. So the SBA is serving as an advocate for small business. Wouldn't, then, the SBA have checked with the community banks beforehand before sending out such a letter? And basically mandating and strongly encouraging the use of this direct forgiveness portal? Mr. Fisher, were you or any of the community bank associations advised or asked for their input on the requirement to use a direct forgiveness portal? Mr. FISHER. No, we were not advised that this was going to be mandatory or pushed down on the banks. I mean, forgiveness has been going on since September of last year. Mr. MEUSER. Right, yeah. And this email was just received just this Monday morning, correct? Mr. FISHER. Correct. Mr. MEUSER. And did they explain at all why it was so important, that even though as we discussed, minimal fraud and problems, why this portal would be would be so necessary? Did they go over that with you? Mr. FISHER. They have not, no. Mr. MEUSER. And the letter, the email that came out for the direct forgiveness stating that many banks--it seemed that it was many, were managing their accounting and financials through 2022 as part of a better accounting plan for themselves. Is that something that has been discussed, or you think is a widespread issue? Mr. FISHER. Not with the community banks that I know. We all want to get those loans off of our books and get the loans forgiven for our customers. That has been our plan since day 1. This was always deemed a short-term solution to help or small businesses customers and help our communities survive. Mr. MEUSER. Right. And all of my community banks throughout my district, same thing. I mean, the needs of their customers certainly outweigh some, perhaps, improvement of accounting for 2022. So, back to this email. You know, just looking at it here, the audits, as you quoted, SBA warned avoid, that wasn't in the letter, but avoid lender audits--to avoid lender audits, we encourage the direct forgiveness portal being utilized. Maybe I am paraphrasing. It wasn't really written like a small business advocate. What was your thought? What were you and your colleague's thoughts when you received that language? Mr. FISHER. We hoped to have all of our loans forgiven from both rounds before the end of the year. So personally, I am not overly concerned about being audited. They are not going to find anything if they come in. But, I mean, nobody wants to get audited by the SBA. So I mean, it didn't sit well with me, especially because we had been working so hard on forgiveness for our customers. Mr. MEUSER. Yeah. Okay. No, I would agree if I think if I was sitting in your seat. I just think it is clear that the portal for direct forgiveness must remain an option with no perceived or implied penalties whatsoever, and certainly, we need to maintain a high level of integrity with the program. With that, Madam Chair, I yield back. Thank you. Chairwoman VELAZQUEZ. The gentlemen yields back. I don't think there are any other Members. Yes. Ms. HOULAHAN. Madam Chair, I am here, Rep Houlahan. Voice. Represent Tenney as well. Chairwoman VELAZQUEZ. Yes. I can see you. I recognize the gentlelady from Pennsylvania, Ms. Houlahan for 5 minutes for questions. Ms. HOULAHAN. Thank you, Madam Chair. And thank you very much to all of you for joining us today. I have just a couple of really quick questions, and my first one is to Ms. Ward. I understand that in your written testimony, you shared that there is a need to alleviate unnecessary paperwork burdens for the smallest of businesses. And you shared that the need should be expanded to simplify forgiveness applications for loans all the way up to and including 350K. Would you be able to speak a little bit more in this forum in depth about that, and why we might need to expand the simplified forgiveness applications for PPP from what exists now at 150K to 350K? Ms. WARD. Thank you. I think anything we can do to simplify the process for more small businesses is useful and helpful. I think expanding that up to 350 poses minimal additional risk to program funds, those loans are still reviewable, but it lessens the burden of submitting documentation, makes it more efficient because then all of that documentation does not have to be reviewed, and gone through, and back and forth with the lender and the borrower before it is even submitted to SBA. SBA maintains still the right on all loans to ask for underlying documentation if they choose. But bumping that up, we think, would just make this process easier for more businesses. We think that is appropriate. Automatic--sorry, go ahead. Ms. HOULAHAN. Do you have an appreciation, or an estimate, for how many of the total number of loans would then represent with 350K and below? Ms. WARD. I think--I shouldn't speak to one, because I probably don't have the right number in my head--I think if you go up to the 350,000 level, you are getting over 90 percent of our PPP loans that have been made through that more streamlined process. And that allows SBA's resources and lenders' resources to focus on the larger and higher-risk loans and make sure that those documentation, supporting invoices, supporting payroll documentation, is reviewed to protect these loans. Ms. HOULAHAN. Thank you so much, Ms. Ward. My final question was for Ms. Bilonick. I was also hoping that you would be able to elaborate and articulate on how the SBA can continue to improve the forgiveness process for those underserved borrowers, those specifically who may not have attorneys or accountants on staff to help them through that process. What else can the SBA be doing to be able to improve that process for them? Ms. BILONICK. Well, if I could give my wish, I would say that if there could be support for those organizations that are working with