Membersre are reminded there expect to do it here the standing rules including the call when youre participating in any remote event. With that said, 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 video connections that 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, when they are recognized for their questioning i will move to the next available member of the same party and will recognizel that member, and will recognize that member at the next appropriate time slot provided they have returned to the proceeding. Should a members of time the 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 a fit of witness loses connectivity during testimony or questioning i would preserve their time as fast address the technical issues. I may need to recess the meeting to reconnect. Finally, remember to remain muted until you are recognized to minimize background noise. Your accordance with the Rule Comstat has 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 ask, and seek recognition at the appropriate 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. He more than 800 billion dollars 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 save millions of businesses from permanent closure. With conditions improving from the lows of the pandemic, its vital that this Committee Turn to what may be the most important part of the program, the federal governments promise that these loans can be forgiven and converted into grants. Ppp guidelines stipulated that sba forgive loans if small businesses spend funds on Meeting Payroll costs and other related expenses. Sba has already received 5. 6 million Loan Forgiveness requests and made over 5. 2 million forgiveness payments. This means that approximately 46 of all Ppp Loans have received payments. These statistics represent progress, but they also show that there is a long way to go. Unexpected debt can hinder a small Employers Recovery and cloud its path to future growth. So we must examine the obstacles preventing recipients from Loan Forgiveness and work to alleviate them. I look forward to discussing how sba is working to make Ppp Forgiveness as simple as possible and examining solutions to maximize total Loan Forgiveness, especially for smalldollar borrowers. I now would like to yield to the ranking member mr. Luetkemeyer for his opening statement. Thank you, Madam Chair and thank you for calling this very important hearing on Paycheck Protection Program, Loan Forgiveness and the process. With the Programs Application now closed members of congress must examine the back End Process that focuses on forgiveness to ensure the program concludes appropriately, prudently and smoothly for small businesses. Prior to the pandemic small businesses were displaying optimism and confidence about their economic future. Through a smart Tax Environment driven by the 2017 Tax Cuts and jobs act and former president trumps deregulatory actions such as cutting regulations for every new one, these small investing inre their companies, their employees and their communities. Unfortunately covid19 and overwhelming state and local shutdown mandates devastated the nations smallest firms. For being close entirely to capacity restrictions these measures for small businesses in survival mode. Not surprisingly many small businesses adapted to the best of the building under dire circumstances. Thats what they do. Federal government systems like the ppp provide an added toward Recovery And Focus efforts on the nations more than 16 million smallbusiness workers and employees. The ppp proved to be successful during the effort of privatesector lenders who partnered with small Business Administration and the department of the treasurynt to deliver funds to small businesses with speed and efficiency. As the program continued to shift towards forgiveness, Todays Hearing will show a completely different perspective from lenders who participated in the program. If a small business adhere to the rules set out in guidance produced by sba and the Treasury Department Comesh forgiveness should be attainable. Congress examined this process in 2020 and create a streamlined streamlined Forgiveness Process for all loans below 150,000, and a December Covid package. The sba has also taken steps to simplify the process to that end. Examining the new direct process it is come to my attention that lenders have received multiple messages which could be considered a threat from the sba of potential for enhanced Lindner Audit based on their participation within the direct Forgiveness Process or if they have not offered 2021 ppp borrowers an opportunity to move through Loan Forgiveness. One thing is clear, there are multiple legitimate and prudent reasons why lenders have enjoyed the sbas new direct Forgiveness Portal including the fact that some lenders have had systems and portals up and running for months. I cannot stress enough this next region which is many lenders would like to assist their small business borrowers to the completion of this program. I will not stand by and have lenders were punished for working closely with their small business borrowers, their dismal Performance And Attempt at direct lending too the Eidl Program should provide a warning to everybody at the sba is still suck to perform any of these tasks. I will continue to watch these developments closely. At Todays Hearing a look for caring more about the relationship between Sba And Privatesector lenders. As an open line of communication and where should improvements be made going forward. Additionally i am also concerned about changes to the Forgiveness Process that could open the program to increased levels of waste, fraud, and abuse. Ranging Blanket Forgiveness has the potential to move safeguards in place to ensure american protected. Llars are ppp Loan Forgiveness oversight is even more important considering recent reports indicating certain fintech lenders have been connected to many of the programs most problematic loans. These are significant issues that a plan to continue to monitor closely. As members of congress, we must not ignore the barriers be enacted that will prevent Smallbusiness 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 corporate and individual levels. The elimination of steppedup Basis Slew of other harmful changes, these tax changes and implication for all smallbusiness and farms. Our nation small businesses are facing worker shortages andag skyrocketing inflation which we should be creating a private to create jobs, expand and grow, not perpetuate an event at the requires him to scale back. Thank all the witnesses for joining us today and look for tour discussion. Madam chair, with back. Thank you, mr. Luetkemeyer. The gentleman yields back. I would like to take mom to explain how the student will proceed. Each witness with five minutes to provide a statement and each Committee Member will have five minutes for questions. Please ensure that your microphone is on when youre speaking and then you return to mute when finished. With that i would like to introduce our witnesses. Our first witness is ms. Tracey ward, the director of selfhelp Ventures Fund 504 five 04 N Program was led the way for cdfi in helping very small borrowers access the ppp program. In 2020 and 2021 selfhelp 2008 and Ppp Loans totaling 253 million in covid19 funding. 65 of the ppp borrowers were small businesses and nonprofits led by people of color. Selfhelp was created for responsible lending, a national nonprofit on Policy Organization dedicated to protecting Homeownership And Family wealth of working to eliminate thank you for joining us today, ms. Ward. Our second witness is ms. Leslie payne, affinity federal Credit Union and basking ridge, new jersey. Ms. Pain is the assistant Vice President for commercial lending and is been personally involved in the Credit Unions Ppp Lending. The Credit Union has sba direct Forgiveness Platform so we look forward to hearing about her members experience. Today she is testifying on behalf of of the national association of federally insured Credit Unions. Thank you for joining used toda, ms. Pain. Our third witness is ms. Marla blahnik, President And Ceo of the national association for latino Community Asset builders, or nalcab. Nalcab is a nationwide network of over 130 organizations that are anchore institutions in the latino communities. Ms. Bilonick brings over 20 years of expertise in the small Business Development and community based financial services with emphasis on u. S. Latino population. Ms. Bilonick testified before the committee last congress on issues related to underserved Business Development, so it is my pleasure to welcome her back to the committee. The ranking member mr. Luetkemeyer will now introduce our final witness. Thank you, Madam Chair for our next witness is mr. Roberts fisher. Mr. Fisher is the present and chief executive office of Tioga State Bank located in spencer New York. In addition to his Leadership Role mr. Fisher is currently the chairman of independent committee Bankers Association of america, also known as icba. He is a fifth generation to the maker and also graduate University Notre Dame and trended air forceai veteran. Mr. Fisher want to thank you for taking time away from running to bank to join us today and at to thank you for your service to our nation. Also what you think the other witness of the joint s and look for to the questions. Thank you for doing all you can while we are in this Pandemic Era here and the timely 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 we need to be addressing. Thank you very much and Madam Chair, i yield back. Thank you all for being here today. Ms. Ward, you are recognized for five minutes. Thank you, chairw. My name is tracy ward and i represent selfhelp, Unity Development institutions. Thank you for the opportunity to provide testimony today. At the start of the pandemic, gave it we came together to create these programs, delivering urgent loans to small businesses. Ppp being a forgiven loan with explicit promise that if they are spent properly, they will not be repaid. We are asking for several fixes to Ppp Forgiveness to ensure that things can be cap that promise can be kept. This program was remarkable he fast. It had a costly Changing Set of rules and congress laced a burden of understanding these rules on small Business Owners. Quite a challenge for those scrambling to access loans from them. As a result, the result of a smalls and says are not getting that honest forgiveness, even when we have spent every penny properly. For example, a contractor in illinois received a loan of just under 20,000. Two days for he applied, fda issued a rule effective immediately that they could document cannot document the request so it is not forgivable. Even though he completed his application and seven it properly. Instead of being able to recover, he is be held back by an unexpected 20,000 debt trap. Congress and fda have recognized some of the challenges faced by the smallest businesses and these loans. One significant change was earlier this year when there were calculations of these issues. Proprietors, and different contractors and selfemployed individuals. The smallest of the small. That change does not apply retroactively to allow thousands of businesses ever have relief. One such difference is childcare in which received only 2700 and 50 in ppp funding. Had this change been retroactive, she would have been eligible for an additional 14,000 to support her operations. This is the same change for small farmers and ranchers and others like childcare. It is important to remember that these challenges are exacerbated for small businesses. They have an overwhelming amount that it entered the Pandemic Credit and with limited access to mainstream banking services to the structural problems that a been well documented i our affiliates and others. There are several clear fixes to the forgiveness rose to ensure fairness and to avoid any other problems