WASHINGTON, D.C. — To ensure that the Paycheck Protection Program (PPP) is prioritizing underserved and rural businesses, as required by the CARES Act, yesterday, Representatives Tony Cárdenas (CA-29), Judy Chu (CA-27), and Marc Veasey (TX-33) introduced the PPP Data Diversity and Accountability Act of 2020. This bill would require the Small Business Administration (SBA) to collect and report on demographic data, disaggregated by race, in order to show how many PPP applicants were minority-, women-, or veteran-owned. It would also require data not only on the number of approvals, but also of denials. Despite the requirement in the CARES Act, SBA and Treasury have still not provided guidance to lenders on how to prioritize these businesses, which has led to large numbers of minority-owned businesses not being able to access assistance. Small banks have also reported being overwhelmed by the need from those whose applications were turned away by big banks. Reps. Cárdenas, Chu, and Veasey issued the following statements:
“The data is clear: this pandemic is disproportionately affecting people of color. Black and Latino Americans are dying at higher rates from the coronavirus than white Americans,” said Rep. Cárdenas. “Similarly, when it comes to access to capital, business owners of color frequently face greater hurdles and added scrutiny in securing the financial resources that they need to operate. That is why I am proud to join Reps. Chu and Veasey in introducing this bill, which requires the Small Business Administrator to track demographic data of recipients of the Paycheck Protection Program to increase transparency and accountability, ensuring that loans are being distributed equitably. Every community should be supported during this difficult time, and this bill will make certain that communities of color are not left behind.”
“The coronavirus and the economic slowdown are threats to every one of us, regardless of our race or background. But while the threat is equal, the impact is not,” said Rep. Chu. “Communities of color have been bearing the heaviest burden even as they have had a harder time accessing aid. The CARES Act was written to help all of our businesses survive this crisis, not just the biggest ones with close relationships to big banks. That is why the government assumed all the risk. If minority-, women-, and veteran-owned businesses are being left out, as the data have indicated, then it is holding back the economic recovery for all of us. And it will leave these communities in particular even worse off after this crisis. The solution is simple, the SBA needs to provide disaggregated data to illustrate the full picture of who is getting relief, and issue guidance to ensure it is distributed to all who need it.”
“The Coronavirus pandemic is compounding hurdles that business owners of color already frequently face when securing the capital that they need to operate,” said Rep. Veasey. “I am proud to join my colleagues in introducing this bill to help break some of these barriers by boosting transparency about how small business relief programs are being administered and ensuring that federal aid gets to those minority small business owners that need it most.”