the small businesses and funneling them through the portal, I think most CDFIs and other small businesses using nonprofits in the communities that my organization represents, they are not just giving folks sort of, Here is the website for the portal. They are really walking through and providing hand- in-hand support to the borrowers to, you know, understand what is being asked, understand--you know, upload documents, all of that. So it is really not a hands-free kind of situation. So I think wherever resources could be put to support that extra labor, I think everyone has rolled up their sleeves during the pandemic to just do whatever it is that is necessary, but a lot of this work is not accounted for. And, you know, it is just kind of being provided without resources to back it up. So if there were anything like that. And then just to repeat my prior point, you know, the district offices being a lifeline for community-based organizations to ask questions, to funnel any doubts, it is just very, very helpful to have that direct person that is answering a phone, rather than looking at FAQs, because each loan is so particular. I think all of our lenders on the call would agree. And, so, it is really challenging to have straightforward rules that apply to every deal. And then, just really quickly, I just wanted to respond to the thing about the 350--raising it up to 350 would bring it up to 94.2 percent of all the PPP loans. So it is just an increase an increase, a bump-up of 7.7 percent. Ms. HOULAHAN. Thank you. I really approach that that. And with that, I yield back. Madam Chair. Chairwoman VELAZQUEZ. Thank you. The gentlelady yields back. Now we recognize the gentlelady from New York, Ms. Tenney, for 5 minutes for questions. Ms. TENNEY. Thank you, Madam Chair. And also thank you to Ranking Member Luetkemeyer. I just really appreciate your holding this important hearing on PPP. It has been a lifesaver for my community. A small business community is what drives the economy in my region. And we are so grateful that we were able to have that program, and how effectively it was done through our small community banks and credit unions. And I know that working with our credit unions and banks, as a former bank attorney, and also as a small business owner, how critically important it was for us to have access to these unfortunately dwindling number of community banks and credit unions that we can build our relationships with. And that is why I am very concerned about the letter that was received, somewhat threatening letter from SBA, to--the email, I should say, from SBA to lenders to avoid lender audits, encouraging them to move into the direct forgiveness program, instead of working through their own institution, where they have originated the loan, where they have actually had the community bank. They have had the community relationship with these particular lenders in a business community where they know what the risks are, they know what the community needs. And they also understand the businesses in the community. And my first question I would like to direct to Mr. Fisher. And I am so grateful that he is on, you know, a frequent guest and great expert on this issue. Also, our president of the Independent Community Bankers Association, so congratulations for that distinction as well. But, I know you have been asked this, but I want you to give us a little bit more of the real implications of this coercive letter, or email, that you received from SBA about encouraging your business customers and your businesses to move over to the SBA portal, as opposed to using your bank and your system as the forgiveness site, because I am concerned about some of the privacy concerns and the liability of the bank in giving up that information. Could you maybe address that, Mr. Fisher? Mr. FISHER. Yeah, I am not sure about the liability issue, but as far as just, you know, we have systems in place. We are actively working with all of our PPP customers pursuing forgiveness. We work with them. And back to one of the previous questions, you know, I think the easiest way to have customers, if they are having difficulty with PPP forgiveness, go to a community bank. We will gladly help you walk through the process. Even if it is not our loan, we will help figure it out for you so---- But being coerced to have to work it through a direct forgiveness portal with the SBA, I think that is problematic. I mean, they are not going to get the same level of service that they will get coming to my bank. I know that we know the customer. We live here. We work here. We work with them. And so, it is concerning that we are kind of being coerced to go down that path of sending our customers directly to SBA without having that interface that they can work through us and a get the solution through us. Ms. TENNEY. Yeah. And as fellow New Yorkers, I am always concerned about when the government is interfering in these relationships that banks have. And you describe so eloquently the importance of character lending and community banking relationships. And those have been vital to many in our community who rely on those dwindling number of community banks. But you provide such a great resource to so many, whether it is a farmer, or another kind of small business owner, restaurant, some of the not for-profit that you described that you were doing PPP loans with. Those businesses are vital. And you, as a Member of the community, understand that. It is not like they call an 1-800 line. And for a bureaucracy in Washington to interfere in that process, that concerns me. And I think the efficiency that you pointed out earlier in the PPP program of using our community lenders is really--is worthy of commendation. That is a good move. And