Two members of Congress are demanding answers from the Small Business Administration about efforts to limit economic opportunity for entrepreneurs, including immigrants.
Senate Ranking Member Edward J. Markey (D-Mass.) and House Small Business Committee Ranking Member Nydia M. Velázquez (NY-07) wrote to SBA Administrator Kelly Loeffler that they are concerned that the recent policy changes signal to immigrants that they are no longer welcome to pursue the American dream.
SBA previously announced it will close seven field offices in municipalities considered by the administration to be sanctuary cities and restrict SBA loan access for small businesses with certain noncitizen owners and employees, including those with legal immigration status.
Loeffler announced the reforms in March designed “to put American citizens first.”
Any loan application will now include a citizenship verification provision to ensure only legal, eligible applicants can access SBA programs. Lenders will also be required to confirm that the applicant businesses are not owned in whole or part by an immigrant.
Loeffler said that an SBA audit found a loan was going to a small business that was owned 49 percent by “an illegal alien.”
Under her direction, the SBA halted the $783,000 loan which had previously been approved.
“I am pleased to announce that this agency will cut off access to loans for illegal aliens and relocate our regional offices out of sanctuary cities that reward criminal behavior,” Loeffler said. “We will return our focus to empowering legal, eligible business owners across the United States – in partnership with the municipalities who share this Administration’s commitment to secure borders and safe communities.”
According to the lawmakers, the policy will harm small businesses whose owners, investors or key employees are foreign nationals or immigrants with certain legal statuses, including asylees, refugees, visa holders and recipients of Deferred Action for Childhood Arrivals (DACA) status.
“SBA’s policy changes are a solution in search of a problem and appear to stem from the notion that certain groups are receiving loans when they otherwise shouldn’t be. Our committees have never seen any evidence, credible or otherwise, that meaningful numbers of individuals in the United States without legal authorization are receiving access to SBA financing,” the lawmakers wrote.
Six regional offices in Atlanta, Boston, Chicago, Denver, New York City and Seattle will be moved to communities that comply with federal immigration law, Loeffler said.
“This administration is playing political games with people’s livelihoods and, once again, recklessly failing to consider the interests of small businesses,” Markey and Velázquez wrote. “SBA’s loan-policy and office-closure decisions will unduly harm millions of small businesses across the country that have been suffering through the chaotic, confusing, and unpredictable economic policies of the Trump administration.”
The lawmakers asked Loeffler to respond to a set of questions including:
- Why has the agency deviated from a quarter century of precedent, including from policies that the first Trump administration followed, in imposing a strict requirement that a small business with certain noncitizens who own or operate—even in part—the firm are ineligible for SBA loans?
- Does SBA have concerns that barring delegated lenders from having SBA expressly approve certain loans will cause lenders to make ineligible loans or forgo making certain loans altogether
- How will SBA provide delegated lenders with assurance on the eligibility of their loans, beyond an email inbox?
- Does the SBA anticipate that its policy change will compel small business owners to unduly discriminate against individuals in hiring, firing, promotion, or recruitment decisions based on their national origin or citizenship status?
- How will the SBA’s relocation of regional offices impact service to immigrant entrepreneurs?
- What steps is the SBA taking to mitigate negative impacts to immigrant entrepreneurs?
Markey and Velázquez requested responses from Loeffler by July 29.
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Crystal Graham
