[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



              CONDUCTING OVERSIGHT: TESTIMONY FROM THE 
                     SMALL BUSINESS ADMINISTRATOR

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

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                              HEARING HELD
                             MARCH 20, 2024

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[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


            Small Business Committee Document Number 118-045
             Available via the GPO Website: www.govinfo.gov
             
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
54-985                     WASHINGTON : 2024                  
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                    ROGER WILLIAMS, Texas, Chairman
                      BLAINE LUETKEMEYER, Missouri
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                         BETH VAN DUYNE, Texas
                         MARIA SALAZAR, Florida
                          TRACEY MANN, Kansas
                           JAKE ELLZEY, Texas
                        MARC MOLINARO, New York
                         MARK ALFORD, Missouri
                           ELI CRANE, Arizona
                          AARON BEAN, Florida
                           WESLEY HUNT, Texas
                         NICK LALOTA, New York
                          CELESTE MALOY, Utah
               NYDIA VELAZQUEZ, New York, Ranking Member
                          JARED GOLDEN, Maine
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                          GREG LANDSMAN, Ohio
                  MARIE GLUESENKAMP PEREZ, Washington
                        SHRI THANEDAR, Michigan
                       MORGAN MCGARVEY, Kentucky
                       HILLARY SCHOLTEN, Michigan
                          JUDY CHU, California
                         SHARICE DAVIDS, Kansas
                      CHRIS PAPPAS, New Hampshire

                  Ben Johnson, Majority Staff Director
                 Melissa Jung, Minority Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Blaine Luetkemeyer..........................................     1
Hon. Nydia Velazquez.............................................     2

                                WITNESS

Hon. Isabella Casillas Guzman, Administrator, United States Small 
  Business Administration, Washington, DC........................     4

                                APPENDIX

Prepared Statement:
    Hon. Isabella Casillas Guzman, Administrator, United States 
      Small Business Administration, Washington, DC..............    39
Questions and Answers for the Record:
    Questions from Hon. Williams to Hon. Guzman and Answers from 
      Hon. Guzman................................................    45
    Questions from Hon. Velazquez to Hon. Guzman and Answers from 
      Hon. Guzman................................................    55
    Questions from Hon. Luetkemeyer to Hon. Guzman and Answers 
      from Hon. Guzman...........................................    64
    Questions from Hon. Van Duyne to Hon. Guzman and Answers from 
      Hon. Guzman................................................    65
    Questions from Hon. Davids to Hon. Guzman and Answers from 
      Hon. Guzman................................................    66
    Questions from Hon. Crane to Hon. Guzman and Answers from 
      Hon. Guzman................................................    69
    Additional material submitted with Hon. Guzman's QFR's.......    71
Additional Material for the Record:
    America's Credit Unions......................................    89
    America's SBDC...............................................    91
    Funding Circle...............................................    97
    Hearing entitled ``Oversight of the Small Business 
      Administration'' dated March 23, 2023......................   129
    Hearing entitled ``Small Business Administration's FY 2023 
      Budget'' dated April 27, 2022..............................   523

 
 CONDUCTING OVERSIGHT: TESTIMONY FROM THE SMALL BUSINESS ADMINISTRATOR

                              ----------                              


                       WEDNESDAY, MARCH 20, 2024

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
2360, Rayburn House Office Building, Hon. Blaine Luetkemeyer 
[Vice Chairman of the Committee] presiding.
    Present: Representatives Luetkemeyer, Stauber, Meuser, Van 
Duyne, Salazar, Mann, Molinaro, Alford, Bean, Maloy, Velazquez, 
Phillips, Landsman, McGarvey, Gluesenkamp Perez, Scholten, 
Thanedar, Chu, Davids, and Pappas.
    Mr. LUETKEMEYER. As you know, the Chairman always starts 
the meeting with a prayer and the Pledge. This morning we have 
Congressman Stauber from Minnesota to do that. Please keep the 
Chairman and his wife in your prayers as his wife is very ill 
and that is why he is not here this morning.
    So, with that, Congressman Stauber, would you please begin 
with the prayer and the Pledge.
    Mr. STAUBER. Would you please all rise with me? Dear Lord, 
thank you for this wonderful day and this opportunity to move 
our nation forward. We thank you for the witnesses. We thank 
you for all in attendance, both sides of the aisle. And as we 
are here trying to better America and our small businesses, 
please take care of our families and our spouses and our loved 
ones back home and allow them to have a wonderful, safe day. 
And thank you for this great nation that we get to call home. 
Amen.
    Please join me in the Pledge. I pledge allegiance to the 
flag of the United States of America. And to the Republic for 
which it stands, one nation under God, indivisible, with 
liberty and justice for all.
    Mr. LUETKEMEYER. Thank you, Congressman Stauber. Good 
morning, everyone. I now call the Small Business Committee to 
order.
    Without objection, the Chair is authorized to declare a 
recess of the Committee at any time. And I recognize myself for 
an opening statement.
    Welcome to today's hearing, which will focus on conducting 
oversight of the Small Business Administration. I would like to 
start off by thanking Administrator Guzman on for joining us 
today.
    This hearing could not come at a more important time for 
Main Street America. Our nation's small businesses are facing 
brutal economic headwinds, and it is our job to ensure that 
they have a fighting chance at success. This Committee's job is 
to be main street's voice in Washington, and part of that job 
is ensuring the SBA is functioning as intended. We must not 
forget that the sole purpose of the SBA is to help small 
businesses.
    During the COVID-19 pandemic, the SBA was asked to step up 
in ways that were unprecedented. Unfortunately, we know from 
multiple audits that there were serious problems within the 
agency that led to unacceptable amounts of fraud. What we know 
from countless investigations, without a doubt, is that the SBA 
needs to be right-sized. You take one look at the agency, it's 
clear they are struggling with their current workload and are 
straying from their sole mission of helping main street. The 
way I see it, the SBA is absolutely not in a position to take 
on more responsibility. I am extremely skeptical that the SBA 
is deserving of a 20 percent budget increase as there is no 
evidence the agency is operating effectively or efficiently.
    Moreover, the SBA has repeatedly demonstrated they are not 
responsible stewards of our taxpayer dollars. They have delayed 
this Committee's COVID lending investigation at every turn by 
waiting months to send over our requested documents.
    To make matters worse, the SBA has implemented an extremely 
minimal return to work policy. This is a direct slap in the 
face to our entrepreneurs who don't have the luxury of a day 
off or ability to sit in their pajamas and work from home. The 
SBA undoubtedly needs to take a page out of main street's book 
on this issue.
    Given all the problems the SBA had during the pandemic, the 
ridiculous amount of waste that has been found, and the 
significant management issues, I do not see how the SBA can 
responsibly request more money. If they were a private company, 
no investor would put up more funds for them.
    The SBA is overwhelmed and cannot adequately achieve its 
mission. The answer for improvement is not more money, but the 
cutting of wasteful spending and unnecessary action. You must 
ensure the agency is capable of handling their current tasks 
before they even think about expanding into more areas.
    I want to thank you all again for being here today and I 
look forward to today's hearing. I hope that today's 
conversation will provide a pathway for the SBA to get back on 
track.
    With that, I yield to our distinguished Ranking Member from 
New York, Ms. Velazquez, for opening remarks.
    Ms. VELAZQUEZ. Thank you. Administrator Guzman, welcome and 
thank you for testifying before the Committee today.
    It has been 3 years since you were confirmed as SBA 
administrator, when you took the helm of the agency in the 
midst of an unprecedented crisis for our nation's small 
businesses. Restaurants, theaters, gyms and small firms were 
clamoring for aid. Borrowers had to wait on hold on SBA call 
lines for hours, only to get wrong information. The Inspector 
General and GAO were issuing multiple reports warning the 
relief programs were rife with fraud, and women- and minority-
owned small businesses did not have equal access to the 
programs. Put simply, you inherited a mess.
    Undeterred, you hit the ground running. You put antifraud 
controls in place to protect taxpayers' dollars, guardrails 
that were taken down by the previous administration that led us 
to the mess that we saw, and you worked with our committee to 
ensure an equitable distribution of relief.
    Today we are seeing the fruits of our labor. There have 
been a record number of small business applications, 16.5 
million since 2021, with women- and minority-owned small 
businesses leading the way. The economy has created 15 million 
jobs, unemployment remains at historic lows, and we are making 
progress on the fight against inflation.
    Looking ahead, I would like to learn more about your plan 
for the agency. We will have to go over the steps you have 
taken to combat fraud to push back against some of the 
erroneous charges we will hear today. I hope we can examine the 
steps SBA has taken to service the unprecedented level of 
COVID-19 EIDL loans.
    It is important to point out that before the pandemic, SBA 
was servicing about 263,000 disaster loans, totaling 
approximately $9 billion. In fiscal year 2025, more than 2.5 
million loans will need to be serviced. That is a tall order 
for a small agency. While the launch of My SBA has enhanced the 
customer service experience for borrowers, the agency will need 
sufficient funds to process the loans as well as to conduct 
fraud reviews.
    Turning to lending, ensuring businesses owned by women, 
people of color, and underserved groups is an important goal 
that I share with you. SBA finalized two rules last year that 
had substantial implications for both 7(a) and 504 programs. As 
you know, I believe these rules were rushed and I want to hear 
what you are doing to safeguard the integrity of both programs.
    With regard to contracting, the federal government is the 
largest producer of goods and services in the world, and we 
appreciate that this administration continues to send a record 
amount of prime contracting dollars to small businesses and 
government contractors. However, more can be done to level the 
playing field for small businesses, recruit more small 
businesses into the federal marketplace, and put more 
opportunities within their reach. We expect that SBA will work 
to eliminate the lengthy wait times unique to the Women-Owned 
Small Business Certification program.
    Finally, I look forward to a discussion about your fiscal 
year 2025 budget proposal to better understand the vision for 
the next fiscal year.
    Thank you, Mr. Chairman. I yield back.
    Mr. LUETKEMEYER. The gentlelady yields back.
    And with that, as stated earlier, our witness today is 
Small Business Administrator Isabella Guzman. In 2021, she was 
confirmed as the 27th administrator of the Small Business 
Administration. Prior to becoming SBA Administrator, Ms. Guzman 
served in multiple capacities in the agency for 9 years, 
including as deputy chief of staff and senior advisor at the 
SBA. Ms. Guzman also served as a small business advocate for 
the state of California.
    Over the past year, we have heard from small businesses 
across the country about the successes and shortcomings facing 
the agency. That is why we brought Administrator Guzman here 
today, to ensure the SBA is doing all they can to efficiently 
and effectively address issues facing main street today.
    Administrator Guzman, thank you for joining the Committee 
today and look forward to your testimony and our conversation. 
Before I recognize the witness, I would like to remind her that 
her oral testimony is restricted to 5 minutes. If you see the 
light turn red in front of you, it means your 5 minutes have 
concluded and should wrap up your testimony. I see you have got 
the microphone pulled pretty closely to you. We are 
transcribing it so the closer you can get, the better sound we 
get. I certainly appreciate it.
    So, with that, Ms. Guzman, you are recognized for 5 
minutes.