also, less reliance on the bureaucrats in Washington, and more reliance on people that are closer to our community. I really appreciate those comments that you made. And I would also like to echo the comments of my colleague, Mr. Stauber, on--my staff and many of our constituents have come to us concerned about the problems they have had with SBA. So to me the fact that we have wonderful institutions, like community banks, community credit unions, that serve customers so directly, I think that is a huge win. And I just think it is a mistake that they are using any kind of coercive tactic. So I want to thank you for that. And thank you for also indicating that in your testimony, that you have zero fraud and 100 percent forgiveness rate and you are working through every one of these. So that is really important to know about the accountability aspect of this as well. I don't know how much time I have left, but I wanted to just get a quick question to Ms. Payne about the credit union aspect of this, and some of the direct consequences, or some of the experiences you have had on the credit union side. If you can quickly tell me that, because I think I am running out of time. Ms. PAYNE. Well, I would like to, then, quickly maybe, share a direct quote from one of our Members who was recently forgiven. And this is from an email. ``Hopefully, you are able to hear our screams of delight. Thank you so much. This is an enormous relief. Please let everyone there know how important this is to us. Affinity's communication systems responsiveness and empathy during really trying times was second to none. You guys rock.'' That is a relationship. And that is the critical piece here. Ms. TENNEY. Yeah. Thank you so much. That is fantastic. And I don't mean to disrespect there are many great people that work for SBA, but who are on the ground with customers and you are relationship building, you depend on these people and they depend on you. And I think that the last thing we need is Washington bureaucrats to interfere with that. And I do think that this is a lit bit of mission creep for the SBA to move away from their job of helping small businesses to get into a banking relationship, and interfering in that important relationship with our small businesses community. And I have heard the same. I think this is a great program. And to end it, interfering in that ability to forgive these loans, which was intended as a grant program, as Mr. Fisher referred to in his testimony, it would be a mistake. And I think that going down the path of accountability, particularly with people like the small business--small community banks, small community credit unions, you have something at stake, you have skin in the game. And I think that is why you are so good at doing this. And that is why I think the program was so successful. I want to thank all of the witnesses and everyone. This is really important. I hope you will continue it work hard on these issues and help our small business community. We are really grateful to you. And thank you very much, Madam Chair, and Ranking Member Luetkemeyer. I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we now recognizes the gentleman from Minnesota, Mr. Phillips, for 5 minutes. Mr. PHILLIPS. Thank you, Madam Chair. And greetings to my colleagues and to our witnesses. Gratitude for you all being with us. My question is about the bank fees relative to the PPP program. And the Washington Center for Equitable Growth indicated that banks reaped about $18 billion in fees that were associated with processing PPP loan applications. And I would like to hear from you, whichever of our witnesses want to begin, to help describe the bank fee structure that was implemented through PPP to provide the incentives to issue the loans, and whether you think that in part, at least, it explains why some of the largest lenders were reluctant to push forgiveness through using the SBA's direct forgiveness portal? Any thoughts from any of our witnesses on that subject? Ms. WARD. I am happy to take the first slab to try and answer that. So first, I would say, I am not aware, and would be surprised to see that there are lenders trying to delay the process for purposes of when their fees are booked. I have not heard that and that would surprise me. If that is happening, SBA should be applying significant pressure on those lenders. That would just be unacceptable. The fee structure that was put in place, really, initially, I think Congress made an effort to ensure that even the smallest businesses had access to PPP, but because Congress structured it with a larger percentage fee on the smallest loans. Unfortunately, even a larger percentage fee on a $5,000 loan does not give the lender the reimbursement for the resources they used to do that loan. So lenders that were able to do large PPP loans were able to generate large enough fees to offset their costs. Lenders like community lenders, CDFIs, a lot of the lenders that worked primarily with the smallest businesses and micro businesses, probably did not receive enough fee income to cover their costs, depending on the volume that they did. Self-Help among CDFIs is a little unique in that we were able to work with over 70 percent of our loans were to those smallest borrowers, under $50,000. Our median loan size was just with over $20,000. But we also, because we were helping some of the nonprofits serving the community, we were helping some larger employers keep their employees on staff. We were able to do some of those larger loans to help offset costs. But we had real concerns about the fee structure for community lenders and CDFIs that were working almost exclusively on those tiny loans, and Congress did address that when it brought out the 2021 PPP---- Mr. PHILLIPS. Right. Ms. WARD.