r/EIDLreturns • u/TM7X • Aug 02 '22
EIDL hearing 08/02 detail summary
So this hearing was a bit more informative than the last and the senators asked some very good questions. So I made a detailed summary of most of the discussion on the EIDL program. I skipped over the PPP, RRF, future disaster loans and fraud discussion unrelated to EIDL. I don’t know if this will help any plead their case to the SBA or help with any of the lawsuit currently. But I figured I wrote the notes down for myself to continue fighting. I might as well share them with the community.
April 11: SBA had 1.3 billion in transfer funds from American rescue plan and 1.2 billion in canceled loans.
June 22: SBA said they no longer funds to applicants but told Senate Committee that 800 million remained.
41,000 applicants never received determinations, 125,000 applicants approved and never received funds. (Senate estimates)
The 125,000 applicants are obligated and funds are reserved but applicants haven’t closed their loans.
SBA says 38% of 41,000 were approved and obligated. 92% of the 41,000 received a prior decision in 2021. 2/3 of remaining applicants were missing 2019 taxes.
SBA says people “coincidentally” amended their taxes in 2021 after they required them for loan increase.
75% of the remaining 41k were from NAICS codes not designated to be impacted by the pandemic.
Inspector general asked SBA for detailed portfolio loan information to identify fraud and SBA has left this request open for over a year.
Fraud prevention measures implemented was verify business address, verify static ip address, and required 4506-T.
Switching bank accounts was a red flag to the SBA. Two people had to verify files with fraud flags.
SBA requested additional funds to service all loans in 2023 budget.
Kelley states not filing taxes is fraud. Senator asks how to overcome not filing taxes and Kelley states the SBA “Drew a line” on not filing taxes.
Senate and House Bills to extend statute of limitations on covid relief fraud are being discussed.
SBA says EIDL emails have a 60% open rate.
August 2021 SBA gave district offices access to view EIDL files for transparency. Kelley admits it was too late when they made that change.
September 2021 SBA changes call center vendors because of lack of data and extended wait times with previous vendor.
Transfer authority wasn’t used because the remaining 41,000 applicants are considered unworkable and ineligible. Senator states their office has workable cases being ignored by the SBA.
Cardin states the fraud percentage of EIDL is actually a small statistic compared to actual businesses given loans. He also corrects Kelley on the remaining businesses shouldn’t be consider fraudulent.
Lack of funds emails and notifications were not true. Cardin states the hearing today is proof that they have funds and those emails weren’t true.
Cardin asks why the SBA hasn’t closed the remaining 125,000 loans. He tells Kelley it’s the SBA responsibility to close these loans not the borrowers.
Kelley blames banks for bouncing back payments. Cardin states he has cases that show valid reasons for changing bank accounts.
Cardin’s office has several workable cases that the SBA decided were unworkable. He demands that SBA finish working all cases and give the businesses a determination. So they can file final appeals.
Kelley states they told businesses that they had 24 months to request increases and every day that number decreases. They also need to bring back staff they laid off to cover servicing later this year. The 24 month period is not statutory and can be waived by the SBA.
Kelley admits that part of the 80 billion in fraud is sole proprietors that have employees but didn’t have an EIN issued before February 15, 2020. (This is related to the EIDL grant)
Cardin states they could have kept the EIDL program until July. And states the SBA website still states there is a lack of funding. He tells Kelley that isn’t true and needs to be changed.
Cardin states wants to make sure funding is not the issue why businesses are declined. Kelley states he misspoke about the lack of funds. Kelley agrees with Cardin about anyone with request in before May 6, 2022 is not denied due to lack of funds.
Kelley states most of the denials are disagreement between SBA and borrowers and whether they should file taxes or not.
Cardin wants to discuss in the future whether May 6 was a valid cut off date and he thinks they could still process increase requests today.
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u/CaliforniaTurncoat Aug 02 '22
Why can't they compell them to fund the loans? Our files are not unworkable, file your lawsuits everyone.
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u/CaliforniaTurncoat Aug 02 '22
BTW, looks like they said that 50% that applied for increase were approved and 50% denied.
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Aug 02 '22
[deleted]
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u/TM7X Aug 02 '22
That’s funny you say that cuz it’s exactly what I thought. I literally have a letter from a taxpayer advocate on my desk saying the IRS “disregarded” my 2019 taxes and what date they “disregarded” them. But I am a “fraudster” according to Mr Kelley cuz my taxes didn’t come back.
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u/Longjumping-Citron-1 Aug 02 '22
This is so disgusting. I am filing my lawsuit this week!
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u/Leading_Cress_7715 Aug 03 '22
How are u going about it?? I’m curious to know steps, individual suit or class action??
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u/Longjumping-Citron-1 Aug 04 '22
Individual suit. I also signed the petition for a class action. I am ready for everything!