  STATEMENT OF HON. ISABELLA CASILLAS GUZMAN, ADMINISTRATOR, 
          UNITED STATES SMALL BUSINESS ADMINISTRATION

           STATEMENT OF HON. ISABELLA CASILLAS GUZMAN

    Ms. GUZMAN. Thank you so much, Vice Chairman Luetkemeyer, 
as well as Ranking Member Velazquez and distinguished Members 
of the Committee who are here. Thank you so much. I do 
appreciate the opportunity to be able to engage and talk about 
the successes of SBA and the opportunities going forward to 
work with the Committee to help power our small businesses.
    At the SBA, we work to ensure that our 33 million small 
businesses and innovative startups have the tools, the 
resources, the support that they need to start, grow, and build 
resilient businesses as our nation's economy depends on their 
successes. When I was confirmed by the Senate in March 2021, we 
were still facing unprecedented job losses from the COVID-19 
pandemic and subsequent downturn. SBA was scaling dramatically 
to save small businesses who were facing revenue losses and 
were unsure if they would survive. President Biden understood 
the challenges facing small businesses and that is why his 
American Rescue Plan provided essential support to the very 
small businesses that are the heart of our communities.
    Every Member of this Committee knows a small business that 
wouldn't be open today if not for the support provided through 
the SBA. SBA's COVID-19 support, more than $450 billion during 
the Biden-Harris administration, was a critical lifeline for 
our small businesses when they continued to need it the most. 
The Paycheck Protection Program helped small businesses and 
nonprofits to retain their employees. The COVID-19 Economic 
Injury Disaster Loan, COVID EIDL program and targeted grants 
provided working capital to not only help small businesses 
continue to weather the worst effects of the downturn, but also 
position their businesses for growth to help the economic 
recovery. The Restaurant Revitalization Fund and Shuttered 
Venue Operators Grant programs saved our mom-and-pop 
restaurants, the cafes, the breweries, the stages, the cultural 
venues, the performing arts centers, which are all anchors of 
our main street businesses across the country.
    Our historic level of investments in small businesses, 
including through the American Rescue Plan, combined with the 
opportunities in landmark legislation, such as the bipartisan 
Infrastructure law, the CHIPS and Science Act, and the 
Inflation Reduction Act, set the stage for America to have the 
strongest economic recovery of any developed country in the 
world. Last year, when I appeared before this Committee, 
leading economists were predicting an economic downturn. Now 
the U.S. economy continues to power ahead. Inflation has slowed 
over the past 18 months and interest rates are down from their 
recent highs. And with 14.8 million more jobs than when the 
President took office, labor markets are stable and strong.
    We have seen the top 3 years of small business application 
filings on record. This historic small business boom has seen 
16.8 million applications filed since the President took 
office. These acts of hope, as President Biden refers to them, 
are powered by entrepreneurs in every state, and especially by 
women and people of color who are leading with the highest 
startup rates.
    This is what happens when we have an administration that is 
committed to building an economy from the middle out and bottom 
up. SBA's capital and resource programs are reaching more 
communities and making an impact.
    I have visited thousands of small business owners across 
the nation, including with many in your congressional 
districts, and entrepreneurs continue to inspire inform SBA's 
important work. Small businesses have shared with me their 
future plans and prospects, as well as the challenges that they 
face every day, and finding affordable capital often tops the 
list. In 2023, SBA supported more than $50 billion across our 
lending, bonding, investment, and disaster programs. Our 
reforms helped reverse the decline in small-dollar lending that 
we had been experiencing for 10 years. By simplifying and 
cutting red tape, we have made it even easier to work with the 
SBA and have given greater flexibility to our expanded lending 
network to make the type of small-dollar loans that are key to 
supporting SBA's historically underserved communities, which 
includes rural, low-income, veterans, women, people of color, 
and startups.
    SBA's loans to underserved markets have increased as a 
result of reforms at the SBA. For example, loan numbers and 
dollars to Black-owned businesses have more than doubled. Loan 
dollars--excuse me, loan numbers to Latino-owned businesses 
have doubled and increased to women-owned businesses by 70 
percent. And for the first time in more than 40 years, SBA 
awarded three new licenses in its small business lending 
company program to companies in Alaska, Colorado, and Arkansas.
    SBA transitioned community-based lenders and community 
advantage out of their pilot license into a new permanent CA 
SBLC license. SBA now has 142 community advantage SBLCs, 39 
more than the number enrolled under the pilot program just 2 
years ago.
    Critically, SBA has also prioritized preventing fraud 
across our programs. We put in place best practices for fraud 
prevention, detection, and response. We have also continued to 
work in close partnership with the inspector General and the 
GAO and law enforcement to recover and law enforcement to 
recover stolen taxpayer funds in the COVID pandemic programs. 
Because of our reforms, all SBA loans and our core programs are 
screened for fraud prior to disbursement as part of our 
eligibility check.
    Our aggressive actions and investments mean that SBA is 
more strongly positioned to combat fraud, waste, and abuse 
across our programs, which allows our entire mission-driven 
team at the SBA to focus on delivering entrepreneurial support 
and resources to help more Americans start and grow their 
businesses and recover after disaster. I look forward to 
working in partnership with the Committee to ensure SBA has the 
resources to help advance our communities and the economy.
    Thank you very much.
    Mr. LUETKEMEYER. Thank you, Ms. Guzman, for your testimony.
    We will now move to Member questions, the 5-minute rule. We 
now recognize the gentleman from Minnesota, Mr. Stauber, for 5 
minutes.
    Mr. STAUBER. Thank you, Mr. Chair and Ranking Member 
Velazquez, for holding this hearing today. And thank you to 
Administrator Guzman for appearing today.
    Over the past year, the Small Business Committee has heard 
concerns from real small business owners about the regulatory 
burden they feel from this administration. These unelected 
bureaucrats and backrooms make these rules without care for the 
overwhelming cost to our small businesses. Countless times 
across the SBA's website, Administrator Guzman's name is 
followed by, quote, `` The voice in President Biden's cabinet 
for America's 33 million small businesses.'' Based on the 
regulations out of this administration, it is evident to me the 
complaints from small business owners across America aren't 
being adequately addressed.
    Administrator Guzman, on April 27 of 2022, you testified in 
front of this Committee during my line of questioning that you 
were `` not familiar'' with the Small Business Regulatory 
Enforcement Fairness Act, also known as SBREFA. Are you 
familiar with it now?
    Ms. GUZMAN. Yes, of course I was familiar at the time. I 
don't recall saying that, but SBREFA, of course, I am familiar 
with it. Our Office of Advocacy, which is independent, deploys 
it.
    Mr. STAUBER. Yeah, I recall you saying you had no 
familiarity with it.
    Ms. GUZMAN. Perhaps on the specific issue you were talking 
about.
    Mr. STAUBER. Do you think that you were the voice for 
America's 33 million small businesses when you were completely 
uneducated about a law that protects small businesses from 
burdensome regulations over a year into your administration?
    Ms. GUZMAN. I am prepared and I am very familiar with the 
regulatory process that the federal government----
    Mr. STAUBER. Thank you. Thank you very much. In your 
congressional budget justification, you claimed that in fiscal 
year 2023, your agency helped reduce regulatory burdens on 
small businesses and removed roadblocks that threatened their 
survival. Yet since President Biden's inauguration, the 
administration has issued over 800 final rules costing 
Americans over $475 billion. That's with a B. And as I 
mentioned, however, we have had numerous small business owners 
sit right where you are, Administrator, and testify to this 
Committee that the crippling impact that this administration's 
regulations have had on their businesses. Week after week, we 
have small businesses, folks, men and women, come and talk 
about the regulatory burden that this administration has placed 
on them.
    So, we have you saying you are reducing regulations on 
small businesses and actual small businesses saying they are 
being bombarded with new regulations. Are you suggesting that 
these businessmen and women who paid money out of their own 
pocket to come and testify are not telling the truth?
    Ms. GUZMAN. Of course not, sir. And what I would share with 
you is that the SBA has reduced regulation within its programs. 
Of course, those are the regulations that I have decision-
making on in terms of being the administrator of the SBA.
    You know, we know that----
    Mr. STAUBER. One second, just because time is limited, I 
appreciate that. The SBA has been told repeatedly by its 
Inspector General, the Government Accountability Office, 
independent auditors and Congress that is failing its current 
responsibilities. It has a massive 30-year loan portfolio to 
service. It has unprecedented amounts of fraud to deal with. It 
is wasting time, money, and resources on duplicative programs.
    o make matters worse, the SBA announced on Tuesday that it 
has entered a Memorandum of Understanding with the Michigan 
Department of State to collaborate on voter registration. In 