--by putting in a minimum fee amount for those lenders so they could cover costs. Mr. PHILLIPS. I appreciate that. Ms. Payne, Ms. Bilonick, any perspectives on the same question you want to share? Ms. PAYNE. I would like to add that going into this in the environment that we were in with the pandemic, I don't know that, for us, it was really member-based. We needed to help our Members. The fee structure was basically secondary. We needed to get through this, and we needed to get through it together, and this is what we needed to do for our member base. Mr. PHILLIPS. I appreciate that. Before my time expires, I know that a number of borrowers were contacted by their bank saying that they received more than their allowable funding, and are responsible to pay it back, of course, despite having, in many cases, used the money for forgivable expenses. So at what stage do you think it would have been appropriate for that to be communicated to borrowers and by whom? Do you think it is the lender's job or the SBA? Any thoughts on that subject? Ms. PAYNE. I can jump in to try to answer that. I don't know with the ever-evolving guidance and such what might have been a good time. It is hard to say. Mr. PHILLIPS. Yeah. Ms. PAYNE. But I do think from the beginning, the message to these borrowers was, if you use it the right way, you will be forgiven. And I think that is the message that, you know, that so many of us heard as the borrowers did. Mr. PHILLIPS. Right. Ms. PAYNE. This was temporary. I think it depends for us, we are happy to give that message when it does happen, if there was partial forgiveness or something otherwise. We are happy to give that because we have the relationship and can fully explain it to our borrowers so that they understand, and then hopefully help them with any other needs that they may have going forward with that. Mr. PHILLIPS. Hear, hear. With that, I yield back. And I thank you all again for being with us today. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from New York, Mr. Garbarino, for 5 minutes. Mr. GARBARINO. Thank you, Chairwoman. And thank you to the Ranking Member for having this hearing as well. Thank you to the witnesses that are here today. I have appreciated your testimony so far. I want to start with Mr. Fisher, because it is sort of a follow up to what him and Ms. Tenney were talking about and how you have been dealing with customers looking for forgiveness and your Members have dealt with them all the way up through the processing application and whatnot. Have you come across any small business customers that have not opted to seek forgiveness? Mr. FISHER. We have had some customers that are slow to seek forgiveness. But, you know, no, they all want to get forgiven. It is just, some are quicker to try and apply for it than others. Mr. GARBARINO. Is that the same instance for you, too, as well, Ms. Payne, with your Members? Ms. PAYNE. We have seen some, not many at all. Several of our borrowers have opted not to apply for forgiveness. The only input that we have heard from them is that they felt that they did not spend the money fully in line with the PPP guidance, and that is all I can really say on that. Mr. GARBARINO. They don't think they qualify for forgiveness? Okay. All right. Thank you. Mr. Fisher, back to you. How much staff have you dedicated to PPP, as well as how much staff do you have dedicated working on PPP forgiveness? Mr. FISHER. Initially it was kind of all hands on deck. We probably--I mean, I have 100 FTEs at the bank, a little less than that. But we probably had 20 people that were working around the clock, weekends, trying to get PPP applications into the SBA. The forgiveness phase we have automated some of that. So we are really using about three people, two to three people to handle the forgiveness phase. And it has been very efficient and pretty effective for us. Mr. GARBARINO. And Ms. Payne, your organization? Ms. PAYNE. It is going to sound very similar. It was all hands on deck as well. And we actually brought on three temporary employees to help us through the PPP forgiveness process. And it has been working very well for us. And we have automated our platform as well. Mr. GARBARINO. Okay. And finally, I guess what--PPP was big in getting funding out the door when it was first going. That was a big question to employers, how they are going to keep open and PPP was a big help. For many of the witnesses, Ms. Payne, Mr. Fisher, anyone, what are you hearing specifically now? Now that the PPP programs--what concerns are you hearing from small businesses now? Mr. FISHER. I think the big concern right now is what is going to happen with this next wave, if it is going to lead to shutdowns. We are seeing mask mandates for schools and things like that. So I still think there is a lot of uncertainty with business, which is always problematic, so. Mr. GARBARINO. Uncertainty over the regulations on how to handle it if there is another--I don't think there will be, but if there is another shutdown? Mr. FISHER. Correct. Yeah. Ms. BILONICK. I was just going to add that from our perspective there is lot concern around workforce. So there is just not available workforce for a lot of industries that were hardest hit, and that are now trying to reopen and reboot. And that is just something that is coming up very frequently. Mr. GARBARINO. I have heard that a lot from every industry I think, from construction, to restaurants, manufacturing, to retail. Everybody is having trouble right now finding workforce. But as for programs, like PPP, is there something we could do better next time, you know, if there is another shutdown? Like, what should we address on how this program ran out, or how we ran this program compared to