for these instances and are able to sustain it. One, eliminate denial of Loan Forgiveness due to sudden changes to the rule without notice. Number two, rescind the january 15, 22 on will denying forgiveness to borrowers who made good faith errors. Forgive them for having portal problems. It should extend the options for forgiveness and not limit it. Number four, alleviate any unnecessary paperwork for the smallest businesses by automatically forgiving loans of 25,000 or less. They should overwhelmingly qualify for full forgiveness based oN Program rules. Finally, improve and refocus fdas long overdue process to ensure that fraudulent activity is prosecuted and businesses apply in good faith are not dealing with uncertainty. In this ongoing crisis, small businesses deserve as possible fall through on their promises they can get back to businesses. Without changes, Forgiveness Stage of ppp will exacerbate preexisting inequities and affect the smallest businesses and turn congresss promise into a bait and switch. Thank you for addressing this important issue and i look forward to your questions. Thank you. You are recognized for five minutes. Good Afternoon Chairwoman and ranking members and members of the committee. I am testifying today on their behalf. Over the last 18 months, weve had the ppp initiative opportunity. Im proud of the work we have done to help our members in these challenging times and i think you opportunity to your before you today to discuss the Ppp Forgiveness process. Weve been going above and beyond to make sure they are taken care of during the pandemic. Many Credit Unions sign on as lenders despite never having done so before. The data shows good data loans are not enough, much slower than he national average. Unity provided 1500 Ppp Loans in the first round of the Ppp Lending. An overall average, Ppp Average at 56,000 with a small percentage a large percentage was 100,000 or less are. Our smallest was 700 and the largest loan was 1. 7 million. In the complexity of this process whose challenges for small businesses who may not have the staff to perform the application process. We are pleased to see congress enact a simple Fight Process for this. However, pricing has grappling with the cost of processing loans and forgiveness and following the leads of their members. Many Credit Unions have invested money to create a solution for members, the complete online application and supporting documentation for the first line first party members. I understand there is frustration for this have been ongoing. Additional documentation for application is under review. Even for small borrowers. Almost 80 of our Ppp Loan has been forgiven it has taken on average nine days from application to fda approval. We applications have them placed under review has been taken an average of 47 days. Fdas reintroduction of this will expedite the Forgiveness Process. They also recently had the direct are portal. Despite money invested in this process over last year, we are like many Credit Unions that have not been able to get into the portal. It does not necessarily streamline the process for lenders. Many have to monitor the system and update their commercial lending programs manually. Small Credit Incident have the ability to help out in this process, there is a solution to this Forgiveness Application. Despite many opting into the portal, credit units are beneficial from the onset of this process. Moreover, and to gain the new portal can be burdensome. Theres also concerned that the fda will not answer questions in eight timely fashion it will be difficult to get answers and eight timely manner last year and come back to this question. With Lenders Control over the system and not be able to assist. I can see these types of frustration in this process. There communicate directly with borrowers and those who apply directly for forgiveness. Here steps they can take to improve the process. Increasing the size of the Portal And Revenue reduction floor. Urging the fda to follow their commitment to focus their views on larger and highrisk loans. This will conserve their resources and allow the agency to more efficiently allocate their resources to those loans without additional review. We are proud of how we have been able to help our members stay afloat through the ppp. Like a Credit Union, our priority is our members. We remain committed to helping them out successfully. I think you for this opportunity and i welcome any questions that you may have heard , thank you. You have heard. Good afternoon. I am the President And Ceo of the national association for latino Community Asset elders. It is my sincere honor to address you today about these programs forgiveness. Speaking on behalf of this, our orientation and the small businesses that they represent, we are the hub of a national network of over 140 Mission Driven Organizations that will anchor institutions in geographically and ethnically diverse latino areas of the country. Well scale the flow of capital that meets the needs of the committees we serve. It will help to deploy capital. We know that the strength of the u. S. A Spending Power and leadership. While the latino committee is often heralded for starting small since his ways higher than other ethnic groups, the average has been disproportionally impacted Latino Business folders. The Entrepreneurship Institute surveyed that 87 of Latino Businesses suffered negative in that. They were successful at securing Ppp Loans at half the rate of their white counterparts and only 3 receive their full funding. We will provide help to their lending help. In our own right, we learned our members up to 12 million which resulted in them making many loans to small businesses in their communities. This included many heavy hitters. They were able to provide business clients with Ppp Loans when banks could not in fact, they had the third highest Bp Lender in the nation. Theyre averaging around 15,000 each for a total of post eight billion dollars in Ppp Lending. J. P. Morgan and chase topped the rankings. Half of the borrowers have been paid back. This includes the g July Launch of the portal which is a simplified clearing out of Forgiveness Applications attached to loans of one of 150,000 and below. This is not the primary channel for their work in seeking Loan Forgiveness for their small business clients. Between april and august, they process has doubled from the number in april. This may be partially tribute to the direct Forgiveness Portal. The report that they are in direct compliance to the portal and it is a straightforward avenue for achieving forgiveness. Some are missing out on forgiveness due to lack of awareness of the Program Or Lack of access to connect to the portal. The members we spoke to coasttocoast ported it was their primary channel for forgiveness. Even in cases where they have their own portal technology for the portal. While only a sliver of them made loans over five figures, we are supportive of this Forgiveness Process up to 350,000. This will further ease the burden on even more small businesses theyre doing their best to power through recovery. In addition, it will lighten the administered load of lendersmare initial stages of the Paycheck Protection Program, there was confusion that have resulted in good faith errors that generated tpp loans that exceeded the maximum amount. In january of 2021, they informed that members of the excess Loan Amount errors. Particularly in cases of small Loan Amounts, this feels like undue efforts to squeeze dollars from what it was designed for. They used every cent of their Ppp Loans to ensure their businesses stayed afloat. Mr. Fisher, you are now recognized for five minutes. Ranking member, and members of the committee, i am bob fisher, President And Ceo with the state bank, a 550 million Community Bank and spencer, New York and chairman of the independent community Bankers Association of america. Thank you for the opportunity to testify at todays herring hearing. The ppp was a natural fit for the Business Model of Community Banks. We are small Business Lending Specialist with knowledge in the deeper communities we serve. It is typical of the Community Bank. We made a total of 929 loans for 64. 48 million dollars, saving roughly 10,000 jobs. Our average loan was just under 70,000, the state banks 40 Year History as a lender helps us to navigate challenging fda channels on behalf of our borrowers. Our largest Ppp Loan, 2. 7 million was to a southern to your independent center. We are a large nonfor profit and picking tim, New York, dedicated to helping people with disabilities remain independent. It helped prevent staff layoffs and provided critical services in our community. Community banks have similar stories and results, aggregate Community Banks and made nearly 60 of the Ppp Loans, which supported nearly 50 million jobs. The Community Banks made over 80 of Ppp Loans to minority owned and womenowned small businesses in nearly 70 of the Ppp Loans to veterans owned small businesses. Im proud that my Industry Septa stepped up to support their survival of these businesses in a time of crisis. We are well into the Forgiveness Phase of the program, 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 in congress for its role in making statutory changes and advocating for a streamlined process. 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 Application 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 they are a technical or communication problems, then this is 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 ego eager of borrowers to obtain full forgiveness. They insist that they expect the choice to not use the portal. Instead they have threatened to audit these lenders. They suggest lenders are deliberately delaying forgiveness to spread out the income. That practice would be unacceptable and 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 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, think Underwriting And Servicing is what makes Fda Lending Program so effective and must not be displaced by direct programs. As we conclude the ppp, reports of fraud have surfaced in the media. These problems must be reduced to the greatest extent possible. Not only in the ppp but all sba programs. My bank has experienced no Ppp Fraud and one forgiveness. Ike other Community Banks, we own the consequences of our lending decisions and underwrite with great care. 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 incidence of fraud. As normalcy returns, the fda should proceed with great caution as it considers changes to existing programs. Many Community Banks highly value robust and sustainable program. Fraud puts all programs at risk. Thank you again for convening Todays Hearing and for the opportunity to offer my perspective, and im happy to answer any questions you may have. Thank you. Thank you, mr. Fisher, and thanks to all the witnesses for being here in your work on engagement in the ppp. I will begin by recognizing myself for five minutes. Less then one quarter of all ppp lenders have opted into the sba direct Forgiveness Platform even though your Credit Union invested in its own platform, you also opted into the sba platform. Can you share with us any feedback your borrowers have had on the platform . Thank you for the question. We have opted in. We have a system in place that has been working quite well. We jumped on forgiveness early in the process and put things in place that we needed to do. We opted in because we wanted to give our borrowers every opportunity of forgiveness. Today, we have seen approximately 12 of our borrowers go to the direct place. They are directly going to our portal for forgiveness. What we have heard from our members is that, from their perspective the portal has been userfriendly. From a Lenders Perspective this creates a more manual topic. We have to proactively go into the portal and check the website. And manually we are inputting data in the beginning of the process as well as at the end of the process. Another concern that we had is we are still in the early stages and have confusion in the communication. We will get that from the fda. 