its announcement, the SBA grasps at straws to connect the Small 
Business Administration's missions to elections. What is the 
Small Business Administration's mission statement?
    Ms. GUZMAN. We serve small businesses and help impacted 
communities post disasters.
    Mr. STAUBER. Would it be help Americans start, grow, and 
build resilient businesses?
    Ms. GUZMAN. That is correct.
    Mr. STAUBER. That is a mission statement, right? What does 
that have to do with elections?
    Ms. GUZMAN. The President's executive order directed 
federal agencies to expand----
    Mr. STAUBER. These are small business--ma'am.
    Ms. GUZMAN.--opportunities to get information.
    Mr. STAUBER. With all due respect, you are the voice of our 
small businesses. They are saying they are not partaking in the 
election. They want to have--grow their business and be 
resilient in America. How do you connect elections to servicing 
or promoting small businesses?
    Ms. GUZMAN. I think we can all agree that we want small 
businesses to vote and be active in this democracy. And, of 
course, providing information on how they can do that is a 
simple process on our website.
    Mr. STAUBER. So, I will ask another question. Articulate 
for me where in the SBA's congressional mandate or its mission 
statement that election work is part of the SBA's 
responsibility.
    Ms. GUZMAN. This is not election work. This is just 
providing information to the public, to the small businesses 
who come to visit our website, giving them information on how 
they could register in their state. That is the extent of the 
SBA's role in this. And, you know, again, you know, the 
President's executive order was clear. The federal agencies 
should work to ensure that we have a strong electoral base and 
people are aware of their options and their ability to vote.
    Mr. STAUBER. Mr. Chair, I am out of time. Thank you very 
much.
    Mr. LUETKEMEYER. The gentleman's time has expired.
    With that, we go to the Ranking Member, Ms. Velazquez, from 
New York, for 5 minutes.
    Ms. VELAZQUEZ. Thank you. Administrator Guzman, in 
testimony before our Committee, IG Ware agreed with an SBA 
report that 86 percent of the fraud occurred in the first 9 
months of the pandemic under the previous administration. What 
antifraud controls did your administration put into place?
    Ms. GUZMAN. Thank you so much, Ranking Member. And I think 
you said it best that we inherited these programs and the 
controls that were put in place at the time, which were de 
minimis. You know, frankly, at the President's direction, the 
first thing he talked to me about was the importance of making 
sure that these funds got into the hands of the businesses they 
were intended to serve. And that's what we focused on doing at 
the SBA, implementing controls on the front end so that we 
could strengthen our portfolio, making sure we were fully 
underwriting COVID EIDL and checking for fraud across the 
portfolio, especially, of course, on all our new programs as 
well, where we have incredible performance of less than 1 
percent fraud.
    We, in addition, created a Fraud Risk Management Board, so 
that we could have longevity for some of these fraud controls, 
risk frameworks that we have put into place on our core lending 
programs, as well as on these disaster loan programs. The GAO 
and the IG have both testified before this Committee, asserting 
that the SBA is in the best position that it has ever been as a 
result of these efforts to address the GAO and IG's concerns 
and institute sustainable fraud risk frameworks for the agency.
    Ms. VELAZQUEZ. Thank you. In fiscal year 2023, SBA serviced 
2.5 million COVID-19 EIDL loans, 10 times the amount of 
disaster loans the agency was doing before the pandemic. What 
specific steps have you taken to improve customer service and 
be responsive to borrowers?
    Ms. GUZMAN. Not only did we focus on strengthening the 
portfolio, those incoming loans, and making sure that we are 
preventing fraud at the front end, but in addition, we wanted 
the customer service on the back end. So My SBA, which you 
referenced in your testimony, obviously was our investment in 
technology to streamline the servicing of these nearly 4 
million in total loans that the SBA is now managing for 30 
years, as our Vice Chairman mentioned.
    So, My SBA provides an enhanced customer service. It has 
enabled us to continuously communicate with these borrowers and 
ensure that the performance of the portfolio is strong.
    Ms. VELAZQUEZ. What type of challenges are you facing, and 
what do you need from Congress to ensure this effort is a 
success?
    Ms. GUZMAN. These COVID pandemic programs are not in our 
baseline budget, which is why you see an increase. We are 
requesting funding to continue to maintain these nearly 4 
million in loans that the SBA is now responsible for servicing 
at this point and collecting on for the American people. And so 
that additional funds will help us support that, as well as the 
continued performance around PPP, the Restaurant Revitalization 
Fund, Shuttered Venues, all of our COVID programs to ensure 
that we are continuously reporting and servicing these small 
businesses.
    Ms. VELAZQUEZ. Thank you. The timeframe to obtain 
certification for SBA's contracting programs varies. Veterans 
can receive certification in a few weeks, while women can wait 
for 9 months. Is a budget request of $6.2 million sufficient to 
hire the personnel you need to administer the WOSB program and 
bring wait times in line with the other programs? It is great 
that we go out there and meet with women-owned businesses and 
promise that we will do everything we can to help them grow 
their business, and move those businesses to the next level, 
but it takes money and resources for SBA to pay the attention 
that it needs in providing the resources to the WOSB program.
    Ms. GUZMAN. And, you know, this transfer of the veteran 
certification to the SBA from the VA enabled SBA to, you know, 
rethink how it certifies these businesses. VetCert is the gold 
standard. We intend on investing in technology across all our 
certifications to streamline access. We recognize the backlogs 
and lengthy times that women face in order to get certified to 
get those set-asides in government contracting.
    So, we, this year, are investing in technology to 
streamline, aligns with the VetCert program. And we believe 
that this funding is sufficient in order for us to perform that 
simplification and clear the backlog. And we have doubled down 
on our staffing, too, temporarily to clear that backlog.
    Ms. VELAZQUEZ. Five years ago, the director of the Office 
of Credit Risk Management testified that the office was 
increasing its personnel to 42 FTEs to better fulfill its 
mission. How many employees does OCRM currently have? Are you 
confident the office has the resources it needs to conduct 
oversight of the new SBLCs?
    Ms. GUZMAN. Within the last several months, we have been 
able to increase our staffing. We are now from the now in 35, 
and we continue to have open positions that we are filling 
aggressively. This is one of the top priorities. We want to 
give them their full capacity. We, of course, have invested in 
technology. We have partners to ensure that our oversight of 
our lenders is strong, and OCRM is currently doing that.
    Ms. VELAZQUEZ. Thank you. I yield back.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, we will go to the gentleman from Pennsylvania. 
Mr. Meuser is recognized for 5 minutes.
    Mr. MEUSER. Thank you, Mr. Chairman, very much. Thank you, 
Administrator. Good to see you.
    One of the concerning topics that I have, and before this 
Committee, was the rule change on the SBA regarding small 
business lending companies where a lender will receive the 
government guarantees when underwriting small businesses. When 
you testified here last year, March 23, 2023, you assured us 
the SBA had sufficient oversight capabilities. In fact, 
responding to a question from Ranking Member Velazquez, who 
asked, have you heard concerns with allowing--have you concerns 
with allowing unregulated companies associated with significant 
fraud into a federally guaranteed program? Your response was, 
and I am paraphrasing, I know that the SBA has a rigorous 
application process, so I am not concerned and we intend to 
hold any business that wants to participate to their 
performance, to their underwriting standards for transparency, 
et cetera.
    So, not soon after that--well, let me ask this. In your 
view, are all companies subject to this rigorous application 
process in light of the example of Funding Circle, where the 
CEO recently, 2 weeks ago, stated how all of their losses, 
their mounting losses, which have existed for the last couple 
of years? And, Mr. Chairman, I would like to submit their 
income statement for the record, Funding Circle.
    Mr. LUETKEMEYER. Without objection.
    Mr. MEUSER. Thank you. It would require significant 
capital. He says, I mean, you saw all of our losses over the 
last several years. So, the SBA program, what we don't believe 
will be the best use of our capital to invest in those loans in 
the U.S. business. So it is a pretty easy question to ask, why 
would the SBA approve such an organization that had such 
mounting losses and, in the end, an unwillingness even to 
serve, when, by the way, it was just one of three that was 
approved? It wasn't like there were 400 and this was one. This 
was one of three. So, if you would explain.
    Ms. GUZMAN. Yes, I would. And Funding Circle, just for the 
record as well, is fully capitalized in its U.S. operations 
based in Colorado. And so, you know, they are in a strong 
position in terms of being able to deliver against their 
mission of small-dollar lending.
    They continue to work with the SBA in the licensing 
process. It is not finalized at this point. Obviously it was 
awarded, but they still have to go through our rigorous 
application process, and we still are continuing to work with 
them. Their intention is to start lending with the SBA program 
in the coming weeks.