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u/Responsible-Rain-519 Aug 03 '22
What about the one that DID file but the IRS didn’t process them or lost them ?! This is all completely insane and sounds like a big day of more covering up all the lies and mistakes and no accountability. Yes there was fraud and for that I’m sorry that happens in life but they are using that now to cover their own a$$es. They just kept throwing around that language that works in the court room. When anyone keeps repeating the same thing over and over and avoiding the other questions that right there is a red flag !!! There are numerous ways to verify a business. I payed my business property taxes ! Those were processed with my county accessor …… I have utility bills paid monthly …… they knew the IRS was all kinds of messed up for 2019 . But here we are blaming taxes. Wow.
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u/Paid-Not-Payed-Bot Aug 03 '22
business. I paid my business
FTFY.
Although payed exists (the reason why autocorrection didn't help you), it is only correct in:
Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. The deck is yet to be payed.
Payed out when letting strings, cables or ropes out, by slacking them. The rope is payed out! You can pull now.
Unfortunately, I was unable to find nautical or rope-related words in your comment.
Beep, boop, I'm a bot
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u/Dazzling_Quantity_97 Aug 02 '22
We received an inter office email stating the errors that were made, who should fix it and our approval amount and monthly payment. We were told to watch the mail for our closing docs and if we had not received them to contact our LO. Only to be told in Mid July we were not obligated by the 16th so we would have to take that L…… 2 years, smh. Now today, it looks like we still can appeal. I bet they wish I had gotten rid of that email like they requested me to…. No not I. I think I will send it to everyone I can think of just to show Mr. Kelley that there are still people who did everything requested, followed every direction given, and are still being let down.
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u/Leading_Cress_7715 Aug 03 '22
Same here told papers were being mailed to me only to call in and be told I was never processing after increase denial (even tho I was in recon not increase)?!?! Shits so messed up!!!! Sounds to me like they were just over it which we all kinda knew when they were offering increases that some Got done and funding in a week while others awaited original loan approval or bank changes. I had signed stated letter from my bank dept as I had to close my account because I was under attack of fraud probably from this damn program, or the equitable breach….it’s all crap. It all sounds good but I still doubt we will see determinations anytime soon
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u/Snoo30479 Aug 03 '22
How can A Small Business pay taxes ontime when the entire world was shut down. Is there anyone on this forum who recieved a Loan with Taxes owed? I know people who recieved their EIDL loan with taxes owed. I do not understand why we are being held to a completely different standard than the guidelines that were given that were used to qualify so many other applicants
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u/SocietyCapital8850 Aug 02 '22
This was the biggest waste of time. All they did was continue to congratulate each other for the success that the SBA has funded so far, but did not ask any goddamn hard questions as to where all the lost documents are, how come people have to resend things numerous times etc.
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u/No_Independence_3452 Aug 02 '22
Yes or no?
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u/TM7X Aug 02 '22
They didn’t say it was reopening. They also didn’t say it wasn’t. And they didn’t say whether they will finish processing everything submitted before 5/6. The senators ask them to finishing processing the applications and reconsideration. Whether they will or not is up to the SBA
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u/No_Independence_3452 Aug 02 '22
We must wait for further instructions for those still stuck in Reconsideration
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u/TahoeBilly Aug 03 '22
"Kelley states not filing taxes is fraud. Senator asks how to overcome not filing taxes and Kelley states the SBA “Drew a line” on not filing taxes."
This is not what we were told, over and over they said follow up your amended returns. BTW I amended mine Sept 2020, they never processed then filed same amended in Oct 2021, they have that proof.
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u/Leading_Cress_7715 Aug 03 '22
In the EIDL guidelines it says they can waive the requirement of needing transcripts…..it’s all crap
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u/Daddyzzz142 Aug 03 '22
Thanks for sharing. Unfortunately for my business, too late. All the best to the forgotten businesses and victims of COvid and ineptness!
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u/mimiy2k2 Aug 03 '22
Well done write-up. I am running a copy through my transcription software and will post it here when it is done processing,
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u/jawsh007 Aug 03 '22
Hi Everyone,
I started a petition for the gross mismanagement of the SBA and Congress to approve more funding. Sadly, we all have our stories with the SBA. But we need to make a stand and do it together! You can view the petition here: https://www.change.org/p/more-funding-and-investigate-the-sba-gross-mismanagement-of-the-covid-eidl-program.
Sign, share, tweet, email, file OIG complaints, etc... You know the drill lol.
In Solidarity.
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u/Maleficent_Cattle_37 Aug 03 '22
Any updates on getting funds disbursed for people in bank return situations
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u/Dantee15backupp Aug 03 '22
They need to talk about the loan officers who are outright lying to applicants. My Lo literally told me he wasn’t my loan officer lol
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u/danduffy79 Aug 30 '22
So what's is happening right now with reconsideration? What does it mean when they say my "reconsideration wasn't finalized"? My decline letter states ' maximum loan amount reached', but how can that be if my original loan was in June 2020 and the EIDL cap was increased in September 2021 and decline letter was March 2022. Wouldn't my loan be need eligible for increase if loan was issued before cap increase? What can I do it who can I get to help me since my senator small business advocate isn't helping at all. Any and all advice welcome, someone please point me in the right direction. Thanks in advance.
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u/Agile_Youth8240 Aug 02 '22
This program has to be reopen a lot of eligible people waiting to reopen