what we should have done? Like, what can we do better? For anybody? Ms. WARD. I would say we at least have a template now, even if this exact same program was put in place, there is lot more clarity. That is a huge improvement. One of the biggest challenges was that almost daily, changes came through during the duration of this program, and it really made it impossible for borrowers to know whether they were eligible or how much they were eligible for. So that would be an improvement. The funds could be--there could be other ways to deliver these funds to borrowers. I think, by and large, banks, big banks, community banks, CDFIs, even fintechs getting in got these funds out to a lot more borrowers, and allowed these funds to be funneled through a lot of sources so that more money could get out the door as quickly as possible to these businesses that needed it to survive. Having clarity in the rules from the beginning, and having clear steps for forgiveness, delivering on that promise, taking away that uncertainty as to whether you are going to get these funds forgiven, or whether you suddenly have unexpected debt after you kept your staff on, those are the things that I think could be addressed to help more businesses if we, you know, hopefully don't, but if we ever had to go through something like this again. Mr. GARBARINO. Thank you. My time is up. So I yield back. Thank you, Chairwoman. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentlelady from California, Mrs. Kim for 5 minutes. Ms. YOUNG KIM. Thank you. Thank you, Chairwoman and Ranking Member. I also want to thank the witnesses for being with us today. You have heard a lot from my colleagues about the PPP has been tremendous assistance in allowing small business owners. And in my district also, it has been a lifeline for them to weather the economic downturn caused by the COVID-19 pandemic and unprecedented lockdowns. We are talking about now the next phase of PPP forgiveness, you know. The massive effort of distributing close to 12 million PPP loans and sustaining close to 50 million jobs could not have been possible without our partners, like the banks and credit unions. So I want to thank them and the partnership they have had with you guys. But I was troubled to hear SBA was threatening--excuse me. I was really troubled to hear that SBA was threatening lenders to opt into the direct forgiveness program to avoid audits by the Office of Credit Risk Management. SBA later clarified that audits would focus on lenders that have yet to accept forgiveness for 2021 PPP borrowers, or those that are not actively reaching out, the damage has been done. And SBA must be careful not to vilify lenders moving forward. And I also must stress that whether a bank or any other lending institution, obscene or not with the SBA's forgiveness quota has no bearing a borrower's opportunity to get their PPP loan forgiven. You know, many banks and lenders have already set up their own forgiveness platforms that are complementary to SBA and having really highly efficient. So let me ask you, Mr. Fisher, I agree with your testimony that the SBA should not force lenders to opt into the direct forgiveness portal. And with the high number of review requests from the SBA which requires lenders to put resources aside to provide documentation, what should we expect if SBA decides to proceed with audit on lenders on top of all these review requests? And how is that going to divert your attention in serving your customers properly? Mr. FISHER. It just diverts resources away from my mission of serving our local community and our customers in helping small business. If I am trying to provide documents and trying to deal with auditors from SBA, it just becomes problematic for us. Ms. YOUNG KIM. Sure. You know, Mr. Fisher, you also said in your testimony, you mention SBA's lending programs like the 7(a) and 504, they rely on bank underwriting and the expertise that lenders bring to the table. So can you explain to our committee what would change if SBA moved in the direction of direct-to-borrower programs at the SBA? Mr. FISHER. I just--obviously, if you leave the bank out of it, you are subject to potentially more fraud. I think that has been brought up that the EIDL advances saw substantially more fraud in direct loans to SBA than the bank loans. So, I think looking at it from the standpoint of trying to reduce fraud, I think utilize your existing framework of community banks and banks to continue that lending through the S-7(a) program and 504 programs, and even PPP was very successful, and I think limited fraud by utilizing the banking framework that we have. Ms. YOUNG KIM. Well, thank you very much. I mean, I think the biggest concern that we have is the impact. And we want to make sure there was a prevention of waste, fraud, and abuse with those programs. One more question. And I would like to direct this to Ms. Payne. Why do you believe that forgiveness review process by the SBA is challenging and time consuming? Are there certain steps that add extra days to the review? Ms. PAYNE. When a loan goes on to--into loan review, it is a time-consuming process because it is not typically that we have that the lender has a direct communication with the SBA representative. It is basically an email is sent out, sometimes can be fairly vague, and then we are asking for additional documentation. Sometimes it is already been uploaded and they are repeating ourselves, sometimes we have to then reach out to the borrowers to get additional information, not always understanding what that is going to go do for the loan itself, in terms of the forgiveness review. So it does add days. It also add frustration, and confusion, and stress for the borrower in terms for the fear about why am I under review. So there are a lot of factors. It does add time. And it can add other things, stress that a small-business owner does not need at this time. Ms. YOUNG KIM. I have one other question to ask, but I think my time is up so I will yield my time back. Thank you. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentlelady from Texas, Ms. Van Duyne. Ms. VAN DUYNE. Thank you very much, Chairwoman Velazquez and Ranking Member Luetkemeyer for holding this hearing today. As the driving force behind our economy, you know, an employer of nearly half of all American workers, the success of small businesses is critical to each of our communities. And this is no more apparent than during the pandemic. While government shutdowns forced many businesses closed, the Paycheck Protection Program delivered the emergency capital that small businesses needed to be able to keep their doors open. After providing almost $1 trillion to small businesses, we are finally nearing completion of the program. As this massive relief program shuts down, we must continue to push for more rigorous oversight to protect American taxpayers. I want to echo Congressman Hagedorn's request and express my disappointment that we are discussing complex policies yet again without an SBA representative present. There are questions that Members of this committee have that can only be answered by those actually running the program. So I hope we can have someone from SBA in front of the committee very, very soon. That being said, I want to thank the witnesses that we do have here today. Mr. Fisher, I appreciate all the work that you do in upstate New York. I think I actually used to have an account with your bank when I was up in college in Ithaca. So I know it is raining there today, but now is when I want to be there, because I am in Dallas, Texas, and it has been 100 degrees here today. So enjoy your summers and your falls because winter is coming soon. But I do have a question for you. Despite many circumstantial setbacks and concerning amounts of fraud, the PPP program successfully kept small businesses afloat during the pandemic. So as we look ahead to preparing for the next major disaster, these problems are not unique to just PPP. And I know Congressman Garbarino had also asked a similar question. I am going to change it a little bit. How can we improve the PPP model to disperse the quickest aid, but also minimize fraud? Mr. FISHER. I guess I would suggest not trying to go direct to the borrower. I think utilizing the network of banks that participated, utilizing banks that have a long history of 7(a) lending is definitely probably the way to go, because we have relationships with those businesses. We know the businesses, because it is down the street. I drive by it every day, versus somebody who is just, you know, seeing it in application, either on paper or virtually, trying to make that decision. I think we can be a great mutual aid to help get those dollars out and also curb fraud. Ms. VAN DUYNE. That is good to know. Ms. Bilonick, in your testimony, you state that in 2019, before the pandemic hit, that Latino-owned businesses had hit a record-breaking strive with their average annual revenue increasing 10 percent to over $525,000 per year. This is impressive, and it is the exact type of growth strategy I think that we are looking for in the business environment and we need to get back to that. What would you attribute that success to back in 2019? Ms. BILONICK. I think the success was reflecting the scaling of Latino-owned small businesses, so businesses that may have started 5 to 10 years ago that were going to the next level, expanding, adding additional locations, adding additional personnel. And, unfortunately, the pandemic is a setback, but I do think that we can harness that, you know, sort of growth mentality and perseverance moving forward, and it hopefully will just be a hiccup in the story of our entrepreneurship story. Ms. VAN DUYNE. Were there any particular policies that you think that helped back in 2019 that we should either try to strengthen or, you know, bring back? Ms. BILONICK. I don't know that I would point to a particular policy. I am not sure. I think--I really do think it was sort of was just maturity of the businesses that had taken off at that point. But I am open to suggestions of what policies you may be referring to. Ms. VAN DUYNE. Well, I don't know. I mean, maybe tax cuts. I mean, were you looking at any other tax cuts in the Tax Cuts and Jobs Act, for example? Did that strengthen? Did that help? I mean, I know that right now we have got from the Biden administration a number of financial policies that are coming down that are talking about increasing taxes, you know, gut inflation, so in backing away on some of the policies that I think really helped grow the economy and were very positive, beneficial to small businesses, and I am just wondering if you are seeing the same thing. Ms. BILONICK. I don't know that I would attribute it to that. I would say that I am not opposed to taxing those larger businesses. I think a business that is making under a million dollars is certainly not, you know, going to be targeted in that segment. Ms. VAN DUYNE. No. But I am talking about specifically small businesses. Right? Ms. BILONICK. Well, these are, I guess--would be probably a threat closer as a microbusiness in the $250 to $500 thousand range. Ms. VAN DUYNE. Well, I thank you. I yield back my time. Thank you. Chairwoman VELAZQUEZ. The gentlelady yields. Now we recognize the gentleman from Florida Mr. Donalds for 5 minutes. Mr. DONALDS. Thank you, Madam Chair, and thank you to the Ranking Member for holding this hearing. I have got to tell you, I think SBA getting involved, as involved as