    Mr. MEUSER. Well, do they own it? So, in other words, if 
they intend to sell their U.S. business, can they also sell 
their SBLC license?
    Ms. GUZMAN. We have currently, and for years, for decades 
now, 14 SBLCs that have turned hands. They go through the same 
rigorous, you know, licensing process when those licenses are 
sold. So it would be the same process.
    Mr. MEUSER. With all due respect----
    Ms. GUZMAN. It would be the same process.
    Mr. MEUSER.--you continue to say the due diligence on 
choosing them was rigorous.
    Ms. GUZMAN. And they have intended to maintain that license 
within their U.S. operations.
    Mr. MEUSER. You do recall that we had issues, both sides, 
everyone here, on the speed that we were moving forward with 
such licensing, and then, yet we are pointing out a failure 
from one of three. And it just--you can't help but bring back 
last year's testimony where everyone in this Committee had real 
concerns about the speed and why this was being done as quickly 
as it was. In fact, Patrick Kelly sat here telling us how 
important it was to move forward with these companies. And 
meanwhile, it clearly, in this case, did not work out either.
    Ms. GUZMAN. The 14----
    Mr. MEUSER. Didn't work out for him either.
    Ms. GUZMAN. So, to take us back a little bit to that, too, 
note that we have still persistent gaps in the marketplace for 
startups, for underserved markets overall, in rural deserts 
around the country. Our SBLCs perform, those 14 that have 
historically been performing, perform to fill market gaps. Our 
goal is to expand that program, adding three licenses for the 
first time in 40 years on an existing program. We viewed that 
as a responsible expansion, not opening the floodgates, but 
obviously a responsible expansion by adding three new lenders 
into the program. And we are comfortable to continue to work 
with Funding Circle's U.S. operations.
    Mr. MEUSER. Well, hopefully, the level of comfort isn't as 
high as it was before. Hopefully, there is some healthy 
paranoia taking place that we don't want this to happen again.
    I want to ask you about something else I find very 
concerning, and that is the President's executive order on 
demanding and helping people, however you want to put it, 
businesses, encouraging them to register and to vote and et 
cetera. Can you provide this Committee every email and every 
official correspondence to small businesses and interagency on 
those discussions related to requesting, enticing companies to 
register?
    Ms. GUZMAN. I will put in that request to my team and we 
will follow up with you directly. Yes.
    Mr. MEUSER. Thank you. I yield back, Mr. Chairman.
    Mr. LUETKEMEYER. The gentlemen yields back. The time has 
expired.
    With that, we go to the gentlelady from Washington, 
Representative Gluesenkamp Perez, recognized for 5 minutes.
    Ms. GLUESENKAMP PEREZ. Thank you, Vice Chairman 
Luetkemeyer, a fellow challenging last name. And thank you to 
Administration Guzman.
    Mr. LUETKEMEYER. Did I get close?
    Ms. GLUESENKAMP PEREZ. That was right on the head of the 
nail.
    Mr. LUETKEMEYER. Thank you.
    Ms. GLUESENKAMP PEREZ. Yeah, thank you. And thank you, 
Administrator Guzman, for being here with the Committee today 
and for your work on behalf of small businesses across the 
country.
    Last year, at just about this time, you came to testify in 
front of this Committee, and I told you about my experience 
with our auto shop, spending a year trying to navigate the 504 
loan program. And that program was truly a vital source of 
capital for our business and in maintaining trades businesses. 
Right? All the other businesses were getting bought out and 
turned into coffee shops and tattoo parlors. And so being able 
to maintain an independent auto shop in so many communities is 
critical. So, we are pleased that this avenue of capital is 
available to people working in the trades who don't have 
another avenue.
    What is the administration doing to make the experience 
more navigable for first-time entrepreneurs who don't have a 
year to follow up to spend on this process?
    Ms. GUZMAN. Yes, I completely agree. The 504 program is a 
vital asset builder for small businesses around the country and 
for sustainability in neighborhoods as costs increase, buying 
their building or buying equipment. And it is critical with 
these investments, whether it is chips, infrastructure, or the 
Inflation Reduction Act, as businesses need heavy investment 
capital to move forward.
    We have streamlined our regulatory process on both 7(a) and 
504. Really trying to work to make sure that the lenders have 
easier processes and more certainty around their guarantee as 
well by simplifying the affiliation component. That was the 
number one reason for denials. It was really a very confusing 
process previously, but we have also deferred to their 
underwriting standards and best practices as well.
    So, these have been very well received by the trade 
organization that represents the 504 lenders and ADCO. They are 
very excited as well to see the layering of the community 
advantage SBLCs that many of them are colicensed as. And so I 
believe that this will continue to enhance our 504 programs.
    But we do need to do more outreach and awareness and thus 
the expansion of our networks, our entrepreneurial ecosystems, 
to include navigators to help direct more businesses to the SBA 
as an alternative is something we are also focused on.
    Ms. GLUESENKAMP PEREZ. That is great. Last year we talked 
about the MySBA.gov portal and its goal to give a single point 
of entry for businesses to perform the things they need. Can 
you give us an update on the improvements made to the system 
over the past year and how is it serving businesses?
    Ms. GUZMAN. Our goal is to simplify the customer experience 
for the small businesses. The President's executive order on 
customer experience, you know, direct specifically some of our 
programs on this, including the unified lending platform where 
servicing happens, where now disaster lending happens. 
Recently, with the Western Governors Association in Oregon, the 
governor said, you know, after the ice storms, businesses and 
individuals got their money within 2 days thanks to this new 
system. So that is one of the experiences.
    The other is VetCert, and our goal is to add on the other 
programs of the SBA into this single door entry for our small 
businesses so that it can be enhanced.
    Ms. GLUESENKAMP PEREZ. Great. The SBA also recently 
launched the Lender Match program, which according to SBA press 
release, features nearly 1,000 lenders, 257 community-based 
lenders, who can connect to potential customers and earn their 
business. But I am concerned because I have also heard from 
small business community banks that are in the process of 
getting certified for SBA lending that the process is onerous 
and time-consuming. I am wondering what considerations are 
being made in the program for small community banks who may 
have limited staff capacity. Can you share generally and 
briefly what the administration is doing to make sure community 
banks are able to participate in SBA lending?
    Ms. GUZMAN. Yes, 100 percent and this is one of our top 
priorities. Eighty-three percent of the PPP lenders hadn't done 
an SBA loan in 5 years. Those are the small community banks. We 
wanted to simplify our regulations and cut red tape for them.
    Lender match is an incredible tool that we wanted to level 
the playing field in as well. And so what we have done is added 
on our prescreening for fraud and eligibility, which we have 
deployed across our 7(a) portfolio into the Lender Match 
system, so that we could give these lenders more qualified 
leads, and not just cold leads. So that should streamline their 
ability to review and vet the 50,000 businesses we get there 
every month.
    The second thing, though, was to allow for a 48-hour 
waiting period, because the larger institutions have staffing 
that just are dedicated to Lender Match to be able to get those 
leads. And clearly, we want everyone the opportunity to go 
after any prospects or their own borrowers in many cases. So 
that was the goal in this recent upgrade.
    Ms. GLUESENKAMP PEREZ. Thank you very much. I yield back.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, go to the gentlelady from Texas. Ms. Van Duyne 
is recognized for 5 minutes.
    Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
    Administrator Guzman, you are aware of the document 
requests, that we have sent four letters to you on the decision 
surrounding this some $100,000 portfolio, right?
    Ms. GUZMAN. Yes.
    Ms. VAN DUYNE. So, you are aware?
    Ms. GUZMAN. Yes, correct.
    Ms. VAN DUYNE. Well, it is interesting, because many of the 
documents that you have provided us have been nonresponsive to 
our requests. In fact, SBA has continually missed deadlines and 
they have produced irrelevant documents in response to 
Committee requests. And by the way, I really appreciate the 
$4,000 document drop--that 4,000-page document drop that you 
gave to us Friday night on--it is incredible that all of a 
sudden, it has taken a year, but we got 4,000 pages Friday 
night right before this hearing. But only 20 percent of what 
you have produced this Committee over the last year was 
actually responsive.
    And let's talk about this April 2022 memo, which confirms 
your decision to end collections on PPP and COVID EIDL loans 
less than 100,000. And I am going to use the term `` end 
collections'' because that is the phrase that is written on the 
document that we are discussing, and that decision is the 
subject of this investigation. As you are well aware, both the 
OIG and this Committee found that this April 2022 memo provided 
insufficient justification for the decision to end collections 
on delinquent debt value at 100,000 or less. And that was under 
the Debt Collection Improvements Act. The SBA produced three 
additional documents analyzing the PPP portfolio, but evidently 
did not have additional analysis for the COVID EIDL.
    So, let's discuss the substance of this memo. It says, `` 
