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The House Small Business Oversight Subcommittee Friday held a hearing with Small Business Administration (SBA) Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin, which focused on the impact of the paycheck protection program (PPP) in helping small businesses hardest hit by the coronavirus pandemic.

The hearing also covered other pandemic programs offered by the agencies, such as the economic injury disaster loans (EIDLs).

Ahead of the hearing, NAFCU reiterated its call to simplify the PPP forgiveness process and urged lawmakers to support bipartisan legislation – the Paycheck Protection Small Business Forgiveness Act – that would ease the forgiveness process for loans under $150,000.

Mnuchin, responding to a question from House Small Business Committee Ranking Member Steve Chabot, R-Ohio, said he is open to blanket forgiveness for smaller loans, so long as there are appropriate measures in place to still investigate fraud.

NAFCU has argued that the smaller loans are less likely to pose a high risk of fraud, and that the SBA and Treasury still have the ability to review applications that are forgiven.

Mnuchin also indicated his support for allowing businesses hardest hit by the pandemic to take out a second PPP loan, as well as a new round of loans for businesses that qualify with a revenue test.

On the forgiveness process, Carranza told Rep. Tim Burchett, R-Tenn., that the agency will release additional details for lenders to submit borrowers' loan forgiveness applications by August; NAFCU had flagged this issue in its letter ahead of the hearing. After initially releasing PPP forgiveness applications in May, the SBA and Treasury last month released a revised version and an EZ version for borrowers that meet certain criteria.

Lawmakers also discussed the need to ensure small businesses in low-income and minority communities had access to funding. Mnuchin highlighted that community development financial institutions (CDFIs) are best situated to serve these areas, which is why they were given set asides in the second round of PPP funding.

NAFCU continually highlights the benefits of CDFIs to Congress in supporting these businesses and advocates for additional funding for the Treasury's CDFI Fund. The association has also advocated for additional set asides for CDFIs and smaller lenders such as credit unions in PPP funding.

NAFCU will continue to work with Congress, the SBA and Treasury to obtain needed guidance for credit unions participating in the PPP and relief for the program's various processes.