they are trying to be with this forgiveness process and, frankly, you know, threatening community banks from doing what they kind of already been said to do I think is outrageous. It is outrageously wrong. You know, in a prior life, I was a credit underwriter at a community bank. I had to deal with SBA when we were doing joint credit with them. And, to be frank, SBA would be late to the table often with respect to their lending decisions. We already knew it was good credit. It just took forever to deal with SBA. So for them to try and come in now and, in some respects, completely take over the forgiveness process, to me it just doesn't make much sense at all. So, I guess, my question, my first question is to Mr. Fisher. Mr. Fisher, you are going through the process of forgiveness. What kind of data are you actually looking at in order to clear [cut out] forgiveness? Mr. FISHER. We just make sure that it is a valid, you know, loan. We validated all the customers at the front end, so the forgiveness, we just have to ensure that they have all of the documentation required by SBA, and it goes through--we have an automated system that it goes through and submits directly to SBA, and we typically--right now we are getting forgiveness back very quickly from SBA, so it is a pretty smooth process for us right now. Mr. DONALDS. Okay. And, Ms. Ward, my question for you is, what different or what value added is SBA bringing to the forgiveness process as to why they should be involved in it? Ms. WARD. Well, I think the value SBA is adding is, in creating this Direct Forgiveness Portal, they are giving an easier, more efficient online access for some PPP borrowers that may not be getting that from their lenders, and in that case that is incredibly valuable. I am really happy to see that they have created the portal to fill that gap. I agree, though, for lenders that have already created their portal or lenders that are efficiently processing PPP forgiveness, they should be allowed to keep using their own systems. I think SBA's direct portal should expand access to forgiveness and not limit different ways that borrowers can get forgiven. I have worked as an SBA lender for over 15 years. I have worked with SBA on micro loans, 7(a) loans, 504 loans, and now PPP loans, and SBA works best, in my opinion, when it works in partnership with the lenders. Each has a role, and SBA can have drastically more impact working through the lending community. That needs to be expanded, more community lenders, credit unions, CDFIs, mission-oriented lenders that are making sure to hit underserved borrowers, but that is where I think SBA provides an incredible and unique service and much needed loans. These SBA loans of all types are part of why the U.S. has such a vibrant small business economy. Mr. DONALDS. Ms. Ward, as a follow-up to that, I mean, like I say, somebody who has been in the community, actually done credit underwriting, with the amount of loans in the system, how would SBA actually go about dealing with loans that there might be early indications are fraudulent or that dollars were spent and maybe not in line with the PPP program and, as such, those dollars--a portion of those dollars or those dollars overall would not be forgivable, how would SBA deal with that? Ms. WARD. So what we've seen that process include since the program got rolled out, I think initially in the speed to get these dollars out, a lot of the normal safeguards---- Mr. DONALDS. No. Ms. Ward, I have to reclaim my time real quick. I understand what you are saying about what happened on loans from now going forward. What, frankly, special mechanism is SBA going to do if they see early warnings that there was, not so much even just fraudulent, but a misapplication of funds where those funds are now no longer subject to forgiveness under the various--and I know there have been a couple iterations of PPP. But what if those dollars were spent and none of those iterations that were allowable for forgiveness, what is SBA going to do? What would it ordinarily do to ensure those dollars are repaid to the taxpayer? [Audio cut out on his question] Ms. WARD. So all of these go through SBA for the final determination. The bank, the community bank, or the lender submits our recommendation per SBA based on does this loan qualify for forgiveness or partial forgiveness, and then SBA bases its forgiveness on that. SBA also has the right to review those and ask for additional documentation. And so they will keep doing that same thing. They will continue to review and make sure that forgiveness is appropriate. If the funds were not spent for the intended purposes, the business should be paying them back. The use was to keep your business operating and keep your staff employed. Businesses that didn't do that knew going in and should be held accountable for paying that back. Mr. DONALDS. Well, Ms. Ward, thank you for that. I know I am over my time. Madam Chairwoman, thank you so much more the indulgence, and I yield back. Chairwoman VELAZQUEZ. Thank you. The gentleman yields back. Let me thank all of the witnesses for being here today. Your testimony has shown the progress we have made in forgiving PPP loans and also the challenges that small businesses still have---- Mr. LUETKEMEYER. Madam Chair, we have got one more witness--one more Member. Mr. Fitzgerald from Wisconsin is still on. Chairwoman VELAZQUEZ. Well, he has his camera off and---- Mr. LUETKEMEYER. No. He is on. Chairwoman VELAZQUEZ.