The most cost-effective means to protect the government's 
financial interest is to end collections, including Treasury 
referrals on the subject loans.'' You have repeatedly said that 
this memo simply meant no referrals to Treasury, but that is 
clearly not what the memo stated.
    You said the cost of the final step in the loan process, 
referrals to Treasury, was too high. And later you actually, I 
think, detailed that cost as being somewhere between 300- and 
$500 million a year.
    So, you hired a consultant in 2021 to analyze the whole 
COVID EIDL portfolio and to make recommendations. They 
recommended that you sell either all or parts of the portfolio, 
potentially getting as much as 50 cents on the dollar, but you 
didn't sell. Why?
    Ms. GUZMAN. That was one of four studies, and we take the 
collections very seriously at the SBA. As you alluded to, that 
stated to end collections at the ninth step. We had, obviously, 
proceeded a step.
    Ms. VAN DUYNE. But I am asking, why didn't you take the 
advice of someone that you actually paid taxpayer dollar to do 
an analysis?
    Ms. GUZMAN. There were four analyses. And keep in mind that 
this is----
    Ms. VAN DUYNE. Did any of them suggest that you not sell?
    Ms. GUZMAN. Yes, the first study, which under DCIA, I 
engaged in my authority to not refer to Treasury the first 
time. However, the subsequent studies did suggest that there 
could potentially be upwards of a $100 million collected.
    Ms. VAN DUYNE. So, I better reclaim my time. Because just a 
few months after you received the recommendation to sell, you 
said that the under 100,000 portfolio was not collectible. So 
did you reconsider the sell then?
    Ms. GUZMAN. As I shared with some of your fellow Committee 
Members when they visited the SBA, the cost to see the SBA's 
portfolio----
    Ms. VAN DUYNE. I don't--I am just asking, yes or no, did 
you reconsider the sale then?
    Ms. GUZMAN. We have considered all of the studies' 
analyses, yes.
    Ms. VAN DUYNE. Okay. So every day that passes, the value on 
these loans diminish. Selling the portfolio could have gotten 
you as much as 50 cents on the dollar, which is a lot better 
than the nearly zero that your April 22 memo actually said you 
expected to collect.
    Back to the decision not to collect these loans. When you 
reversed the decision in December '23, you provided an update 
for PPP at $23.9 million with an unexpected recovery of $128.5 
million. During a briefing with the Committee staff, SBA told 
us they didn't have a specific cost for COVID EIDL at this 
stage. That was January of this year. Do you have an updated 
cost analysis?
    Ms. GUZMAN. We have, based on the updated cost analyses, we 
have started the process of referring to Treasury and we have 
been paying under----
    Ms. VAN DUYNE. So, do you have a cost analysis now? Because 
this is over a year ago.
    Ms. GUZMAN. For selling the portfolio?
    Ms. VAN DUYNE. For COVID EIDL versus just the PPP.
    Ms. GUZMAN. For COVID EIDL we have the four studies that 
are guessing at the analysis.
    Ms. VAN DUYNE. Okay. So, but that doesn't----
    Ms. GUZMAN. Remember that this is an unprecedented 
portfolio----
    Ms. VAN DUYNE. But there are two studies----
    Ms. GUZMAN.--with very different parameters for under it.
    Ms. VAN DUYNE. You paid for immense analysis on the PPP 
program, but you haven't done it on the EIDL program. There's 
no actual written comparison, was there, between PPP and EIDL?
    Ms. GUZMAN. And we have continued collection on these.
    Ms. VAN DUYNE. So, was there an actual written comparison 
between PPP and EIDL? Because if you had it, we have requested 
it and we haven't gotten it.
    Ms. GUZMAN. We have done four analyses trying to compare as 
best as we can this unprecedented portfolio----
    Ms. VAN DUYNE. PPP, but not EIDL.
    Ms. GUZMAN.--to performance of other small business 
portfolios.
    Ms. VAN DUYNE. PPP, but not EIDL.
    Ms. GUZMAN. And we have made the decision to----
    Ms. VAN DUYNE. So, if the COVID EIDL is indeed more 
collectible, because that is what we have been told, even if 
PPP was not worth collecting, EIDL may have been. So, 
subsequent analysis was done on the collectability. We have 
seen that a number of times, but we still haven't seen it on 
EIDL. So, the analysis supporting your decision to end 
collections has been deemed inefficient under the Debt 
Collection Improvement Act by OIG, KPMG, and this Committee. 
And yet there was no subsequent analysis done on the COVID 
EIDL.
    Ms. GUZMAN. And as all of these loans have started their 
process----
    Ms. VAN DUYNE. So, I am going to reclaim my time----
    Ms. GUZMAN.--being referred to Treasury----
    Ms. VAN DUYNE.--because I am almost out of it.
    Ms. GUZMAN.--that is irrelevant.
    Ms. VAN DUYNE. What I am hearing you say is you have 
stonewalled congressional oversight. You incurred the cost to 
collect these loans by taking all the collection actions, but 
you didn't actually collect the money, because, as you just 
said, you didn't refer them to Treasury. So, though----
    Ms. GUZMAN. We have referred them to Treasury.
    Ms. VAN DUYNE.--independent agencies pointed out that you 
violated the Debt Collection Improvement Act by not referring 
these loans to Treasury, you ignored them. You have wasted 
billions upon billions of taxpayer dollars not only by delaying 
these decisions over the last 2 years, but with poor decision-
making. Unbelievable.
    I yield back.
    Ms. GUZMAN. These loans have been referred to Treasury and 
we are collecting on them. In fact, we have, you know----
    Ms. VAN DUYNE. I yield back.
    Ms. GUZMAN.--more than two X'ed our ability to collect on 
those small dollar loans.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, go to the gentleman, the representative from New 
Hampshire, Mr. Pappas, for 5 minutes.
    Mr. PAPPAS. Thanks very much, Mr. Chairman. And, 
Administrator, great to see you here. Always happy to have you 
back in New Hampshire. You have visited many times, and I 
appreciate the local focus that you bring to your role. I think 
it's important for anyone in Washington to continue to 
understand that solutions just don't come from this place. They 
come from our main streets. And I think you have demonstrated 
that through your work.
    As you know, SBA's disaster loan program was created to 
help communities recover after a disaster by providing low 
interest loans to businesses and homeowners. The seacoast 
region of my district has been devastated by extreme weather 
events, and they have been able to access economic injury 
disaster loans that were made available to small businesses in 
that part of the state earlier this year. But more rural 
communities that I represent may not know about the disaster 
assistance that SBA provides.
    I know that SBA has been working on new outreach 
programming to rural communities, like portable help centers 
that can be set up in more remote areas. But my understanding 
is that none of these efforts are specifically designed to meet 
the needs of rural communities.
    So, I am wondering, in the wake of a GAO report that said 
that there is no specific rural outreach, how SBA plans to move 
forward with strengthening its disaster planning to ensure that 
it is meeting the needs of all of our communities.
    Ms. GUZMAN. Thank you for that question, and I am very 
proud of our ability to innovate in the disaster space with our 
improved lending platform. But we definitely want to get the 
awareness out there.
    A couple of things. With the Rural Communities Act, we did 
enact a new process for which governors can declare rural 
disasters when it doesn't rise to the level of a federal 
disaster. And that streamlines the process for governors to be 
able to declare a disaster, only identifying one, you know, 
house or business that has been harmed, and so--versus five. 
And in rural communities, sometimes that is very difficult and 
requires miles of travel. So that is the first thing. And we 
have had 14 declarations and have been reaching out to all the 
governors in the Offices of Emergency Management to ensure that 
they are aware of this streamlined process. And so far, the 
response has been very positive.
    We have also entered into an MOU with the USDA to ensure 
that we are reaching out to rural communities, not only on 
disaster, but as well on our small business programs, on 
capital access, on exporting. And this Rural Prosperity tour 
that we have launched at the SBA has, you know, begun in three 
states, and we are continuing to expand, and I am looking 
forward to continued travel on that myself personally, to try 
to build awareness around all of our programs. But when a 
disaster happens, whether it is rural declared by the governor 
or federal, the SBA immediately deploys on the ground. And we 
have tried to be as aggressive as possible with portable 
operations centers as well as extensive outreach in multiple 
languages.
    Mr. PAPPAS. Well, thank you for your comments there.
    Switching gears, today happens to be National SBDC Day, and 
I know I asked you last year about this same issue with a 
proposed cut for SBDCs across the country. I know in my state, 
our Small Business Development Center helped businesses access 
more than $37 million in new capital, increasing their sales by 
$26.4 million in 2023 alone. So, despite this performance, the 
proposed budget would reduce SBDC funding by $105,000 in my 
state alone. That could mean the loss of an entire center and 
decreased coverage in underserved and rural areas.
    So, we did talk about this in the wake of last year's 
proposed cuts. That did not come to fruition, thankfully. But I 
am wondering, given the impact of SBDCs across the country, 
$6.8 billion of the $7 billion in capital provided by the 
resource partners are through our SBDCs. Why does it make sense 
to reduce funding for the best performing program in terms of 
resource partners?
    Ms. GUZMAN. The SBDCs, you know, I always praise. They do 
an incredible job serving small businesses. On a recent trip 
that I went to Michigan, there was a restauranteur who 
