Letter to Steven Mnuchin, Secretary of the Treasury, and Jovita Carranza, Administrator of the Small Business Administration - N.M. Delegation Calls on Trump Administration to Quickly Remedy Faulty Implementation of CARES Act Programs for Small Businesses, Nonprofit Impacted by Coronavirus

Letter

Dear Secretary Mnuchin and Administrator Carranza:

We are writing to express concern with the Business Loan Program Temporary
Changes; Paycheck Protection Program Interim Final Rule, 13 CFR Part 120 (hereinafter,
"Rule"). The Rule contains many restrictions that were not only not included in the CARES
Act, they were not intended by Congress at all.

Specifically, Congress did not intend for people who have been released from prison
and followed the law to start or help start a business to be prevented from getting the capital
they need to save it. Congress certainly did not intend to doom the businesses of those who
have not even been convicted at all. This rule does both those things. Specifically, section
III(2)(b)(iii) states:

"An owner of 20 percent or more of the equity of the applicant is incarcerated,
on probation, on parole; presently subject to an indictment, criminal
information, arraignment, or other means by which formal criminal charges
are brought in any jurisdiction; or has been convicted of a felony within the
last five years"

This provision is contrary to law, public policy, and common sense.

Congress and the Trump Administration have made criminal justice reform a national
priority. Working together in a bipartisan fashion, the First Step Act was passed to allow
people to be released from prison where appropriate, establish programs to reduce
recidivism, and support the formerly incarcerated as they return to their communities. Now,
the U.S. Department of the Treasury and the Small Business Administration seem to have
designed, out of thin air, a rule that erases many of those gains and expands the collateral
consequences of incarceration in the middle of a crisis.

Gainful employment and the ability to make ends meet are the foundation for
reducing recidivism. Many of the formerly incarcerated receive training while serving their
sentence to become barbers, welders, plumbers, and automotive technicians. Still others
enter into less skilled trades such as landscaping and housekeeping. Some even become the
pastors of their own small churches. One thing these professions have in common is that they
lend themselves to independent contracting and business ownership. We should be
encouraging and supporting the efforts of people to start their own, lawful businesses, not
leaving them exposed during a pandemic.

Excluding a class of business owners from the Paycheck Protection simply for their
status is not only contrary to law, it is wrong. The rule is so far reaching that simply having
a sibling in a family-owned business charged with an unrelated crime would sink the entire
business. Surely, this is not the desired result of Treasury or the Small Business
Administration?

The Paycheck Protection Program was designed by Congress to give all small
businesses a lifeline. The employees of the formerly incarcerated are just as entitled to
remaining on payroll as other Americans. The CARES Act was designed to take care of ALL
Americans. We hope you will update the regulations to reflect that.

Sincerely,