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U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, expressed serious reservations today about President Biden’s nominee for Deputy Administrator of the Small Business Administration (SBA), Dilawar Syed.
Ernst criticized Syed for his perceived lack of transparency, reluctance to decrease burdensome regulations, and questions surrounding his commitment to recovering fraudulent SBA COVID funds.
Ernst stressed the importance of the role of Deputy Administrator, often regarded as the Chief Operating Officer (COO) of the SBA. The COO is responsible for overseeing the daily operations of the agency and ensuring small businesses are not overwhelmed by unnecessary bureaucracy.
According to Ernst, Syed’s nomination was delayed in the previous Congress due to his failure to voluntarily disclose his company’s PPP and EIDL loans from the SBA. There were also reported false statements and errors in applications and disclosures signed by Syed on behalf of his company, causing further delays. Ernst expressed that Syed’s lack of transparency and resistance to providing requested information to the Committee did not inspire confidence in his potential role in the SBA.
Ernst also cited Syed’s failure to answer direct questions regarding overregulation and its effect on innovation and entrepreneurship. For Ernst, this lack of clarity is unacceptable to Iowa’s entrepreneurs who are currently struggling with the complexities of the current economy and its regulatory environment.
The senator highlighted the concern of Iowa’s small businesses about the impact of Washington red tape and regulation on their ability to grow and even to survive.
Furthermore, Ernst expressed doubts about Syed’s readiness and willingness to change the SBA’s culture and bring much-needed accountability to the agency. She pointed out that it is essential for the SBA to recover taxpayer dollars provided to ineligible businesses, given the estimated $100 billion in suspected fraud in PPP and EIDL.
Ernst asserted that despite commitments from Syed regarding efforts on fraud recovery and prevention, she remains skeptical due to the SBA’s decision not to pursue borrowers with unpaid loans of less than $100,000.
She also expressed concerns about the integrity of the 7(a) loan program and the risks posed by two recently finalized SBA lending rules. These rules could, Ernst believes, endanger the long-term health of SBA’s lending programs, create predatory underwriting standards, and enable fintech companies implicated in rampant PPP fraud to participate in the program.
Ernst’s remarks offer a cautionary tale for small business owners. The handling of SBA nominations and the agency’s internal operations can significantly affect the business environment. The call for increased transparency, reduction in regulation, and accountability in the face of fraudulent activity are issues of importance to small businesses across the country. As such, it underscores the need for small business owners to keep abreast of changes at the governmental level that can influence their operations and success.
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Image: Depositphotos
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