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 profits were spent on unforgivable profits . We have seen many borrowers that are facing issues where they applied based on the current roles in place and because the rules were complicated, some businesses were able to include Owner Health Care costs. Some could document payroll. Others had different methods that could be more complicated. So we are seeing borrowers that are caught in the issue of having applied in good faith for a loan that they used to keep their Business Operating, to keep their staff employed, and now with forgiveness, they are not going to be able to get forgiveness. How is how is your institution handling in good faith errors . We are working with our borrowers and locally we are not funding situations like this within our own ppp borrowers. We have processes in place and have worked closely. We have the relationship and we have worked hard with our borrowers to make sure they understand the loans they are getting in understanding their forgiveness. We are seeing reports about those who are caught in this and will not be able to get forgiveness. We have been on a couple of cases where we have borrowers in the situation where we are working with them to identify other potential documents they have that might give them full forgiveness. Thank you. Any comments on the Ppp Miscalculations . I think there are several loans. With the initial Ppp Guidance it was continuously evolving. Both the members and lenders were trying to get their eyes their self around the rolls. I think each should be looked at. If there was an error that was made in good faith, the use of it was permitted and i believe it should be there for full forgiveness. Would you support increasing the qualifying Loan Amount to 350,000 to help deliver forgiveness more efficiently and enable more small businesses to focus on the recovery. I think anything that will reduce on the lenders and borrowers is a positive and should be supported. This would bring the percent over 90 of Ppp Loans. But i think its a sound recommendation. My time has now expired and the ranking member is now recognized. Thank you, Madam Chair. Just a comment, whenever you see that, basically, loans that are remained in one out of 10 we are looking at is fraudulent, and most of those loans are under 350,000, i think the Ig Report said that half the loans under 350 are probably where your theft, Identity Theft and fraud are. For us not to look at those is that the administration having leaving 38 billion in military equipment behind in afghanistan. This is nuts for us not to go after people who have intentionally gained the system and are getting away with dollars that taxpayers have paid in and half of them were not be looked at. I think this is a wrong way to approach this. Mr. Fisher, you talked about, and your testimony, something that is very concerning to me. With regards to the sba and their threats to audit entities, banks, Credit Unions, other entities, they dont participate in the portal, what is your experience with this, or have you heard about this . I know you said in your testimony about this. Would you like to elaborate a little bit . We received communication on monday that there was a potential for an audit if you did not participate in the Forgiveness Portal. And from day one we decided we will didnt want to say say. It is a confusing and complicated process. We feel that we get the expertise, the customer doesnt. We want to control that relationship and help our customers navigate through this whole Forgiveness Process. And we dont feel we should be we worked forgiveness very hard and we only have five loans from the first round that are still waiting for forgiveness. Its not for a lack of effort. We have been reaching out to those borrowers to get them to apply for forgiveness. What is the choice on your part with how you want to approach forgiveness and into making the choice there choice . Thats how it feels. 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 at my office, we want to followup and hold them accountable for statements like this. This cannot go unchallenged and cannot be allowed to happen. Please work with us if you see this happening within the banking community. Thank you so much for that. You make some great statements as you were going through and discussing the banks making the loans. The banks have something for the customer. In doing that, we found that as i mentioned earlier, they dont have that fire all there. In they are really the ones causing a lot of problems. Although there has been a lot of problems with ppp, the underwriting that you are able to provide an for your customer that seems to be a key would be to minimize the fraud, minimize the abuse, and set you up for being able to get forgiveness for your customers because we have done it right, would you agree . Mr. Fisher we know our community and our customers and i think thats wait thats what made it work for Community Banks and why we were able to do 60 of Ppp Lending. Its concerning to me that as we continue to go through this process, and we are looking at and i dont want to bring the program into the ppp unnecessarily, but the ppp program, they will do the underwriting and do the hard work and prepare the loans to be able to be approved show that thats for being able to do things the right way and minimize fraud abuse. When you look at the idle program and how the fraud is, it really sets up the contrast of this it needs to be in the lending business. Would you like to address that question . We already felt that Community Banks and we had that relationship with our borrowers and we think it reduces fraud. The experience is zero fraud in our Ppp Lending and i think that shows how Relationship Banking works and how utilizing Community Banks to be the interface with small business is so effective. Thank you very much for your testimony, we certainly appreciate your thoughts and observations. With that, i yelled back. The gentleman yields back in my recognize the gentleman from maryland. Thank you, Madam Chair, take you for calling this hearing. I would like to 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 f das . We are considering that there was no platform the sba was offering or putting out there. The process was technically the start almost immediately because our first Forgiveness Application in september of 2020 was there, so we needed to put something in place. And we did the program. We trained our staff and we wanted to be there. This was a temporary loan to help them get through a very chaotic and traumatic time. And they needed to know that this was going to be forgiven. So so many wanted to give an estimate if they possibly could so we responded to our members need and thats what we did. We initiated our own platform and invested the time and the money to be able to do that and be responsive. Most of your Credit Union members have you as your platform rather than the sbas platform. How would you evaluate the rowers outcomes . Are they comparable, and are there things that jump out at you that are cause for alarm . We have not had so much cause for alarm. The process was slow as we were learning it and we did not anticipate the loans going under review. When we started they were taking 10 of our loans and putting them under review. In it is time consuming for our members, its stressful, they are not sure why they are under review, and we dont know if its random or otherwise. But in that sense, once we got up and running, and not seeing any major issues, it could be very timeconsuming, but for my testimony, we submitted our portfolio and had gone through their Review Process. There are some that have partial forgiveness, but has had a very good Success Rate on behalf of our members. If i could turn to you for just a moment, you occupy a rather unique perch both as president of Tioga And Chairman of the independent Community Bankers of america. So far, only about a quarter of all pp lenders have opted into the direct Forgiveness Platform. Do you think, sir, or what do you think could have been done differently to make that platform more appealing to persons . Lets hope we never go through this again, but if we were s. If he were to go s through something like this again would you recognize pretty. I think that the issue is that most banks have the Forgiveness Plan in Place And Weve already developed systems and we have a methodology of how we could have them through forgiveness of the fda rolling this out late in the game is made it problematic so i think that t they wanted this to be used, i think it wouldve rolled out when forgiveness started pretty satellite is currently the game to try and another system when we are ready have it pretty down. I have no other questions. Gentlemen from texas mr. Williams is recognized for five minutes. Thank you before i get started, i want to remember those 13 families that are praying for from the a loss of those young men and women and also remember those people still stranded in afghanistan this morning. Im a small Business Owner and have been for 51 years my whole life has been dealing with Credit Unions and Community Banks and i can tell you that mainstream american does heckuva lot better than federalfe want to saynd i thank you to all of the lenders forgetting his this program out and its interesting that all of a sudden the sba must get involved in this program and the portals and so forth know we have to have a hearing. So just in the government or the private sector does it better than the government so when i talk to the borrowers and lenders a constantly hear about communicationbo issues with the Sba And Lender as we told me that there have been submitted for forgiveness as far back as january we are hearing that this morning that it isas received an update after eight months. When the bank calls the Ppe Hotline for updates, its no longer even inservice in Inrv E Fda cannot continue to leave small Business Owners and Community Banks in the dark when they are taking on the necessary steps to recover from the pandemic. The small Business Owners and so mr. Fisher thank you for your service and what you are doing and wanted to say can you discuss your interactions with the sba and describe how responsive they been to your inquiries. Communications throughout the Process Hasnq been difficult especially early on in the process we get some great connections with our local sba and those who have served have greatly helpful but also limited in some of the knowledge they have and obviously this a new program. There are constant guidance changes in things like that so the communication was very problematic throughout the process continues to be somewhat of a problematic in certain areas and i know of a local Bank Adjuster to Story Yesterday that they had opted out of the Forgiveness Portal yet their customers all received notices from the fda saying that you can through the portal which was not active for the big because they had not opted into the program which cause chaos on their Customer Service centers. Soso we are hearing stories like this oliver and i can tell you firsthand, it is tough to communicate with him and lenders were given two options for ppe Loan Forgiveness either direct forgiveness of the Fda Or opt out and continue to process loans and cells were hearing about that Today Grady was calmly the bankers did not opt into the Directnl Ppe forgivenes for two main reasons and lenders had already printed internal process which we know that and contract his work at third party with a soft the Forgiveness Aspect within the future. And in addition as wetu have hed today many banks were reluctant to opt in because the fda had not been the n most reliable