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Reps. Beatty and Kennedy: “Ban the Box” for Coronavirus Small Business Loans

April 17, 2020

WASHINGTON, D.C.— As Congress debates a cash infusion into the Paycheck Protection Program (PPP), U.S. Congresswoman Joyce Beatty (OH-03) and U.S. Congressman Joe Kennedy III (MA-04) today called on Congressional leadership to fix a glaring flaw in the program that disqualifies small business owners with even minor offenses from critical relief. As it becomes increasingly clear that the COVID-19 pandemic has disproportionately impacted communities of color, these exemptions will only penalize the same communities that have been most prejudiced by a broken criminal justice system.

Under the PPP, small business owners are automatically deemed ineligible for a loan if they, within the past five years, have: been convicted, pleaded guilty, pleaded nolo contendere, been placed on pretrial diversion, or been placed on any form of parole or probation.

"These guidelines are overly broad and promise to disqualify small business owners in many jurisdictions for offenses as minor as possession of marijuana," wrote the lawmakers. "Inevitably, this policy will disproportionately hurt communities of color who, due to structural inequities, are most affected by the criminal justice system. As evidence increasingly makes clear, these communities also are disproportionally affected by COVID-19 and are contracting the virus and dying at far higher rates. Ample data indicate Black and Hispanic entrepreneurs already face more scrutiny and worse treatment from lenders than less qualified white entrepreneurs seeking access to capital to build their businesses. To impose rules that will disproportionately preclude the very communities most impacted by the virus from acquiring the relief necessary to now sustain those businesses are counterintuitive and unjust. As Congress considers future legislation, we urge you to ease these restrictions as well as for any additional programs created in the future."

To read the full letter, please click here.

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