Portman, Cardin, Lankford, Booker Introduce Paycheck Protection Program Second Chance Act to Ensure SBA Does Not Penalize Small Business Owners with Previous Criminal Records During Coronavirus Pandemic

June 4, 2020 | Press Releases

WASHINGTON, DC – Today, U.S. Senators Rob Portman (R-OH), Ben Cardin (D-MD), James Lankford (R-OK), and Cory Booker (D-NJ), introduced the Paycheck Protection Program Second Chance Act, which will allow small business owners with criminal records to apply for the Paycheck Protection Program (PPP). Currently, PPP, which provides forgivable loans to small businesses that keep their employees on payroll during the COVID-19 health care and economic crisis, includes several questions that make it unclear as to whether other types of criminal records or past involvement with the justice system may prohibit access to these loans. The application asks if the business has “an owner of 20 percent or more of the equity of the applicant [who] is incarcerated, on probation, on parole; presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last five years.” This legislation will remove the ban on individuals with felony convictions.

This legislation follows Senators Portman and Cardin’s letter to Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza urging that the SBA allow small business owners with criminal records to apply for the PPP. National and Ohioan reentry and second chance coalition leaders, law enforcement, and local officials have voiced their support of the initiative.

“The federal government should not prevent emergency loans from being distributed to businesses owned by individuals with criminal records. We should celebrate folks who have done exactly what society asked of them: they turned away from crime, started a business to support themselves and their families, and contributed to their communities. An estimated one in three American adults has a criminal record; and because people with records often have trouble finding employment, many of them have gone on to start their own businesses after they have paid for their mistakes. This bipartisan legislation will ensure the PPP properly reflects Congress and the Administration’s support for second chances following a record of bipartisan criminal justice reforms in Congress dating back more than a decade. I urge my colleagues to join us in supporting this common-sense legislation to ensure the federal government does not deny small businesses impacted by the COVID-19 pandemic the assistance they need simply because they are owned by people with criminal records,” said Portman.

“Anyone who has rebuilt their life after being incarcerated should be celebrated and supported,” Cardin said. “Congress created PPP to help all small businesses keep their employees on payroll, and there is no reason why a business owned by someone with an unrelated criminal record should be treated any differently. This bipartisan bill will correct SBA’s unnecessary rule to ensure that PPP helps any small business that needs the support of the program.” 

“In 2018, the Senate passed and President Trump signed into law a criminal justice reform bill that very clearly prioritized giving second chances to individuals who have a criminal record,” said Lankford. “That bill eliminated many barriers for those who have paid their debts to society to access federal programs. I’m proud to support the PPP Second Chance Act to ensure the new federal programs provide opportunities to those who’ve earned them.” 

“Preventing those who have already paid their debt to society from accessing critical – and in many cases business-saving—PPP loans is yet another example of the countless barriers formerly incarcerated people face when working to restart their lives and contribute to our economy,” Booker said. “It also violates the spirit behind last year’s landmark Fair Chance Act – a federal law that makes it easier for those with criminal records to find a job, by prohibiting federal employers from asking a job applicant about their criminal history until the final stages of an application process. I’m glad my colleagues across the aisle are joining forces with me and Senator Cardin to defeat yet another collateral consequence of a criminal conviction, and allow hardworking individuals with prior convictions to access emergency loans.”  

“When the Small Business Administration excluded business owners with records from accessing the Paycheck Protection Program, they harmed people who have done everything society has asked of them, and jeopardized public safety in the process,” said Holly Harris, Executive Director of Justice Action Network. “The small business owners they are excluding have paid their debt, turned away from crime, embraced the American dream, started their own business, and become contributing members of our communities. These individuals should be supported and celebrated, not punished. During this time of national unrest, it is encouraging to see leaders of opposite parties link arms and demand that emergency relief extend to Americans of all backgrounds, including those who have made mistakes and turned their lives around. We are grateful to Senators Portman, Cardin, Lankford, and Booker for working together to heal the American economy, and we urge Leader McConnell to move this bipartisan proposal forward as soon as possible.”

“This bill represents a momentous bipartisan effort to roll back overbroad regulatory barriers that rely on arrest and conviction history to unfairly exclude small businesses from critical economic assistance, with a particularly adverse impact on minority-owned businesses and their employees,” said Margaret Love, Executive Director of the Collateral Consequences Resource Center, and former U.S. Pardon Attorney.

This legislation has also been endorsed by Justice Action Network, #cut50, Prison Fellowship, Collateral Consequences Resource Center, ACLU, National Association of Criminal Defense Lawyers, Americans for Tax Reform, Digital Liberty, FreedomWorks, Safer Foundation, American Conservative Union, Jewish Council for Public Affairs, and The Council of State Governments Justice Center. 

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