Sens. Cruz, Cramer, Colleagues Urge the Trump Administration to Protect Second Amendment Industries from Discrimination
HOUSTON, Texas - U.S. Sens. Ted Cruz (R-Texas), Kevin Cramer (R-N.D.), and a group of 16 senators on Tuesday sent a letter urging Treasury Secretary Steven Mnuchin, Federal Reserve Chairman Jerome Powell, and Small Business Administration (SBA) Administrator Jovita Carranza, to protect Second Amendment-related industries from discrimination by financial institutions.
In the letter, they wrote:
"Several of the nation's systemically important financial institutions use their market dominance to financially discriminate against legal and compliant businesses for political reasons. This includes the firearms and ammunition industries, a vocal but small minority has weaponized federally-backed banks against politically disfavored businesses that operate in good faith and compliance with the law, by denying them financial services based on political reasons that have nothing to do with creditworthiness.
"We find it extremely disconcerting that, while the vast majority of SBA program lenders do not promote financial discrimination policies, many of the nation's largest institutions currently do."
In the letter, the senators ask SBA to clarify:
- What efforts have SBA and the Administration made to ensure the nation's largest financial institutions approve and distribute Paycheck Protection Program and other SBA disaster relief funds in a prioritized and unbiased manner?
- How has SBA and the Administration communicated to large financial institutions that current SBA 7a Loan Program eligibility regulations are to be strictly adhered to?
- How does SBA and the Administration address potential conflicts between social governance responsibility commitments of financial institutions which violate or contradict SBA loan program eligibility regulations?
Sens. Cruz and Cramer were joined by Sens. John Cornyn (R-Texas), Rand Paul (R-Ky.), Rick Scott (R-Fla.), Steve Daines (R-Mont.), Tom Cotton (R-Ark.), Lisa Murkowski (R-Alaska), Shelley Moore Capito (R-W.Va.), Mike Lee (R-Utah), Joni Ernst (R-Iowa), Cindy Hyde-Smith (R-Miss.), Jim Inhofe (R-Okla.), John Barrasso (R-Wyo.), John Hoeven (R-N.D.), Ben Sasse (R-Neb.), Mike Braun (R-Ind.), and Josh Hawley (R-Mo.).
The letter can be read here and below.
April 28, 2020
The Honorable Steven Mnuchin
Secretary Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
The Honorable Jerome H. Powell
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue
NW Washington, DC 20551
Ms. Jovita Carranza
Administrator
United States Small Business Administration
409 Third Street SW
Washington DC 20416
Dear Secretary Mnuchin, Chairman Powell and Administrator Carranza,
As you may be aware, several of the nation's systemically important financial institutions (SIFI), including Citibank, Bank of America, JP Morgan Chase and others, continue to use their market dominance to financially discriminate against legal and compliant businesses for political reasons. This includes the firearms and ammunition, oil and gas, coal and private corrections industries, to name a few. A vocal but small minority has weaponized federally-backed banks against politically disfavored businesses that operate in good faith and compliance with the law, by denying them financial services based on political reasons that have nothing to do with creditworthiness.
Small business creation and ownership are the backbone of many in these industries and access to competitive and predictable capital, loans, and other financial services are critical as they seek to recover from the economic impacts of the Covid-19 pandemic.
The Small Business Administration needs to use all available resources and assets in its efforts to move financial resources into local communities as quickly and efficiently as possible. However, we are concerned the nation's largest financial institutions will use participation in the Paycheck Protection Program and other SBA recovery loan programs to further financial discrimination policies against selected segments of the economy, based on their social policy and in opposition to SBA eligibility regulations.
SBA's recently released interim final rule for implementation of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides that "the lender must determine whether the applicant is one of the types of businesses listed as ineligible in SBA regulations (13 CFR 120.110)." We find it extremely disconcerting that, while the vast majority of SBA program lenders do not promote financial discrimination policies, many of the nation's largest institutions currently do.
With that in mind, we would appreciate your providing answers to the following questions:
- What efforts have SBA and the Administration made to ensure the nation's largest financial institutions approve and distribute Paycheck Protection Program and other SBA disaster relief funds in a prioritized and unbiased manner?
- How has SBA and the Administration communicated to large financial institutions that current SBA 7a Loan Program eligibility regulations are to be strictly adhered to?
- How does SBA and the Administration address potential conflicts between social governance responsibility commitments of financial institutions which violate or contradict SBA loan program eligibility regulations?
I look forward to your timely response about this situation. Please do not hesitate to contact my office with any questions.
Sincerely,
/s/
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