literally brought the SBDC alongside because they helped them 
at every step of their journey, including accessing capital. On 
that same exact trip, I met another business that did not want 
to use the SBDC, that didn't feel that it was for her.
    Whether it is a university-based system or what have you, 
our SBDCs do an incredible job of serving the 326,000 
businesses they served last year. But the other 32.7 million 
need alternatives and entrepreneurial ecosystems on the ground 
that meet them where they are and bring them back into SBA's 
ecosystem. And that is why we are trying to incentivize the 
development of new ecosystems around the country. Community 
navigators is that example where we are trying to ensure that 
there are alternatives to bring people back to the SBA, in 
fact, most likely back to an SBDC. But we need to reach more 
businesses and definitely go beyond the reach of our current 
resource partner network that in total reaches about 500,000 
every year.
    Mr. PAPPAS. Well, I would just say in my neck of the woods, 
our SBDC is firing on all cylinders. They are essential. And if 
it ain't broke, you know, I don't think we need to fix it or 
pull funding away. So I would urge you to reconsider that.
    But I yield back my time. Thank you.
    Mr. LUETKEMEYER. The gentleman's time has expired.
    With that, we go to the gentlelady from Florida, 
Representative Salazar, recognized for 5 minutes.
    Ms. SALAZAR. Thank you, Mr. Chairman. And thank you to you, 
Administrator Guzman, for being here with us. And last time we 
spoke was at your office in December, where we went to your 
office to review and to visit the headquarters. So thank you 
very much for having us there and showing us around.
    I just want to concentrate on something major, which is 
that most federal government agencies, like the SBA, are 
required to have an annual independent audit, just like 
publicly traded businesses do so in the private sector. Right? 
And this past year, the SBA retained a very major, important 
consulting firm by the name of KPMG. Highly respected, widely 
trusted, so we are in good hands. Unfortunately, KPMG found not 
too many good things when they did the SBA audit. And I am 
going to tell you three that were found: inadequate loan 
process reviews, poor recordkeeping, and legal compliance 
issues.
    Did you study thoroughly, are you abreast, are you aware of 
everything this very important company said about your agency?
    Ms. GUZMAN. Yes, and I have met directly with KPMG, who was 
retained by our independent Inspector General, of course, to 
perform this audit. Those findings were regarding the COVID 
portfolio, which, again, was established in 2020. When I came 
in in 2021, my focus, at the President's direction, was to 
ensure that we had strong fraud risks and controls. 
Unfortunately, those findings stand on the existing 2020 
portfolio.
    Ms. SALAZAR. So, that means that these findings do not show 
your performance as an administrator?
    Ms. GUZMAN. No, because----
    Ms. SALAZAR. You have no responsibility for what the 
findings found?
    Ms. GUZMAN. I take responsibility for SBA's programs and 
operations----
    Ms. SALAZAR. All right, so they are right there.
    Ms. GUZMAN.--for 2021 and what----
    Ms. SALAZAR. So, which one of the findings--but wait.
    Ms. GUZMAN. Mm-hmm.
    Ms. SALAZAR. You have been there for 3 years. This review 
or this study was conducted in November of '23. So, You were 
there, '21, '22, '23. Which one of these findings is the most 
damaging to you as an administrator?
    Ms. GUZMAN. I view----
    Ms. SALAZAR. You got to own something.
    Ms. GUZMAN. I view all of the findings--well, they are on 
the COVID pandemic programs.
    Ms. SALAZAR. Okay.
    Ms. GUZMAN. The COVID EIDL, PPP, obviously, that were 
established without controls, we instituted guardrails. And 
you'll note in the KPMG audit, they recognize our progress 
against all of these. My team has been working very diligently 
to ensure that we are implementing strong controls and also 
situate the SBA, so that----
    Ms. SALAZAR. Yeah, but, you know----
    Ms. GUZMAN.--we will never----
    Ms. SALAZAR.--when you tell me----
    Ms. GUZMAN.--have this problem again.
    Ms. SALAZAR. When you tell me, yeah, I have done it, I 
mean, you know, just give it to me in one sound bite. You were 
there for 3 years. They came in in November '23. They are 
saying that things are not the way they are supposed to be. So 
where does your responsibility fall?
    Ms. GUZMAN. And my responsibility lies in fixing the 
problems that were established when the COVID pandemic programs 
were established in 2020. And that is what we have been doing, 
and we have been making incredible progress as KPMG, the IG, 
the GAO will all attest to that.
    Ms. SALAZAR. Wait, wait, wait. The IG has said that we 
missed $20 billion--I am sorry, $200 billion. So, I am just 
trying to understand your leadership. How good has it been or 
not for the agency based on this report by these independent 
people?
    Ms. GUZMAN. The 200 billion----
    Ms. SALAZAR. I don't hear--I just don't hear where, you 
know, where do you own responsibility?
    Ms. GUZMAN. I own responsibility in the reforms that we 
have implemented that have stopped and thwarted over $500 
billion, 21 million attempted frauds, attempts against the 
agency and these COVID programs.
    Ms. SALAZAR. Did you fire anybody?
    Ms. GUZMAN. I own responsibility----
    Ms. SALAZAR. Did you fire anybody?
    Ms. GUZMAN. The----
    Ms. SALAZAR. Inadequate loan process, poor recordkeeping, 
legal compliance issues. Is everyone that committed these 
crimes to our small business community are still there making a 
living or getting a paycheck?
    Ms. GUZMAN. The leadership that made the decisions around 
the 2020 implementation of the COVID pandemic programs served 
in the previous Trump administration and are no longer there. 
My responsibility is to figure what's needed----
    Ms. SALAZAR. No, no, I am asking you specifically----
    Ms. GUZMAN.--and improve those problems.
    Ms. SALAZAR.--anyone who was there during the pandemic and 
was responsible for these faults, are they still there? Yes or 
no.
    Ms. GUZMAN. The responsibility is with the leadership and 
the leadership----
    Ms. SALAZAR. You are leadership----
    Ms. GUZMAN. I am.
    Ms. SALAZAR.--but you just told me that you came after 
pandemic.
    Ms. GUZMAN. I am responsible for fixing the programs, not 
for creating the control issues that were established in 2020. 
However, I took----
    Ms. SALAZAR. But you are not answering me.
    Ms. GUZMAN.--responsibility for correcting them----
    Ms. SALAZAR. Did anyone pay----
    Ms. GUZMAN.--which I have done.
    Ms. SALAZAR. Is anyone responsible? Has anyone lost their 
job because of their lack of good leadership?
    Ms. GUZMAN. The 2020 Trump administration people who made 
the decisions are no longer there at the agency.
    Ms. SALAZAR. I yield back. Thank you.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, go to the representative, Mr. McGarvey, from 
Kentucky, for 5 minutes.
    Mr. MCGARVEY. Thank you, Mr. Chairman. Thank you for being 
with us today, Administrator Guzman.
    We have had a lot of hearings in this Committee on pandemic 
relief fraud, and good. None of us likes fraud in this program. 
All of us want to see this money recouped. At least I am glad 
this time they scheduled a hearing when you could be here to 
respond, which is a nice change.
    Let's think about where we were 4 years ago today. I think 
it is important to remember where we were. People were dying in 
hospital hallways. People were hunkered down in their homes, 
scared, rationing toilet paper. You had small businesses across 
this country who had no idea if or how they could survive. I 
was getting calls in the state senate in Kentucky from 
restaurant owners, from people in my hometown just scared. And 
you know what? Fortunately, Washington acted. And the Congress, 
let's give credit where it is due. The Trump administration got 
relief out to our small businesses. They saved our main 
streets. They saved our businesses. It saved our economy, which 
is how we recovered so much faster than everyone else in the 
world.
    And look, are there going to be problems with something 
like this? Yeah, and there were. But we are focusing so much on 
the bad news that we fail to recognize that the SBA's relief 
programs were an unmitigated success.
    So, we need to talk about some of this fraud, right? How 
did it happen? Well, let's be honest about it. In standing up 
our businesses, the Trump administration rolled back the 
internal controls meant to prevent fraud in our loan programs. 
Why? Well, our small businesses needed relief and they needed 
it quickly. But it shouldn't be a surprise that when you remove 
these regulations, it opens the door for bad actors. And that 
is why 86 percent of the likely fraud in these programs ended 
up occurring in the Trump administration.
    Did you serve in the Trump administration?
    Ms. GUZMAN. No, I served during the Obama administration 
and the Biden administration, so 9 years.
    Mr. MCGARVEY. Okay. So, it didn't happen on your watch. And 
ironically, here we are right now in a hearing when my 
colleagues are complaining about regulatory burdens while 
simultaneously questioning you on what happens when you roll 
back those burdens and the fraud occurs.
    So, since then, we have taken a long number of antifraud 
controls, taken the steps to reduce the fraud, and it has 
resulted in billions of dollars in relief being seized or 
returned to the federal government. And we know now both the 
OIG and the GAO have testified in front of us confirming the 
SBA's commitment to recovering fraud and improving these 
programs, which is good. We all want to recover fraud that was 
given out. So, we appreciate your efforts in those regards.
    You know, I am from the South, and maybe we need some more 
people from across the aisle, from the southern part of this 
country, because we still have manners. And you have been asked 
a question a number of times and not been given the chance to 
