June 24, 2020

NEW YORK — Today, the Small Business Administration (SBA) issued a new rule expanding eligibility for federal Paycheck Protection Program (PPP) loans to include a broader number of small business owners with criminal records, a group that is disproportionately Black and Latinx, to help keep their businesses and employees financially afloat in the wake of COVID-19’s massive economic impact.

The new rule comes in response to a lawsuit the American Civil Liberties Union (ACLU), the Public Interest Law Center, Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and partners Jenner & Block and Weil, Gotshal & Manges filed in federal court last week to stop the SBA from denying federal PPP loans to tax-paying business owners with certain criminal histories — such as those with pending charges, those serving parole, probation, or those who have been convicted of a felony within the last five years.

Under the new rule, small business owners with pending misdemeanor charges and those on probation or parole for older crimes may now apply. Business owners with pending felony charges or those currently on probation or parole for a felony offense committed in the last year, and five years for those with financial crimes, are still barred from eligibility.

Below is a comment from ReNika Moore, director of the ACLU’s Racial Justice Program, in response to the new rule:

“The SBA’s new rule is a step in the right direction, but there is still more work to be done. We see it as a win that small business owners who have been excluded from accessing this relief up until today — including two of our clients who were denied or unable to apply for PPP loans due to their criminal histories — can now apply and get the access to the financial relief they need. But while the new rule broadens eligibility for many small business owners with criminal records, it’s simply not enough. Some small businesses with criminal records are still excluded, and given the deadline to apply for PPP loans closes in six days, on June 30, we contend that the application deadline should be extended to ensure all impacted individuals have a fair chance to apply for and access PPP loans.

“All small business owners and their workers — regardless of any criminal record — should have access to this economic lifeline, and we won’t stop fighting until it’s afforded to all.”

More information on the case is available here: https://www.aclu.org/cases/defy-ventures-inc-v-small-business-administration

A video on the case is here: https://www.youtube.com/watch?v=dwnqEv7__mc&feature=youtu.be

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