partner in the past. That is an understatement and forcefully on Monday Morning, as we were the sba said they would be under intense and here they are coming in late and missing every thing out predict soap making this change so late in the process has caused confusion even more headaches for the banks to make the ppe so successful so mr. Fishery you tested on this but i think that we can talk about this more, can you discuss the risk due to the recent announcement from the sba and why you choose and chose to opt out for the direct Ppe Forgiveness in the first place. Obviously the city for a friend and potential audits. And they sent e an email the sd that we would be audited but im not sure which or what to believe. I think the reason we opted out is because we are relationship lenders. We want to be that interface between the lender and the under and on because of the complicated process and we want to make sure the customers are getting the Crest Information that they dont have to pull through the entire process, we know what wee been through it we work with sba for 40 years so we want to be that Interface And Relationship that we have with both the sbawe customer. We want to enhance that pretty. With a heavyhanded government is no good were saying that hear firsthand pretty quickly can you elaborate on thee importance of Relationship Banking for Ppe Forgiveness and how more Government Involvement may draw out this process. It. Relationship banking is the key our Community Banks and how we interact with our customers and i think that really cuts down on fraud. As i said previously, ive had general fraud of most of the bank that i know have had general fraud. So think of fraud and having his relationships is critical. Will thank you for that and the government cannot say that so thank you for what youre doing and i take my time and i yield back. I recognized the Congress Lady from georgia. But i just would like to also say to mr. Fisher, when we have this money and went out, where in two weeks it was all gone that we did not get from the administration shows that many small businesses in underserved communities and we own small businesses they were not able to access any Ppm Money because they didnt have preexisting relationship with the banks. They didnt land to the small businesses. It was not until we intervened we demanded on the secretary of the treasury to set aside money for bank lenders that that data and those numbers didnt change. So is true now with the great work that the sba is doing and informing small businesses and what they need to do in order to fill out the forms and take every step to be able to for the loans to be forgiven. You are recognized for five minutes and thank you. Thank you and have a similar line of questioning to some of the points that you raise. I think you ranking member for holding the steering rated this access to ppe Loan Forgiveness is something ive been concerned about. When i was born into congress in particular i heard a lot about discrepancies and Loan Forgiveness in underserved small businesses critically minority on businesses in my community and we did some informal surveys of who had gotten Loan Forgiveness and whowh have not d found it not only the minority businesses didnt know how to followup read i think the testimony raises some of these unanticipated problems that often occur with some of these very entrepreneurial and vibrant businesses just dont have that traditional relationship with lender. In this one of the reasons i work with the committee to submit emotional abuse to the american Rescue Plan encouraging small Business Administration to work to make sure equitable is Emergency Assistance including ppe Loan Forgiveness. The Fda Think is an important step to create greater access by opening their portals and revive forgiveness into loans less than 150,000. And as is been discussed in this hearing, there is a lot of creating some tradeoff. And just to start off, can you just talk a little bit more, you orhave raised some of the kind f i did not know kind of issues that come up with some businesses in the hispanic community. When they are trying to approach working towards ppe Loan Forgiveness and water and some of the barriers they face may not anticipate. Absolutely so i think one issue and i dont think this is specific to the latino community. For most of the individuals of the for the process of forgiveness was kind of just a bit . I dont thinki that anyone is opposed to a relationship in fact i would say that their heavily involved in Relationship Banking freighted and thats how it is by industry so you see discussions and i think also that i want to race that i think thee communitybased letter hae opted into the portal because unlike higher financial institutions, the portal that the fda is providing is actually an improvement over whatever internal portals or other systems may be even the other systems, that would be used internally so they are directing almost exclusively to this because it is more straightforward and for clear had just better overall versus what the put together in the house. These challenges are real and add one more thing, the technology. In order to access the panel, one other thing that are members reported was very challenging was multiple clients. I mentioned one of our members made hundred thousand thousand Ppe Phone so that didnt really follow up with each one of those and so, for people change their phone numbers are closer businesses or anything, that was challenging to reach them. Also during this forgiveness loan process. Is an interesting point. They do have skewers landscapers and the side of very vibrant entrepreneurial economy that we have that often are not in the traditional path of these relationships. What can we do better in order to make sure that a lot of these hesmall businesses know about te Forgiveness Program and are able to access it pretty. One thing that i want to say, prior to be in this role i was one of the advisors so during the pandemic, i think what was critical is that rolling out the programs and what is happening right now in this process present direct line of communication between the fda and the lender. So i think that you can go to the offices for their more direct they ship to the committee but it was actually suggesting god continually. [inaudible]. So that there is some of the followup when you have a question and where youre in a community and the community and got a lot of people use to working with so i think having thatha direct contact from my experience. In these offices there knowledgeable reversible they just think that is a great way to connect into the overall missions. Thank you so much. And work working with the fda and the sba the groups like that to reach out to the communities. It and i yield back. Pretty. And we recognize the next person for five minutes pretty. Thank you i like to followup on presentation made by ranking member and also the congressmana williams of texas and first of all, i think that we are very fortunate to have somebody like the Congressman Look Meyer who understand the Community Banking business in that sector so well is making a good point that there is a lot of fraud into any or with most of the Community Banks and the banks that have made these loans and the other customers. Theyre concerned about the communities in small Businesses Breeze pretty good model of something maybe we stumbled into. And these loans, and minimizing the fraud that we have seen and help the taxpayers and help businesses. And he said look, hes been in business for 50 years pretty is interacting with most of the bankers. In the private sector. And there is a clear difference printed but as trying to keep the customers and one is trying to get the business and the other one as well that they get to it, they get to it pretty to me the bureaucracies operated. In the record of the sba throughout this process, good in some areas but not too good in others and tell you that the businesses in the bank we talked to his history to have problems with the fda, the end up in our office for the end up with us following sba trying to get resolution to getting people moving. That really should not be happening for the fda to be handling these issues. Probably myy perspective. For 18 years. It seemed bureaucracy little bit. I thinknd this made by the Fda O try to gain some Control Back of the Ppe Program is actually run well through banks and might be some effort to retain the turf. They see the writing on the wall but if they turn over the idol loans and the others to make can minimize fraud and do better for our customers that they are going to lose some of their power. Lets Help Everybody but is looking out for itself is a bureaucracy. Now i would add i would add that i just want to do a couple of housekeeping and keeping items with you. Many would expect that we will get the Secretary Treasury yellens to fulfill her duties and testify before Thefo Commite in person. We are working through this as well as the administrator back to discuss the ppe for business. And we are working on the package right now so i suggest right after that that we will have the administration. To your credit, i know you have said inn the Past And Joind our ranking members that you admit you had testified earlier i so appreciate your continuing to try to encourage to come before us so that we can have a hearing pretty and secondly, i know how important it is to forgive these loans to make sure businesses can move on and most of them have received these monies and utilize them and have helped but there are some small businesses still out there but this committee has an obligation to help. And for instance be in the Restaurant Arena with the Revitalization Fund when the monies were expended for that, almost 28 and a half billion dollars, they went to the people in Priority List many of us viewed it as a discriminatory and the people not on the prioritye list, are sitting out there well over 100,000 restaurant owners and they have not received any Money And Congress is not done anything to follow that up rated to this point and that is not, if i may just say, i dont think that is fair because people in the business of being helped another people maybe in trouble and needing help in going out of business are waiting. And the ranking member has a bill, i cosponsored it. This reconstituted money, 60 billion. I think lets work together please if we can i get money to our restaurant owners. They really needed at this time. I wish in many at peak you have expressed concerns about the factei that many many underserved businesses and the very small business of giving access to the ppe, even though they tried and of wasted out there comparing the big banks to provide access to those ppes and so i agree with you chair and i am not a big fan of the big banks and i think the one thing that has come out of the Ppe Program was underserved folks is that they do in a Banking Relationship with Community Banks and others in a better position longterm in order to help small businesses. And to be successful and for that i think you pretty. The numbers were there. Okay thank you it and i yield back. And now we recognize the gentle lady from the next person for five minutes. It. So ms. Warren, you say in your testimony that reporters of the ppe loans issued in 2020, included no demographic information. This is something that i pushed hard to correct and even most recently sent a letter to the biden administration asking them to look into the interracial disparities in the ppe and the lack of information and publishing a report where they looked at this in la they found out that businesses in the majority white Neighborhoods Pc gloves at twice the rate cut Majority Latino have received 1. 5 times the rate of businesses in the majority of black areas and 1. 