--he has had his camera off throughout the hearing. Mr. FITZGERALD. Madam Chair, I am not sure if I--I just have a quick one if I could sneak in. Chairwoman VELAZQUEZ. Sure. But we have always said that while you are in a hearing to please to keep the video on. So, sir, you are recognized now for 5 minutes. Mr. FITZGERALD. All right. And thank you, thank you. Just real quick, and I don't want to be redundant. I know that the hearing has gone on. So to Mr. Fisher and probably to Ms. Payne, there is kind of this--these stories that have been swirling for some time now that there was kind of this cottage industry that was created basically because PPP loans were available. There were accounting firms, as well as law firms, that were starting to market, if you will--and I am trying to keep this at a 30,000- foot level--market the idea that, hey, if you want to apply for a PPP loan, don't worry about it, we will take care of the paperwork. This is what you are eligible for. And then once the PPP loan was granted, then on the back end, you know, there would be legal fees that were charged for some of these or, certainly with some of the CPA firms, you know, there was billings that were done on the back end. And I bring this up--and like I said, I am trying to keep this--I am not necessarily making the accusation, but it is out there. It is very much out there. And I would just say, this is one of the problems I think with just loan forgiveness is you, once again, take down one of the hurdles that, you know, otherwise legitimate businesses would look at and say, well, wait a minute, if I have got to pay this back in the end, no, I am not going to take that $25,000 loan. I am not going to take it because it is going to be a burden on me later. But if I know that it is going to be forgiven anyways, sure, what the heck, you know, let's make this arrangement now with a law firm or CPA firm. And, you know, suddenly you find yourself in a bad spot. And I am just worried that this cottage industry was created and that, you know, if we don't try and keep this in check, it could go wild. And I wonder if you have any comments on that, if you saw any of this type of practice going on. You know, in my mind, you know, it sounds like criminal activity but very hard to define and very hard to delve out. Mr. Fisher and Ms. Payne, I would ask either one of you who had direct involvement with these loans to just--have you seen anything like this? Mr. FISHER. You know, we did have, you know, accounting firms and lawyers that were working with customers, but they were all customers that were known to us. We actually brought in I think 40 percent of the first round of SBA--or PPP loans were new customers to our bank; but most of those were not necessarily referrals from attorneys or accounting firms. They were, you know, the borrowers coming to us directly. I think there was--we had a couple of accounting firms that maybe referred a deal over, and I think they thought they were entitled to some of the fee that was being generated from the PPP loan, but we didn't have any type of an agreement signed with them for, you know, sharing those fees. So we didn't really see anything that you are talking about as far as fraudulent or, you know, the type of activity that I think you are talking about, I haven't seen it, so, I don't know---- Ms. PAYNE. And I would add, we really didn't see any of that, and we didn't have anything from accountants or anything of that nature. We talked more to accountants more on the forgiveness end of things than the early stages because of the complexity sometimes of the documentation that they had to provide for forgiveness. But we didn't really see anything of what you are speaking to. We didn't have any familiarity with that. Mr. FITZGERALD. Ms. Ward, are you aware of anything along those lines? Ms. WARD. We really didn't see that in our PPP lending either. We saw a lot of technical assistance being provided by accounting firms and small business technical assistance providers. Third-party payroll processing companies we saw step up and provide reports for their customers to help them calculate the loan amount. We saw a lot of different industries really doing what I think all of you and all of we and, you know, all of these businesses did, it was all hands on deck. I am--I suspect you are right that there are organizations that took advantage of that fear and that desperation, and to the extent they can be found out and held accountable for that, I would applaud that; but most of what we saw, fortunately, was organizations trying very hard to help the businesses and the nonprofits in their communities keep their doors open. Chairwoman VELAZQUEZ. The gentleman's time has expired. Mr. FITZGERALD. Madam Chair, I am just worried--yes, Madam Chair, I think this is something we have got to be aware of, and I appreciate the time. Chairwoman VELAZQUEZ. Thank you. Again, thank you to all of our witnesses for being here today. As I mentioned before, your testimony has shown the progress we have made in forgiving PPP loans and also the challenges that small businesses still face. While the small business economy has made tremendous progress toward recovery over the past 17 months, we are entering another precarious state with the spread of the Delta variant. For small businesses that struggled for over a year, even minor setbacks can instill monumental trouble. That is why our committee must work to ensure that small businesses can achieve maximum loan forgiveness. This hearing has provided significant insight into the obstacles that PPP borrowers still face. I look forward to working as a committee to achieve policy solutions that ensure entrepreneurs obtain the forgiveness they are entitled to. I would ask unanimous consent that Members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. If there is no further business to come before the committee, we are adjourned. Thank you. [Whereupon, at 3:15 p.m., the committee adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]