actually answer. I would love to hear an answer about, in 
November of 2023, when the Funding Circle was awarded one of 
the three new SBLC licenses to help support small businesses 
and increase access to capital for business owners in 
underserved markets. We know the U.K.-based lenders started 
making 7(a) a loans this year, but they are now offloading 
their U.S. small business lending operations. How does this 
impact your vision for SBLC operations?
    Ms. GUZMAN. The SBA is proud of the 14 existing SBLCs, as 
well as the nearly 140 additional CA SBLCs, those community 
advantage lenders. The program is strong and working to fill 
gaps in underserved markets.
    The Funding Circle is the last of the three newly awarded 
SBLCs that has not started doing lending. We are still in the 
process. The other two were what we call NFRLs. These were 
previous state-chartered entities working with SBA products, 
and so they streamlined. And Alaska and Arkansas have already 
started to do loans. We are excited to bring on lenders who are 
focused on small-dollar loans where our current lenders are 
unable to fill the demand.
    Funding Circle continues to work with the SBA, my team, to 
fulfill the SBLC license and ensure that they can start lending 
with SBA products in the community. They were a strong 
performing PPP lender, really getting hands into those smallest 
of the small businesses, focused on making sure that they could 
survive during the pandemic. So, you know, that is still in 
process.
    We are still going through the steps that are necessary for 
them to, you know, meet all of our standards at the SBA, and 
when that is complete, we can inform the Committee.
    Mr. MCGARVEY. Thank you. And very quickly, the SBA retains 
authority to approve or not approve the sale of licenses. 
Should the Funding Circle choose to sell the license to the 
entity you don't support, would you commit to not approving the 
sale?
    Ms. GUZMAN. That is correct. We have done it in the past. 
We have denied sales in the past.
    Mr. MCGARVEY. Thank you. I yield back.
    Mr. LUETKEMEYER. The gentleman's time has expired.
    With that, go to the gentleman from Florida. Mr. Bean is 
recognized for 5 minutes.
    Mr. BEAN. Thank you very much, Mr. Chairman. Good morning 
to you and good morning, Administrator Guzman. It's good to 
have you here.
    On December 8, 2022, SBA suspended auto analytics, which 
was doing business as Womply, from engaging in any actions 
related to the SBA loan programs. That suspension was later 
extended through December 3, 2023. Earlier this week, the 
director of the Federal Trade Commission's Bureau of Consumer 
Protection said Womply deceived small business owners trying to 
secure loans at their greatest time of need. They have reached 
a settlement with the FTC where Womply and its CEO were ordered 
to pay $26 million to small businesses harmed by the company's 
actions. In fact, we have heard from lenders who say they were 
partnered with Womply at the behest of the SBA. Those lenders 
are now on the books--on the hook for the Treasury Department 
for the fraudulent loans Womply processed for them, and in 
return, Womply is seeking to collect the referral fee from 
these lenders.
    What is the status of that suspension of Womply? It says 
here that they were, at least my report says they were 
suspended through December 3. Are they still suspended?
    Ms. GUZMAN. We extended the suspension and Womply remains 
suspended.
    Mr. BEAN. Very good. What do you say to the lenders who 
have worked with SBA for years and have been great partners, 
but now being forced out of business because of the actions of 
Womply and others like them?
    Ms. GUZMAN. Womply was a technology provider to banks, to 
CDFIs, to these private lenders as well, and it is unfortunate. 
I know that is a current case, so my, you know, comments will 
be limited. But note that they continue to be, you know, 
prohibited from accessing or engaging in SBA lending 
whatsoever.
    And of course, you know, SBA has worked diligently to try 
to deliver on the promise of forgiveness to those lenders who 
acted in good faith. And we have 96 percent of the portfolio 
forgiven at this point under PPP. And we will continue to try 
to work to follow all the laws and follow the guidance.
    Mr. BEAN. Will you commit, they have done some bad things, 
but will you commit that they should never come back in any 
type of space or lending space of the SBA?
    Ms. GUZMAN. We will continue to make sure that they are 
suspended from ever engaging in SBA's programs.
    Mr. BEAN. Something that we all came together as a 
Committee here not too long ago was we passed the We Want Our 
Money Back Act, which says that we want to keep all of these 
fraudulent loans that were made fraudulently, we want them on 
the front burner. We want reports from the folks watching it 
out for them. We have no plans to forgive any of these types of 
loans that were made fraudulently. You wouldn't want to forgive 
loans that were made fraudulently. We are going to go back and 
get them. Is that right?
    Ms. GUZMAN. We are going after all fraud. We have referred 
all fraudulent loans to the IG and the Department of Justice 
and law enforcement who are pursuing all fraud at the SBA. And 
we support, with--it is part of why SBA needs more funding. We 
actually support the Inspector General in those investigations 
and invest a lot of time to fight fraud.
    Mr. BEAN. Thank you. Thank you. Your Office of Credit Risk 
Management sent emails to a large number of PPP lenders saying, 
hey, did you find any fraud? Are you aware of any fraud? Let us 
know. So it is sort of like an investigation that you are 
doing. Can you talk about the status of that investigation? 
Have you found additional fraud through your inquiring of banks 
and other lenders?
    Ms. GUZMAN. We have done an exhaustive study of our 
portfolios. We identified $400 billion in potential fraud and 
have now narrowed it down. My team likens it to walking through 
TSA and with your belt buckle, the, you know, alarms go off. 
That is the initial, you know, fraud check. But then once you 
get down into the portfolio and do further analysis, which we 
have done with not only technology, but actual manual reviews, 
we have narrowed the fraud down to $36 billion. Now, within 
that----
    Mr. BEAN. That is a big number difference----
    Ms. GUZMAN. It is a huge number.
    Mr. BEAN.--because the Inspector General says it is 20 
times that.
    Ms. GUZMAN. Right. He had $200 billion in potential.
    Mr. BEAN. Or more.
    Ms. GUZMAN. We had $400 billion in potential.
    Mr. BEAN. Yeah.
    Ms. GUZMAN. And we have narrowed it down pretty far.
    Mr. BEAN. How do you reconcile that? That is just such a 
big number that--and, hopefully, you are working on that. I 
know you have been before and you have said 36. But he says--in 
fact, he was a great witness and was very credible. He says it 
is much, much more than just the plain $36 million.
    And I know to our friends on the other side of the aisle 
that want to blame the previous administration, but you are in 
charge now, and so we expect you----
    Ms. GUZMAN. I am working.
    Mr. BEAN.--to go after bad guys. I think the American 
taxpayers and these small business owners are sick of seeing 
people cheat the system and break in line and steal our money, 
and that is why we want our money back. Were these, the frauds 
that you found to the PPP investigation, were they banks or 
nonbanks or do you know?
    Ms. GUZMAN. It is actually mixed. If you look even just at 
the Clyburn report, there was a mix of banks and CDFIs and 
private lenders across the board.
    Mr. BEAN. Thank you very much. My time has expired. So much 
to talk about. Thank you for being here.
    I yield back.
    Mr. LUETKEMEYER. The gentleman's time has expired.
    With that, we go to the gentlelady from Kansas. Ms. Davids 
is recognized for 5 minutes.
    Ms. DAVIDS. Thank you, Chairman. And thank you to you and 
our Ranking Member for holding the hearing today.
    Before I begin with my question, I did want to enter into 
the record the transcript from the last hearing when 
Administrator Guzman was here with us. And it reflects that she 
was not familiar with the regulations that were in the works on 
WOTUS, the Waters of the United States, specifically, versus 
SBREFA.
    Mr. LUETKEMEYER. Without objection.
    Ms. DAVIDS. So thank you, Administrator Guzman, for joining 
us and being here to testify today. I do appreciate the work 
that the SBA is doing to help our country's entrepreneurs. And 
definitely, I want to thank you for taking some time to come to 
my district in the Kansas City metro area a few years ago and 
just kind of see the entrepreneurial spirit that we have got 
going on out there. And, of course, would love to have you back 
if your schedule allows.
    And I will jump right into some of the things that I have 
been working on since I came to Congress, which is supporting 
and expanding the SBA's Women's Business Centers program. And I 
have introduced and reintroduced the Women's Business Centers 
Improvement Act a number of times. It has passed out of the 
Committee and the House with overwhelming support, and would 
increase oversight, increase the SBA's investment in women's 
business centers, and double the cap on the grants that the 
centers are able to receive each year. The administration's 
fiscal year 2025 budget notes very clearly just how successful 
the WBC program has been.
    You know, in fiscal year 2023 WBCs, including the Kansas 
City WBC, which is in the Kansas Third, trained 87,900 
entrepreneurs and helped establish more than 3,400 new small 
businesses. And your budget proposal shows an increase in the 
number of clients served and new businesses that are created 
through WBCs, but keeps the funding for the program equal to 
last year's level.
    I would love to hear you kind of expand on that and kind of 
how you see the WBC program working and whether or not there 
truly is adequate federal resources going into that program, 
