Formerly incarcerated Americans have been excluded from federal COVID-19 aid
The Small Business Administration has created barriers for people re-entering the workforce after serving prison time.
When Congress passed the CARES law in late March, it created the Paycheck Protection Program – $ 349 billion in forgivable loans to help small businesses keep employees on their payrolls during the COVID crisis. -19.
The bill that Congress voted on did not exclude people with previous criminal convictions from the program. But the Small Business Administration, which disbursed the funds, created new obstacles for the reintegration of the population.
The agency adopted a rule of April 3 that prevents people who have been convicted of a felony in the past five years, as well as those who are currently incarcerated, on probation or parole, or under criminal indictment, from obtaining an SBA forgivable loan. With this action, the SBA unilaterally decided that some business owners were not worth saving during the pandemic.
“This rule, which is blatant with the intention of Congress, senseless attacks business owners who were previously incarcerated, are currently on probation, and even those who have not been convicted at all,” said Rep. Cedric. Richmond of Louisiana in a declaration of 6 April.
On the same day, Richmond sent a letter to Treasury Secretary Steven Mnuchin. “Congress did not intend to prevent people who have been released from prison and have followed the law from starting or helping start a business from getting the capital they need to save it. Congress certainly did not intend to condemn the companies of those who weren’t even convicted at all, ”he wrote.
The SBA denied requests for comment on the appeal.
Small business loans can be lifesavers for those formerly incarcerated, many of whom receive vocational training in prison to work in plumbing, automotive engineering and other trades due to barriers to employment. Others, like Marcus Bullock, turned to entrepreneurship after struggling for years to find meaningful work. Today his company, Flikshop, employs formerly incarcerated people and serves the justice community.
But five days after the SBA released its rule, Bullock noted in a video that his bank had asked about previous felony convictions dating back seven years, not five.
Bullock was eligible because enough time had passed since his conviction, although he did not get a loan until the relief program lack of funds.
David Schlussel, deputy director of the Collateral Consequences Resource Center, also noted that the borrower application form goes even further than the SBA rule, disqualifying applicants whose cases ended without a conviction. “This is a very important aspect of the barriers that the SBA has put in place, ”he said. “The application form makes ineligible even some people whose cases are concluded without conviction. “
If these inconsistencies are pervasive, countless business owners who were legally eligible for economic relief could be excluded or discouraged from completing an application.
The SBA rule is also inconsistent with recent bipartisan sentencing reforms that encourage reinstatement and bridging programs that reduce recidivism. People released early under the First Step Act who remain on probation cannot get a loan under the rule.
Formerly incarcerated people are “generally an afterthought” for most Americans, Richmond told The Appeal. He maintains that the SBA is not demanding action from Congress to change course, but said leaders of the Congressional Black Caucus are working to address the problem in subsequent legislation related to COVID. Black Americans, who are overrepresented in the criminal justice system and more likely to die from COVID-19 than any other group in the United States, will most likely be disproportionately affected by the actions of the SBA.
According to Kara Gotsch of The Sentencing Project, the legislative process usually has an opportunity to address how laws “slice up people,” deciding who is worthy and who is not. But because these exclusions were never specified in the CARES Act, this type of advocacy was not possible.
Others say work needs to be done to bring federal sentencing laws and policies in line with those at the state level. “Many state laws say that once a recording is deleted, it is ‘as if it never happened’, which may well lead some to believe that they do not have to. report deleted records, ”said Margaret Love, executive director of Collateral Consequences Resource. Center. “This is not true – and in fact very few federal laws and rules give effect to typical state delisting.”
Congress and the White House reportedly close to reaching a deal to add $ 310 billion to the relief package, after big restaurant chains and publicly traded companies received millions of dollars in loans, run the program dry. But behind the thousands of small business owners lining up for a second wave of loans, there are countless numbers of eligible business owners who couldn’t apply.
“We are talking about the US economy,” said Jay Jordan, executive director of Californians for Safety and Justice. “If someone has a business that pays taxes and provides services to clients and they need it, what sense does it have to not allow them to benefit from a government loan program like n anyone else? other?”
Update: This piece has been updated with a commentary from David Schlussel.