2 times the rate in asian areas. So now we are in the Forgiveness Phase read so can you elaborate on why this kind of Data Transparency is necessary do you have recommendations on how to correct the Data Gap in the Forgiveness Process. If we do not have this kind of data, what you feel have businesses would stand to suffer. I think the fda has taken steps to better resolve this data and i thank you so critical because then we can see is being served by these programs and where we as women in Congress Need to make sure that these dollars are distributed fairly and forgiven fairly. And i will say because of the crisis and the short time. Its to get a limited amount of funds, the fda could explain why and there were constant changes and constant improvements made constant clarifications. That made a really hard for us to keep up but by and large, what we saw was agency trying to get thiss product out as quickly as possible and they have this entire program available to small businesses. In about two weeks of congress passing this. I really want to resolve it today. The report said this became an overwhelming challenge and i am very happy to see that they have now developing their own direct Forgiveness Program because especially small lenders and others that they did not have the resources to develop their own. In the fda is a significant improvement in a lot more access forgiven. [inaudible]. And they had already created this like some of the other Lenders Today for the help. And these options to get forgiven is not the right way to go party and creating this direct Forgiveness And Help get these loans through the front and the Forgiveness Process. [inaudible]. And they should be able to keep working with their benefits pretty. So i was asking about the information and so how can we correct this. And with the Forgiveness Portal, can we get that information on the demographics pretty. I apologize. I didnt mean to get off track with depression, the fda is collecting the demographic information and Forgiveness Process. Thatrg was part of the informatn the fda is trying to give in the Forgiveness Side that the Loan Application initially. [inaudible]. And is hard to see where these funds are going to. Let me ask himim on the slope of preorders, and the unique challenges they face no one actually get the fullss benefitf the program. Seventy were devastated. And can you speak to have the fda direct Forgiveness Portal for than consult proprietor specifically, spark accessible to them than the ones on the lenders orr not and which of yor recommendations in your written testimony would be most helpful for those sole proprietors these micro businesses to access forgiveness. Something in cases were sole proprietors are running of w the portal are already doing the Processing Forgiveness is probably the best place to keep going with the process. And as you noted, the sole proprietors the contractors, is complex and heco apply for business, you are your legal team, you arere your Marketing Team and youre trying to run your business. And having your lender if your when lender is working with you to understand thisu complex ros and your forgiveness information. The fdas direct portals they have people manning this and in the faqs. The details especially forn the small businesses. We still think that is pretty complicated pretty the lender should be helping as they enter it so theres not a lot of backandforth afterwords. And regarding forgiveness for the small loans. Thank you and i yield back. The gentle lady yields back now we recognize the gentleman from minnesota. Thank you chair and ranking members for holding this very important meeting. I would live just like to say that in the past we really have strong concerns about the leadership at the sba and the administrator. I can tell you that very small businesses do information to say that they should have had better options than otherwise theyre going to be subject to audits predict that is a heavy hand that they government that i will fight against Tooth And Nail may know that many of us on both sides of the aisle, that is not help we treatar our small businesses o, they just strugglg to make it. So i would just say that we cant have the sba in this Administrator Rule of the heavy hand. I wanted to say earlier we talked about banking and my comment is are the institutions they did a tremendous job. In the distribution of the ppe loans. They had very little information in the data in a quick way but i just want to publicly think these institutions that helped so many businesses help people to keep their doors open during the Covid19 Crisis and i would also say to the administrator, and the great state of minnesota, in any Event And Partisanship showed very well read myself and members of this committee, we werent invited by her or any of her staff and i will say that my staff both in the district and in Washington Dc have been very concerned with the lack of Effort And Lack of response that the administrator and her staff have given to us when we have requested information. Theres a slow plate or no response that is simply unacceptable in the partisanship on her and. In her actions speak loud and clear rated i should say her partisan action speak loud and clear. Mr. Fisher,tionn what is communication from the sba toni the lenders has the heguidance been clear especially as it relates to forgiveness. Have you had difficulties in getting answers to your questions. Mr. Fisher. Is been problematic throughout the whole process and i dont want to while, i mean, the sba did a good job building a system. And we were basically flying from New York to la building the plane as we are going so i congratulate the fda in their efforts to put this all together. But it has been problematic getting answers from them and that is why weve always felt its important to beel that bufr to any customers and sta because we have relationships from the people at the sba and even having those relationships, has been difficult to get clarity and answers on the complicated questions. Thank you very much for the answer and are you concerned with the sba direct Forgiveness Portal and if you are, but would you and said like to see moving forward and how might congress help. I am not concerned withrn the portal, think as far as having a portal, i think its a great option for banks and other institutions that dont have a Forgiveness Method but i think cethat dont force Peoples Hand in the portal and i think those having those relationships the borrowers is, what we create that buffer and we can help with those complicated questions and i think even as was alluded to the fact that some of our smaller borrowers, 4130 spots, the sum of those are some of the more complicated questions that arise in a so if we can help answer those questions, weve based those relationships for over 40 years, that is what we try to do pretty. I appreciate this party and you are one of the institutions that have helped keep ourur smal businesses afloat. And you as well as i do, 15 or 17 months ago, renamed have the answers and we didnt either. So we were working through it. In our Lending Institutions across this nation deserves so much credit for helping us help to get that capitol to where it needs to go in a short period of time and so with that, and as we move forward here i think that we ought to make sure that we always talk about the economic drivers and the communities of our small businesses. We needed to care for small businesses as mr. Fisher said, the customer s Relationship Building is extremely important to have. And having been in small business for 31 years commanders in the relationship with the banking the makers printed in the institutions are incredibly important. So with that, i yield back. And thank you. And now we recognize the next person for five minutes. Thank you. Ire understand your cdc works wh many borrowers who require in applying for the ppe loans. There trying to challenge our these borrows patient Loan Forgiveness. Thank you the biggest challenges weve seen a forgiveness of the borrowers who misunderstood the rules that are changing rapidly at the time. And possibly changing their Loan Amount to borrowers read responsible for calculating that and so with the businesses that are expecting funds, there have a misunderstanding that this would be adi grant. [inaudible]. And keeping their employees paid, many find that they not wouldve taken it if they known that printed the last thing that they need his additional payments. So the small businesses especially that are suffering that they be allowed that we did it was imperative that they were allowed that. [inaudible]. The last thing, the small businesses about 25000, by and large especially for one person businesses. They would qualify in having them go through the paperwork through a separate application and for businessespl that small and we think that it would be appropriate. We absolutely west of the fda would and it could be problematic for the ability to. [inaudible]. And having the businesses with false documents and. [inaudible]. They should be prosecuted. And the forgiveness, these models and assistance, we would ask fda for the investigations. I followup. When options exist to the nsborrowers is not being responsible for the forgiveness. I think the fda should absolutely to make sure that they have them for Forgiveness Applications and within a reasonable timeframe and should not view this trinity and they are with the fda, is important to keep those bones that will be forgiven, and investing in resources and communities. And the loans if not forgiven, they cannot make the investments. The fda focuses a review on this issue with her doing it randomly read. [inaudible]. And these processes we are not processing the fda has a series now of things for them they can help them come back and look at those small loans in the fda reviewed. Thank you and i yield back. And thank you very much for this hearing and thank you. Now we recognize the gentleman from pennsylvania. Thank you chair and ranking members and to our test of fires. So certainly the ppe and i think that we have virtually all agreed that is worked out well. My district and the staff was very helpful along the way and is matter fact, they called at 7 00 a. M. And sometimes 11 00 p. M. For number of months now. In the fda should be an Advocate Thing almost by definition for small business rated so the ppe was successful because it was created by the Trump Administration Treasury department but was driven and administered it by the private sector. With the support of the sba so the Publicprivate Partnership if you well. It certainly worked out well. Now the idle loans, and i know thats a challenging subject to bring up but it was a very different story and was in fact not exclusively by the sba. So the sba is serving as an advocate for small business. Wouldnt been the sba have checked with the community makes before hand before sitting out such a letter and basically mandate and encouraging the use of this direct Forgiveness Portal partied and mr. Fisher, are you ready of your bank associations advised or asked for their input on the requirement to use direct Forgiveness Portal rated. No we were not advised this was going to be mandatory are pushed down on the banks. Forgiveness is been going on since september of last year read. Read this email was received Monday Morning correct pretty. Correct. Printed they explained it all i was so important that as we discussed, fraud and problems and why this portal would be so necessary. Did they go over it with you. No okay and if the letter in the email he came out for the direct forgiveness stating that many banks were managing their accounting of financials through 2022. As part of a better Accounting Plan for themselves. It says something that is been discussed or that you thank you so a widespread issue. , the Community Banks that i know, we dont give those loans offer books and get the loans forgiven for our customers. That is been a plan since day one and this is always