Phillips Introduces TRUTH Act to Ensure Transparency in SBA Loan Programs
WASHINGTON, D.C. — Today, Rep. Dean Phillips introduced the Small Business Transparency and Reporting for the Underbanked and Taxpayers at Home (TRUTH) Act. The TRUTH Act would direct the Small Business Administration (SBA) to explain and justify all disbursements of coronavirus relief funds, ensuring transparency and accountability from this critical agency. Original co-sponsors include Reps. Abigail Spanberger (D-VA), Lou Correa (D-CA), Jan Schakowsky (D-IL), Tom Malinowski (D-NJ), Lucille Roybal-Allard (D-CA), Betty McCollum (D-MN), Debra Haaland (D-NM) , John Garamendi (D-CA), Josh Gottheimer (D-NJ), Brian Fitzpatrick (R-PA), and Gregorio Sablan (I-MP)
The CARES Act, Payroll Protection Program and Health Care Enhancement Act together allocated more than $2 trillion to address the devastating coronavirus pandemic. However, to date, SBA has not provided full transparency over its administration of the Payroll Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL). This has led many to question the distribution of millions of dollars to well-financed institutions like the Los Angeles Lakers, while small businesses across the country remain without relief as their companies approach insolvency.
“The CARES Act was the largest distribution of taxpayer dollars in our nation’s history, and Americans deserve to know where their money is going,” Phillips said. “While we’ve managed to help millions of small businesses keep their lights on, millions more remain on the outside looking in. It won’t matter how much money we appropriate if the system by which it’s distributed is inaccessible to those who need it the most. As an entrepreneur and small business owner myself, I will be relentless in the pursuit of transparency and reforms necessary to ensure these programs work for all who need them to survive.”
On April 21, Phillips sent a letter to Treasury Secretary Steve Mnuchin about urgent changes needed to the PPP and EIDL programs, and called for full transparency into these programs testified before the Small Business Committee on April 23.
With $700 billion already allocated, it is vital for the American people to see where their tax dollars are going. The TRUTH Act would require the SBA to make the following information publicly available in an online, searchable, sortable, and downloadable format within 30 days of passage:
- Every recipient of a grant or loan that was funded by the CARES Act or the Payroll Protection Program and Health Care Enhancement Act,
- An explanation of the SBA’s decision-making process,
- The number of employees at the entity in question,
- The date when the grant or loan was disbursed,
- An identification of the bank or lender that administered the grant or loan, and
- The amount of assistance provided to small businesses owned by socially and economically disadvantaged individuals, women, and veterans.
Since the beginning of the coronavirus pandemic, Rep. Phillips has been a leading advocate for transparency and oversight of how the money flows and where it goes. Phillips authored the bill which created a bipartisan Congressional Oversight Commission and Special Inspector General for the $500 billion Treasury Department fund for large businesses and state and local governments in the CARES Act.