[StBernard] Landrieu Pushes to Reform SBA Disaster Assistance Program

[Westley Annis]

Landrieu Pushes to Reform SBA Disaster Assistance Program Senate Small
Business Committee holds 

hearing on Katrina/Rita disaster response.

 

WASHINGTON - The U.S. Senate Small Business Committee, of which Senator Mary
L. Landrieu, D-La., is a member, today held an oversight hearing on the
Small Business Administration's (SBA) Disaster Assistance Program. Sen.
Landrieu pressed for quick passage of a disaster loan reform bill she and
Small Business Committee Chairman John Kerry, D-Mass., are sponsoring.

"The SBA did not have a handle on the catastrophic nature of Hurricanes
Katrina and Rita," said Sen. Landrieu, who chaired part of the hearing in
Sen. Kerry's absence. "The testimony today corroborates what has already
been abundantly clear from the struggles of my constituents -- that the
agency was more concerned about impressing the press and Congress with the
number of loans closed than about working with disaster victims to help them
get back on their feet.

"Administrator Preston has committed to reform, and I will continue working
with him and the committee to make sure the agency's response to the next
disaster is quick, efficient and responsive to disaster victims' needs. As
part of this necessary reform, Senator Kerry and I are working to pass our
critical disaster loan bill that is being held up by the objections of just
one Senator. Our bill will greatly improve the experience of both business
owners and homeowners following a disaster, be it natural or manmade, and we
must move it forward."

Sens. Landrieu and Kerry's bill, S. 163, will create an expedited disaster
assistance loan program, strengthen agency coordination and increase loans
from $1.5 to $2 million.  Despite bipartisan support and the backing of the
Bush Administration, the bill has been blocked from Senate passage by one
objecting Senator. The legislation also creates a new, elevated level of
disaster declaration that triggers nationwide economic injury disaster loans
for adversely affected small businesses. 

The hearing included testimony from SBA Inspector General Eric Thorson and
former SBA loan officer Gale Martin about the Buffalo, N.Y., Customer
Service center that cancelled approximately 8,000 loans after applicants
were not reached within 24 hours. Thorson said that "in many cases, SBA only
made one attempt to reach the borrower before canceling the loan."

Martin testified that SBA staff were pressured to cancel, decline and
withdraw loan applications in September 2006 or face losing their jobs. If
these borrowers were later reached, they were forced to resubmit all
required paperwork and still were not able to get their loans reinstated. 

Thorson and Martin testified on the first panel along with William Shear,
director of Financial Markets and Community Investment Issues at the
Government Accountability Office. SBA Administrator Steven Preston testified
on the second panel.

"I'm gravely concerned both by the allegations made by Ms. Martin and her
colleagues and by Mr. Thorson's findings," Sen. Kerry said. "We need to
ensure that no victim falls through the cracks, that no one who was relying
on the government for a loan to rebuild a business or a home was left
wondering why the government let them down. That includes victims of
Hurricanes Katrina, Rita and Wilma still to this day, victims of fire and
floods in my own state of Massachusetts, and victims of future disasters. I
believe that Administrator Preston has made big strides to right the sinking
ship of the SBA's disaster program, but we can always do better, and we must
take action to put the tools in place that will prevent another Katrina-like
response to a disaster." 


 

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