Press releases

Kennedy, Scott introduce bill to stop Democrats’ big government lending scheme

Dec 14 2021

WASHINGTON – Sens. John Kennedy (R-La.) and Tim Scott (R-S.C.) today introduced the Protecting Access to Credit for Small Businesses Act to stop Democrats from turning the Small Business Administration (SBA) into a direct lender for the 7(a) program through their partisan spending plan.

“Fraud and inefficiency characterize the Small Business Administration’s history in direct lending. The government shouldn’t encroach on a space where private lenders are already doing a good job getting funds to the small businesses that need them. I’m proud to partner with Sen. Scott to stop the SBA from replacing community and other private lenders with bureaucrats,” said Kennedy.

“Forcing community banks and local credit unions to compete with a massive government agency is inefficient and wrong. Funneling tax dollars through the federal government in order to loan it back to small business owners with interest makes no sense. This is just another example of Democrats’ misguided plan for a big government takeover of virtually every aspect of American life and private institutions,” said Scott.

The Protecting Access to Credit for Small Businesses Act would block the SBA from issuing direct 7(a) loans.

Background

  • In October, Kennedy sent a letter to Majority Leader Chuck Schumer (D-N.Y.), Speaker Nancy Pelosi (D-Calif.) and House and Senate Small Business Committee Chairs Ben Cardin (D-Md.) and Nydia Velázquez (D-N.Y.) warning against their plan to make the SBA a direct lender.
  • The SBA Office of the Inspector General estimates that the federal government’s Economic Injury Disaster Loan (EIDL) program issued $79 billion in potentially fraudulent loans. The EIDL program was rife with fraud and unnecessary delays throughout the pandemic.
  • The American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, Bank Policy Institute, Credit Union National Association and National Association of Federally Insured Credit Unions support the Protecting Access to Credit for Small Businesses Act. 

Sens. Rand Paul (R-Ky.), Pat Toomey (R-Penn.), John Thune (R-N.D), Jim Risch (R-Idaho), Mike Crapo (R-Idaho), Jim Inhofe (R-Okla.), John Barrasso (R-Wyo.), Roger Marshall (R-Kan.), Steve Daines (R- Mont.), Thom Tillis (R-N.C.), Kevin Cramer (R-N.D.), James Lankford (R-Okla.), John Cornyn (R-Texas), Jerry Moran (R-Kan.), Bill Cassidy (R-La.), John Boozman (R-Ark.), Mike Rounds (R-S.D.) and Rick Scott (R-Fla.) also cosponsored the legislation.