Portman, Cardin, Lankford & Booker Statement on Administration's Updated Rules on PPP Eligibility for Small Business Owners with Previous Criminal Records

Press Release

U.S. Senators Rob Portman (R-OH), Ben Cardin (D-MD), James Lankford (R-OK), and Cory Booker (D-NJ) released the following statement after the U.S. Small Business Administration (SBA) and the Treasury Department announced updated rules with regard to past criminal justice involvement and eligibility for the Paycheck Protection Program (PPP). The new rule reduces the timeframe for the exclusion of justice-involved small business owners in the PPP from five years to one year for felonies that do not involve fraud, bribery, embezzlement, or a false statement in a loan or federal assistance application. In addition, following last Wednesday's Small Business Committee hearing, the agencies also made modifications to ensure that owners who had participated in a pretrial diversion program would be eligible for PPP loans. They do not, however, fix a major flaw within the old rules that penalizes those who have yet to have their day in court.

On June 4, the four senators introduced the bipartisan Paycheck Protection Program Second Chance Act, which would remove barriers to PPP for owners with unrelated felony records while preserving the presumption of innocence and keeping in place the five year timeframe for felony crimes related to financial fraud. This legislation follows Senators Portman and Cardin's letter to Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza urging that the SBA allow small business owners with criminal records to apply for the PPP. National and Ohioan reentry and second chance coalition leaders, law enforcement, and local officials have voiced their support of the initiative.

"We appreciate the Administration's willingness to engage with us on this issue, and we welcome this Interim Final Rule to remove some barriers to PPP loans for entrepreneurs who have been involved with the justice system," the senators said. "We remain concerned that individuals who have not yet had their day in court will still be prevented from securing a PPP loan, which violates a core tenet of our society: the presumption of innocence. We further want to reiterate that it is inappropriate to exclude from the PPP any entrepreneur who has a prior felony unrelated to a financial crime. We will continue working with the Administration to ensure that small business owners and their employees are not unjustly prevented from securing these job-saving loans."