Ernst Concerned About Long-Term Viability of SBA Loan Program After Biden’s Recklessness
Rising defaults, declining revenues in 7(a) program raise risk of taxpayers being forced to foot the bill.
WASHINGTON – During a Senate Committee on Small Business and Entrepreneurship hearing on the long-term viability of the Small Business Administration’s (SBA) 7(a) loan program, Chair Joni Ernst (R-Iowa) blasted the Biden administration for loosening the rules and recklessly expanding the program.
Ernst warned that declining revenues and rising default rates risked forcing taxpayers to foot the bill for the loan program that had previously operated without subsidy.
Click here to watch Chair Ernst’s remarks.
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During her questioning, Ernst spoke with First National Bank Senior Vice President Timothy Fitzgibbon of West Des Moines about the threat posed by the Biden administration significantly weakening underwriting standards in the 7(a) program.
She went on to raise concern about the long-term viability of the program after it posted four straight quarters of negative cash flow as a result of rising delinquencies and falling revenue from fees.
Ernst concluded her questioning by asking the witnesses about the specific role of Lender Service Providers (LSPs) and how it affects SBA lenders and consequently the American taxpayers.
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