deemed a shortterm solution to help our Smallsm Business customers and have our communities survive. Right, with my district, the same thing. Certainly the customers that way some perhaps improvement of accounting for 2022. So back to this email, just looking at it here, the audits and as you quoted it, the sba warned Avoid Lender Audit to avert it, we encourage direct forgiveness orioles being utilized. Maybe i am paraphrasing. I was not really written in like a small business advocate. Always your thought. When you received that language. We have to have all of her loans forgiven for both the end of the year so i personally, not overly concerned about being audited from the going to find anything that if they come in but nobody wants to get audited by the fda so it did not sit well with me especially because we have been working so hard and forgiveness for our customers. I would agree if i were sitting in your seat and i just think that it is clear that the portal for direct forgiveness must remain an option with no perceived or penalties whatsoever. And certainly we need highlevel integrity with the programs and without Madam Chair yield back. I dont think there are any otherr members. I am here. And another representative as well read and i can see you. I recognize the gentle lady from pennsylvania for five minutes. Thank you very much for all of you for joining us today, i have some quick questions in the first one is for understand that in your written testimony you shared there is a need to alleviate a necessary paperwork burdens for the businesses and you shared they should be expanded to simplify Forgiveness Applications for the loans all of the way up to including three or 50k. Would you be able to speak a little bit more in this forum about that in depth and why we might need to expand are the simplified Forgiveness Application for ppe from what existed hundred 50k up to 350k. I think anything that we can do to simplify the process from the small businesses, is useful and helpful. I think expanding is minimal on the minimal risk on the fundus. Making it available and lessens the burden of documentation and makes it more efficient. And while it is not have to be viewed and gone through back and forth with the lender or even submitted to the fda. And this should be on all Loans Representation if they choose rated as something that we think it would be or make this process easier for more businesses and we thank. [inaudible]. To have an appreciation on this metaphor have any of the total number of loans that would then represent the three and her 50 on the loans. I think i should not to speak because i probably dont have the right number in my head. I think that if you go up to some of the 350,000dollar level, you are getting over 90 percent of the loans that have been made through that Streamlining Process and that allows the sources to focus on the higher risk loans and to ensure the documentation supporting the Payroll Documentation to protect these loans rated. Thank you so so much my final question, i was also hoping that you would be able to elaborate on how the fda can continue to improve the Forgiveness Process for underserved borrowers and those in particular may not have attorneys or accountants on staff to help them through the process rated without the fda be doing to improve the process to them. Like you get my wish, i would say for those organizations that are working with the small businesses through the portal and i think small businesses using nonprofits that my organization represents, not just hitting those sort of websites for the portal, the really walking through and providing and support to the borrowers to understand what is being asked. And all of that. So its really not handsfree and situation. I think they could support that extra labor printed think that everyone is not about the race during the pandemic to do whatever it is necessary but a lot of the support is not coming forth and just kind of being provided without resources to back it up pretty so if Theres Anything like that and then to my prior point, the district offices, the communities and organizations to ask questions to final any doubt. She is very helpful to have a directed person to answer and looking at this because each loan is so particular. I think that all of the letters all agree. So it is really challenging to half straightforward rules that apply to everybody. And really quickly. I just wanted to respond to rising up to 350 would bring this to 94. 2 percent of the ppe loans. Such as the increase of 7. 7 percent. Thank you and i appreciate that and with that i yield back. And now we recognize thehe gentle lady from New York. For five minutes printed. Thank you and also thank you to everybody, just really appreciate it holding this important hearing on ppe. Is been a lifesaver for my community was small Business Community isss what drives the economy in my region. And we are so grateful that were able to have this program and how effectively it was done for our small Community Banks and creditit unions and i know that rkworking with our Credit Unions and the banks as a former Bank Attorney and also as a small Business Owner critically important it was forne us to hae access to these unfortunately dwindling number of Community Banks and Credit Unions that we can build relationships with and that is one very concerned about the letters that were received the threatening letters from the fda to the email i should say to the lenders to Avoid Lender Audits and encouraging them to move into the direct Forgiveness Program incentive working through their own institution where they have originated and they actually have Community Banks and relationships with these particular lenders. In the Business Community where they know the risks are and with the community needs and also understand businesses in the community in my first question i would like to direct to mr. Fisher and so grateful that is a frequent guest and great expert on this issue and also our president of the independent Community Bank association so congratulations for that distinction as well. I 90 manassas, what you give us a little bit more of the real implications of this coercive Letter Or Email that you received from the sba about encouraging it your business customers and businesses to move over to the Sba Portal as opposed to using it your bag in your system as a Forgiveness Site because im concerned about the liability of the bank and giving up the information pretty could you maybe address that mr. Pressure about the Liability Issue but as far as we have systems in place and actively working with all of our customers pursuing forgiveness. We work with them, and with the previous questions, i think that the easiest way to have customers and having difficulty with that ppeg for the business go to community make we will gladly help you walk through the process and even if it is not our love, we will help figure it out for you. The being forced to have to work at and through the direct Forgiveness Portal with the fda, i think thatce is problematic t. They are not going to get the same level of service that is coming to my bank. We know the customer and we have worked here and we work with them. And concerning their work the worst to goco down that path to Senator Rector hundred customers to the fda directly without having interface they can work with us to get the solution through us pretty. Is a felony, voiced concern about when the government is interfering with these relationships,in you described o eloquently, the importance of Character Lending and Community Banking relationships and i know this is been vital to many of our community to rely on this dwindling number ofin Community Banks that you provide such a great resource to so many when there is a farmer, oneofakind small Business Owner restaurants and some of the non for profits that you described that youre doing the ppe loans with some of those businesses are vital and he is a member of a community understand that, select the call that 1800 by four bureaucracy in washington too interfere in the process, that concerns me. I think the efficiencies that you pointed out earlier, in this Ppe Program are using the community letters, is worthy of condemnation, that is a good move and also, less reliant on the Bureaucrats Washington informing lions of people that are closer to our community a reallywo appreciate comments are also like to echo that my staff many of us and of our constituents, they come to us are concerned about problems we had with the fda. So to me, the fact that we have wonderful institutions like Community Banks and creditrf unions, the served customers directly that is a huge win and i think its a mistake that theyre using any kind of course are tactics i want to thank you for that and thank you for also indicating that in your testimony that you have zero product. In 100 Percent Forgiveness rates and it working through every one of the t so that is really important to know about the Accountability Aspect of this as well. I just want to get a quick question about the Credit Union aspect of this and some of the direct consequences for some of the experiences you been the Credit Union side. If you can quickly tommy that because i think im quickly running out of time pretty. One of these that was recently forgiven, hopefully you are able and thank you so much. [inaudible]. To know how important this is for those communications and subsystems the documents and advocate during trying times are second to none. You Guys Rock hundred that is the critical pieces the relationship rated. Thats fantastic and thank you. I dont t mean to disrespect the for theat people work sba big food was on the round of the customers in your Relationship Building you depend on these people and they depend on you and i think that the last thing that we need is washington bureaucrats to interfere with that and i do think this is a little bit of a fda for that to move away fromm the jobs of helping small businesses to get into a baking relationship. And interfering that important relationship with our small Business Community night think this was a great program and to end it, interfering in that, ability to forgive them which was intended as a grant program. And mr. Fisher referred to this in his testimony, it would be mistaken i think that going down the path ofdo the accountability particularly with people like the small business and small Community Banks a small community Credit Unions, have something at stake. You have skin in the game i think thats why youre so good at this and i think thats why the program was so successful, think everyone, this is really important and i hope you continue to work hard in these issues now are small business communities. We are really grateful to you and thank you so much that it and ranking members and i i yield back. Now we recognize the gentleman for five minutes. Thank you. My question is about the banking. Relative to the Ppe Program and the washington centers for equitable growth indicated that things have about 18 million in fees associated with the ppe Loan Applications and i would like to talk to whichever witness that would like to begin, the structure that was implemented for the ppeme to provide incentives and wishing the loans and whether you think that explaining why some of the largest lenders reluctant to push forgiveness through this direct Forgiveness Portal. I am happy to take the first lot to try to answer that read so first i would say, i am or would be surprised to see this process for purposes of equitable months, i have not heard and that would surprise me if that happened. [inaudible]. The fda should be informed and the structure the fee structure, really i think that Congress Needs to assure that even the small businesses have access to thein ppe. And that the congress structured it with a larger percentage to the smallest loans rated and the larger percentage with