FOR IMMEDIATE RELEASE
June 24, 2020
NEW YORK — Today, the Small Business Administration (SBA) issued a new rule expanding eligibility for federal Paycheck Protection Program (PPP) loans to include a broader number of small business owners with criminal records, a group that is disproportionately Black and Latinx, to help keep their businesses and employees financially afloat in the wake of COVID-19’s massive economic impact.
The new rule comes in response to a lawsuit the American Civil Liberties Union (ACLU), the Public Interest Law Center, Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and partners Jenner & Block and Weil, Gotshal & Manges filed in federal court last week to stop the SBA from denying federal PPP loans to tax-paying business owners with certain criminal histories — such as those with pending charges, those serving parole, probation, or those who have been convicted of a felony within the last five years.
Under the new rule, small business owners with pending misdemeanor charges and those on probation or parole for older crimes may now apply. Business owners with pending felony charges or those currently on probation or parole for a felony offense committed in the last year, and five years for those with financial crimes, are still barred from eligibility.
Individuals involved in the case commented:
Joanna Wasik, Counsel at Washington Lawyers’ Committee for Civil Rights and Urban Affairs: “We are gratified that the SBA has concluded – correctly — that more business owners who have been involved in the criminal legal system, including our clients Mr. Merritt and Mr. Garland, should be eligible to apply for PPP loans. This is a win for our clients and others in similar situations. However, the SBA’s last-minute changes, issued just six days prior to the June 30 deadline, are a day late and a dollar short. Our lawsuit continues because newly eligible business owners must have more time to hear about the new rule and apply for the much-needed loans, and a smaller group of business owners remain excluded by the SBA.”
ReNika Moore, Director of the ACLU’s Racial Justice Program: “The SBA’s new rule is a step in the right direction, but there is still more work to be done. We see it as a win that small business owners who have been excluded from accessing this relief up until today — including two of our clients who were denied or unable to apply for PPP loans due to their criminal histories — can now apply and get the access to the financial relief they need. But while the new rule broadens eligibility for many small business owners with criminal records, it’s simply not enough. Some small businesses with criminal records are still excluded, and given the deadline to apply for PPP loans closes in six days, on June 30, we contend that the application deadline should be extended to ensure all impacted individuals have a fair chance to apply for and access PPP loans.
“All small business owners and their workers — regardless of any criminal record — should have access to this economic lifeline, and we won’t stop fighting until it’s afforded to all.”
A video on the case is here: https://www.youtube.com/watch?v=dwnqEv7__mc&feature=youtu.be
ABOUT THE WASHINGTON LAWYERS’ COMMITTEE: Founded in 1968, The Washington Lawyers’ Committee for Civil Rights and Urban Affairs works to create legal, economic and social equity through litigation, client and public education and public policy advocacy. While we fight discrimination against all people, we recognize the central role that current and historic race discrimination plays in sustaining inequity and recognize the critical importance of identifying, exposing, combatting and dismantling the systems that sustain racial oppression. For more information, please visit www.washlaw.org or call 202.319.1000. Follow us on Twitter at @WashLaw4CR.