these loans does not give the advertisement or reimbursement to review backbone. [inaudible]. And actually give the loans are able to generate access. The community lenders for now for businesses. Probably would not cover the costs. And. [inaudible]. We were able to work on much of our loans, most were multiplied into the 20000. [inaudible]. We were hoping to helping the larger for the employees on staff and able to help with certain costs. And for these lenders that were working exclusively on these loans and congress did address that in the 2021 piece of this rated and a minimum fee amount. [inaudible]. We appreciate that printed are there any more perspectives on this question. I just think that going into this i dont know that going into this pandemic, that we do need to help our members rated this was basically secondary we need to get through this together and this is what we need to do for our member base. Me for my time expires, i knowor a number of borrowers wee contacted by their bank that they received more and responsible to pay it back despite having in many cases use the money for unavoidable expenses on which case was this appropriate for the communicated to the borrowers and by whom. Is the Winners Job or the fda. There any thousand that subject. I will jump into answer that, i dont know i do think that from the beginning that 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 so many of us heard as borrowers. And i think independence, were happy to review that message when it does happen. We are happy to do this and in basically for the Employee Training to our borrowers so that they understand. To understand that they have going forward with that. With that i yield back. And i think you all again for being with us today. Now we recognize the gentleman from New York. Thank you for having this hearing and thank you to the witnesses as well and we appreciate your testimony so far rated i want to start with mr. Fisher, because he sort of a followup to vote you were talking about and how youve been dealing with the customers looking for forgiveness. In the Processing Application and Whatnot Read have you come across the customers that have opted or not opted to seek forgiveness. We have had some customers that are slow to seek forgiveness but no, they dont want to be forgiven but just some are quicker to try to apply for it than others pretty. Is at the same for the others your members rated. We have seen some no money at all. Several of our Borrowers Haver opted not to apply for forgiveness. F we only have heard from them is that they felt that they did not spend money for the guidance. Thats all i have on that pretty. So they dont feel like the qualify for forgiveness okay thank you. Mr. Fisher, have you dedicated to ppe as well as how much staff dedicated for working on the Ppe Forgiveness. Initially, it was kind of all hands on deck, i have 100 ftes at the bank, but we probably have had the 20 people that were working around the clock, the weekends, trying to get the applications into the fda and the Forgiveness Phase, weve automated some ofma that so were really using about three people, two f three people to handle a Forgiveness Phase is been efficient and it pretty effective for us. And very similar. We brought on temporary employees to help us through the Process Andan we been working wl through that as well pretty. Okay, and finally, what ppe and getting funding out the door is first going, there was a big question to employers, how they keep open and ppe is a big help. For many of the witnesses, anyone, what are you hearing specifically now and how or what concerns are you hearing from small businesses now. I think a big concern right now is going to happen with this next wave, it will lead to shutdowns and we are seeing mask mandates for schools and things like that, so it still think there is a lot of uncertainty with the business which is always problematic. Certainly on the regulations on how to handle it, i dont think it will but if there is another shut down. About the workforce, and just not available workforce and then they are now turning to reopen their businesses of those just something that is going up. I have heard that a lot from every industry from construction to restaurants. In Manufacturing And Retail and everybody is having trouble with staffing now. Thats a huge improvement. One of our biggest challenges was almost daily changes came through during the duration of this program that made it almost impossible if they were eligible or ineligible 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 big banks, committed to banks, cdfis, even fintech gating in got these Funds L to a a lot more borrowe. And allows these funds to be fondled to a large sources so more money to get out the door as quickly as possible to these businesses that need it to survive. Having clarity and rules from the beginning and having clear steps foror forgiveness and delivering on that promise, taking away that uncertainty as to whether youre going to get these funds forgiven or whether you suddenly have an expected that after you kept your staff home, those are the things that could be addressed to help more businesses if we, you know, hopefully dont come if we ever had to go through something like this again. Thank you. My time is up so i yield back. Thank you, chairwoman. We now recognize the gentlelady from california, ms. Kim, for five minutes. Thank you. Thank you, chairwoman and ranking member. I also w want to think the witnesses for being withto us today. Youve heard a lot from my colleagues about how the ppp has been tremendous assistance in loving small Business Owners, and in my district also its been a lifeline for them to weather the economic downturn caused by the Covid19 Pandemic and unprecedentede lockdowns. Were talking about the next phase of ppp f forgiveness. The massive efforts of distributing close to 12 the Ppp Loans and sustain close to 50 million Jobs Couldnt be possible without our partners like the banks and credit being somewhat to thank them and the Partnership Theyve had with you guys. But untroubled here sba was threatening excuse me. I was really troubled to her that sba was threatening the lenders to opt into the direct Forgiveness Program to avoid audits by Thefi Office of credit risk management. Nders that have yet to accept foregiveness for a 2021p. P. P. Borrowers or those that are not actually reaching out, the damage has been done. And must be careful not to vilify lenders moving forward. And i also must stress whether a bank or any other Lending Institution with the forgiveness has no bearing on a Borrowers Opportunity to get their p. P. P. Loan forgiven. Many banks and lenders have already set up their own Forgiveness Platforms that are complementary to s. B. A. And having really a so let me ask you, mr. Fisher, i agree with your testimony that the f. B. A. Should not force lenders to opt in to the direct Forgiveness Port and with a high number of review requests from the f. B. A. Which requires lenders to put resources aside to provide documentation, what should we expect if s. B. A. Decides to proceed with audit on lenders on top of all these review requests . And how shah going to divert your attention in serving your customers properly . Just it diverts resources away from my mission of serving our local community and our customers and helping small business if im trying to provide documents and trying to deal with auditors from s. B. A. It becomes problematic for us. Sure. Mr. Fisher, you also said in your testimony you mentioned f. B. A. s s. B. A. Like 7a and 504, they rely on Bank Underwriting and the expectation that lenders went to the table. Can you explain to our committee what would change if s. B. A. Moved in the direction of direct to borrower programs at the s. B. A. . Obviously if you leave the bank out of it, youre subject to potentially more fraud. I think thats been brought up that the substantially more fraud, direct loans to s. B. A. 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 7a programs and 504 programs and even p. P. P. Was very successful and i think limited fraud by utilizing the Banking Framework that we have. Well, thank you so much. Yeah. I think the biggest concern that we have is the impact, you know, and we want to make sure that 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 the forgiveness Review Process by the s. B. A. Is challenging and time consuming . Are there certain steps that add extra days to the review . And under loan review, it is a timeconsuming process. Because its not typically that we have that the lender has a direct communication with the s. B. A. Representative. When an email is sent out and sometimes it can be very vague. And then were asking for additional documentation. Sometimes if were and were repeating ourselves, sometimes we have to reach out and get additional information. Not a misunderstanding of what that is going to do for the loan itself in terms of forgiveness. So it does add days and also adds Frustration And Stress for the borrower in terms of the fear of a widewaning wideranging review it can add stress that a small Business Owner does not need at this time. I have another question to ask but i think my time is up. So i will yield my time back. Thank you. The gentlelady yields back and we recognize the gentlelady from texas. Thank you very much, for holding this hearing today. As the driving force behind our economy on and employer of nearly half of all american workers the success of small business is critical for each of our communities and 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 a trillion dollars to small businesses 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 Hagadorn that were discussing complex policies yet again without an f. B. A. 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 f. B. A. In front of the committee very, very soon. That being said, waibt i want to thank the witnesses we have here today. Mr. Fisher, i appreciate all the work 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 its raining there today but now is when i want to be there because were in dallas, texas. And been 100 degrees. So enjoy your summers and your falls because winter is coming soon. But i do have i do have a question for you. Despite many circle circumstantial setbacks the p. P. P. Program successfully kept small businesses afloat during the pandemic. So its a look ahead to preparing for the next major disaster. These problems are not unique to just p. P. P. I know also asked a similar question and change it just a little bit. How can we improve the p. P. P. Model to disperse the quickest aid but also minimize fraud . 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 7a lending. Is definitely probably the way to go. Because we have relationships with those businesses. We know the businesses because its down the street. I drive by it every day versus somebody whos just seeing it in an application either on paper or virtually trying to make that decision. I think we can be a great mutual aid to get those dollars out and also curb fraud. Thats good to know. Ms. Dylan, in your testimony, you state that in 2019 before the pandemic hit, that Latino Owned Businesses had hit a recordbreaking stride with their average annual revenue, increasing 10 to over 525,000 per year. And the exact type of Growth Strategy i think that were looking for in a Business Environment and we need to get back to that. What would you attribute that success to back in 2019 . I think the success was reflecting the scaling of latinoowned small businesses. So businesses that may have started five or 10 years ago that were going to the next level and expanding additional personnel and unfortunately the pandemic is a setback but i think we can harness that sort of Growth Mentality and perseverance moving forward and so hopefully just a hiccup in the story of our entrepreneurship story. Were there any particular policies that you think that helped back in 2019 that we should either try to strengthen or bring back . I dont know that i would point to a particular policy. Im not sure. I really do think its sort of just maturity of the businesses that have taken off at that point. But im open to suggestions of what policies you may be referring to. Well, i dont know. Maybe Tax Cuts. Are we looking at Tax Cut and jobs act proposal, did that strengthen, did that help . And right now, from the biden administration, a number of financial policies that are coming down that are talking about increasing taxes, we got inflation. So in backing away on some of the policies, i think really helped grow the economy and were very positive that small businesses and im wondering if youre seeing the same thing. I dont know that i would attribute it to that. I would say that not taxes those larger businesses, a business thats making under a million dollars is not, you know, going to be targeted in that segment. But im talking about specifically small businesses. Thats right. I guess would be probably looked at as a microbusiness. 250,000 to 500,000 range. I yield back my time. Thank you. Gentlelady yields and now we recognize the gentleman from florida, mr. Donald, for five minutes. Thank you, Madam Chair. And thank you to the ranking member for holding this hearing. I got to tell you, i think s. B. A. Getting involved in as involved as theyre trying to be with this Forgiveness Process and frankly, you know, threatening Community Banks from doing what theyve already to do is outrageous. Its outrageously wrong. And a prior life, i was a Credit Underwriter at a Community Bank. I had to deal with s. B. A. When we were doing joint credit with them. And to be frank, s. B. A. Would be late to the table often with respect to their lending decisions. But we already knew it was it just took forever to deal with s. B. A. , for them to come in now and in some respects completely take over the Forgiveness Process to me doesnt make much sense at all so my question first question for mr. Fisher, and you guys are going through the process of forgiveness, what kind of data are you looking at in order for forgiveness . We just make sure that its a valid loan. We validated all the customers at the front end so the forgiveness we just have to ensure that they have all the documentation required by s. B. A. And it goes through we have an automated system that it goes through and submits directly to s. B. A. And we typically right now were getting forgiveness back very quickly from s. B. A. So a pretty smooth process for us right now. Ok. And ms. Ward, my question for you is what difference what different or what value added is s. B. A. Bringing to the Forgiveness Process to why they should be involved . I think the value s. B. A. Is having is creating this direct for Business Portal theyre giving an easier, more efficient online access for some p. P. P. Borrowers that may not be getting that from their lenders. And in that case that is incredibly valuable. And happy to see that theyve created the portal to fill that gap. I agree for lenders that already had created their portal, and that are efficiently processing p. P. P. , it should be allowed to keep using their own systems. And s. B. A. Direct portal should expand that access to forgiveness and not limit different ways that borrows can get forgiven. And as an s. B. A. Lender eve worked with microloans, now p. P. P. Loans. And s. B. A. Works best in my opinion when it works in partnership with the lenders. Each has their role. And s. B. A. Can have draftically more impact working through the lending community. That means it can be expanded and more community lenders, lenders that are making sure to hit one of their served borrowers but that is where i think s. B. A. Provides incredible and unique service and much needed, s. B. A. Loans of all type why the u. S. Has such a vibrant small business economy. A followup to that. Like i said, somebody who has been a done credit underwriting, with the amount of loans in the system, how would s. B. A. Act absolutely go about dealing with loans that there might be early indications are fraudulent or that dollars were spent not in line with the p. P. P. Program . And as such, those dollars a portion of those dollars, those dollars overall would not be forgivable, how would s. B. A. Deal with that . What weve seen that process improve since the program got rolled out. I think initially in the speed to get these dollars out, allow the normal to reclaim my time real quick, i understand what youre saying but from now going forward, what frankly special mechanism is s. B. A. 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 there have been a couple alliterations of p. P. P. What if those dollars were not spent in any of those iterations and what is s. B. A. Going to do and to make sure those dollars are repaid to the taxpayer . Of all of s. B. A. Final determination, the banks, the lender, and that recommendation for s. B. A. Based on does this loan qualify for forgiveness or partial forgiveness. And s. B. A. , forgiveness on that. S. B. A. Also has the right to review those and ask for additional documentation. And so theyll keep doing that same thing. Theyll 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 to keep your Business Operating and keep your staff in place, businesses that didnt do that should be held accountable for paying that back. Thank you for that. And i know im over my time and thank you for the indulgence and i yield back. Thank you. The gentleman yields back. And let me thank all the witnesses for being here today. Your testimony has shown the progress we have made in forgiving p. P. P. Loans and also the challenges that small businesses still have. Madam chair, we got one more witness or one more member, mr. Fitzgerald, from wisconsin, is still on. Well, he has hes on. The hearing. Madam chair, im not sure if i just had a quick one if i could sneak sure. We have always said that you are in a hearing, the place to keep the video on. So sir, youre recognized now for five minutes. All right. Thank you. Thank you. Just real quick, and i dont want to be redundant and i know that the hearing has gone on. So to mr. Fisher and probably to ms. Payne, theres these stories that have been swirling for some time now, that there was kind of this Cottage Industry that was created basically because p. P. P. Loans were available, the there were accounting firms as well as Law Firms that were starting to market if you will and im trying to keep this at the 30,000foot Level And Market the idea that a, if you want to apply for a p. P. P. Loan, dont worry about it. Well take care of the paperwork. This is what youre eligible for. And then once the p. P. P. 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 c. P. A. Firms, there was billings that were done on the back end. And i bring this up and like i said, im trying im not necessarily making the accusation. But its out there. Its 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, you know, would look at and say, well, waipt. I got to pay this back in the end, im not going to take that 25,000 loan. Im not going to take it because it is going to be a burden on me later. But if i know that its going to be foregeffen anyway, sure, what the heck . Lets lets make this arrangement now with the Law Firm or a c. P. A. Firm. And suddenly you find yourself in a bad spot. And im just worried that this Cottage Industry was created. And that, you know, we dont kind of keep this in check it could go wild. Im wondering if you have any comments on that, if you saw any of this type of practice going on, and, you know, in my mind, its you know, it sounds like criminal activity. But very hard to define and very hard to ms. Fisher or ms. Payne, either of you that had direct involvement with these loans have you seen anything like this . Yeah. We did have, you know, accounting firms and lawyers that were working with customers. But they were all customers that were known to us, and actually we actually brought in i think 40 of the first round of p. P. P. Loans to our bank and 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 Accounting firms that may be referred the deal over and there was they thought they were entitled to some of the fee that was being generated from the p. P. P. Loan. But we didnt have any type of an agreement signed with them for sharing those fees. We didnt really see anything that youre talking about as far as fraudulent or, you know, the type of activity that i think youre talking about. I havent seen that. So i dont know. And i would add, we didnt see any of that and we saw really anything from the Accountant Side of that nature. And we talk more to accountants on the Forgiveness End of things than the early stages because of the combustity the complexity of the documentation. But we didnt see anything of what youre seeing because we didnt have any familiarity with that. Ms. Ward, are you aware of anything along those lines . We didnt see that in our p. P. P. Lending, either. We saw a lot of technical assistance from being provided by accounting firms and small business, technical assistance providers, payroll third Party Payroll Processing companies, step out and provide support for their customers to help them calculate. And we saw a lot of different industries really doing what i think all of you and all of we and all of these businesses did, and 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 that are nonprofits in their community keep their doors open. And im just worried yeah. Madam chair, i think this is something we got to be aware of. And i appreciate the time. Thank you. Thank you. And again, thank you to all our witnesses for being here today as i mentioned before, your testimony has shown, for p. P. P. Loans and the challenges that small businesses still face. The small businesses, the economy have made tremendous progress toward recovery in the past 17 months we are entering another pro Careius Date with the threat of the delta variant. For small businesses, that struggle for over a year even minor setbacks can still be monumental trouble. That is 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 obstacle that ppp borrowers still face. I look forward to working as a community to achieve quality solutions that ensure entrepreneurs obtain the forgiveness they are entitled to. I would ask unanimous consent that members have fivele legislative days to submit statements and supporting materials for the record. Without objection, so ordered. And theres no further business to come before the committee, we are adjourned. Thank you. Tonight Election Night in canada with the results from Canadas Network live at 9 p. M. Eastern on cspan. You can watch online at cspan. Org or listen on the free cspan radio app. Cspan is your unfiltered view of government. We are funded by these television companies and more including comcast. Do you think this is just a Community Center . Its way more than that. Comcast is partnering with Community Service to create wifi enabled lift zones so students from low income families can get the tools they need to be ready for anything. Comcast Support Cspan as a public service along with these television providers give you a front Row Seat to democracy. Next a discussion about efs to recall the 2001 and 2002 authorization for use of military force with representative Peter Meijer and Abby Spanberger. Hosted by the atlantic council this is half an hour. We have with us today to make members who have clearly done homework on the issue of reasserting congressional oversight of the nations wars, starting with the repeal of the authorized use of military force. E representative Peter Meijer represents michigans third congressional district. En rep Abby Spanberger represents virginias seventh congressional district, and they andnt othersn congress have ruled that this effort. When w