and also kind of what SBA is doing to capitalize on the 
program's success outside of the proposed budget line items 
that we see. Because I know that you guys do a lot of things 
outside of just the numbers that we are seeing on the paper.
    Ms. GUZMAN. Yes, and happy Women's History Month. And, you 
know, as I said, women businesses are starting at the highest 
rates. They are starting to double the rates of men. It is 
really critical that we, you know, address these gaps, capital 
as well as resources.
    Our Women's Business Centers also do an incredible job. It 
is a strong resource partner network. They are oftentimes, you 
know, held back by some of their statutory limits in terms of 
how much we can fund them by and their ability to match as 
well. And so truly, we want to continue to provide them with 
stronger technical assistance, make sure that we are 
streamlining their knowledge and content of SBA, so that they 
can save their time to work directly with the small businesses. 
That is first and foremost.
    And we actually have, you know, strong funding. We plan on 
deploying more WBCs. We have a notice out now that we should be 
awarding additional states and additional centers around the 
country, and we have an additional one that will be coming out 
soon that we hope to deploy across the country. And we are 
trying to get as creative as possible with the women who lead 
these centers to understand how we could better support them 
through this upcoming grant cycle. You know, I know that as we 
continue to work and advise, if we can find solutions to 
strengthen them individually, then I know the program will 
continue to grow.
    Ms. DAVIDS. Thank you. And we are working on the statutory 
limitations that you all are working with.
    Because my time is limited, I will just kind of quickly 
note that including Women's Business Centers, I have also been 
working on the Native American Entrepreneurial Opportunity Act, 
which we also were able to pass recently. I don't think Mr. 
Crane is here, but I got a chance to work with him on that 
bill, which, again, overwhelmingly passed. We will submit some 
questions for you to respond to regarding just kind of the 
success and/or challenges around outreach to Native 
communities. And, again, appreciate your time here today and 
the work that all the folks at SBA are doing.
    And I yield back.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, go to the gentleman from Kansas. Representative 
Mann is recognized for 5 minutes.
    Mr. MANN. Thank you, Chairman Luetkemeyer, for hosting the 
hearing this morning. And thank you, Administrator Guzman, for 
being here.
    I am Congressman Tracey Mann and I represent the big First 
District of Kansas, which is to the east of Congresswoman 
Davids' district. I represent 60 primarily rural counties in 
the western and central parts of Kansas. My district is home to 
more than 20,000 small businesses, and more than 80 percent of 
our employees in the district are employed by small businesses, 
which help drive the economy and define and help people to 
achieve the American dream.
    In the big first, small businesses rely on the federal 
government to do more good than harm on trade promotion 
programs and on a reasonable regulatory environment to achieve 
the American dream. President Eisenhower, a Kansas hero, knew 
this full well when he established the Small Business 
Administration in the first place in 1953.
    Unfortunately, today, small businesses are facing excessive 
regulatory burdens, rising inflation, and increasing 
uncertainty, which are things that I hear from businesses all 
over Kansas practically every day. Ensuring that small business 
owners remain competitive in the domestic international 
marketplace is a top priority for me.
    Administrator Guzman, as the administrator, you are in a 
unique position to advocate for these concerns. The Office of 
U.S. Trade Representative generally relies on advice from other 
agencies, including SBA, through the Trade Policy Staff 
Committee and the Trade Policy Review Group, to develop 
positions on international trade issues. However, this 
Committee has raised concerns that decisions are being made 
with little or no input from SBA, and trade is incredibly 
important, not for all, but for a lot of our small businesses 
in Kansas and around the country. How are you working to ensure 
that USTR and your counterparts in the Biden administration 
consider small businesses when making decisions regarding 
international trade?
    Ms. GUZMAN. Thank you for that question. And I know, I 
don't know if it is in your district, but ShieldAg was one of 
our legacy businesses who, you know, focuses on international 
trade, and we have helped them with the STEP grants.
    I would say that, you know, we have a close working 
relationship within our Office of International Trade, as well 
as the Office of Advocacy that both engage on international 
trade negotiations to try to give the small business a voice 
with USTR, and so those relationships are longstanding and 
continue.
    Mr. MANN. How often do you meet with Ambassador Tai, and do 
you have any concrete plans for continued future engagement 
with her?
    Ms. GUZMAN. I have regular engagement with all cabinet 
members, including Ambassador Tai. And we have had a couple of 
opportunities to travel around the country jointly at two 
locations where we had joint roundtables with small businesses 
to hear some of their concerns.
    Mr. MANN. In SBA's budget request of U.S. Congress to 
increase funding for SBA's international trade promotion and 
state trade promotion expansion programs, I am interested in 
improving these programs with an eye towards how do we be as 
fiscally responsible as we can. So I would ask a question. Why 
should Congress increase funding for these programs when the 
Export Working Capital Program, the International Trade Loan 
Program, and Export Express Loan Programs have historically 
been duplicative and underutilized, with the total of only 245 
loans being made in fiscal year 2023? What are some areas for 
improving these programs to better serve our small businesses 
and small business exports, and should they be expanded? And 
what are your thoughts on that?
    Ms. GUZMAN. Well, we continue to operate those within our 
7(a) platform as a zero subsidy impact program. We, you know, 
agree that we would like to see those numbers expanded, and, 
you know, part of it is the cap, the limit. But there are other 
challenges that could be regulatory. We are currently looking 
at that and would look forward to partnering with your office 
to make sure that we have some good solutions moving forward to 
simplify access to working capital across all of our 
businesses. A lot of people use traditional 7(a) as well.
    Mr. MANN. That is right. Well, I have no further questions. 
And thank you for being here this morning.
    Mr. LUETKEMEYER. The gentlemen yields back.
    And with that, we go to gentlelady from California, 
Representative Chu, recognized for 5 minutes.
    Ms. CHU. Well, Administrator Guzman, thank you for coming 
to my district, to the city of Monterey Park, after the mass 
shooting. Your outreach to us, your presence, and your ability 
to extend help to the small businesses that were impacted meant 
so much to the people there. So, I truly appreciate it.
    And let me say the colleagues on the other side of the 
aisle are saying, what are you doing to hold the top SBA 
leaders who were there when the fraud happened accountable? 
Well, they are gone. The American people fired them when they 
fired the Trump administration, who was in charge when the vast 
majority of fraud happened.
    Turning to other topics, I have great interests in the 
SBIC, the Small Business Investment Company program, and, in 
fact, Representative Garbarino and I have a bipartisan bill, 
the Investing in Main Street Act, which would amend an outdated 
law to finally allow financial institutions to invest up to 15 
percent, triple the current amount of 5 percent, of their 
capital and surplus into SBICs. This is a commonsense change to 
increase the amount of investment capital available to small 
businesses. But unfortunately, the bill languishes in the 
Senate, despite having passed the House overwhelmingly for 
several Congresses in a row.
    So, for one, can you discuss how changing and growing the 
amount of money available to SBICs would help small businesses? 
And also, I wanted you to address the fact that you are 
finalizing it and implementing a rule titled the SBIC 
Investment and Diversification and Growth Rule, which 
modernizes the SBIC program with the goal of increasing equity 
investments to small businesses and underserved communities, 
which is a goal I think is so much needed. So can you discuss 
that as well?
    Ms. GUZMAN. Yes, on the SBIC program, this is a very 
powerful program. Last year, $8 billion was invested through 
our SBICs into small businesses, creating over 130,000 jobs. 
And so really, it is vital that small businesses have this 
growth capital. It has, you know, been a part of some of our 
most iconic brands in this state. Federal Express, you know, 
founder would say how he couldn't get capital, but through an 
SBIC. So, there are multiple examples of successes within our 
SBIC program and all of our programs.
    On the SBIC program we believe that we can achieve some of 
the same goals that you had outlined by trying to, you know, 
support simplification of our licensing, as well as adding on 
new types of SBICs that allow for and align with the demands of 
some of these long-term investment strategies of some of these 
critical industries and others. And so we have added an accrual 
SBIC with this regulatory reform passed this summer, which 
allows for an alignment with more of an equity type investment 
or growth investment for long-term build. And that is the 
vehicle that we have partnered with the Department of Defense 
on to create the SBIC critical technologies.
    In addition, we have created a reinvestor SBIC that will 
allow for a fund to fund structure, which will create 
opportunities in underserved communities to have smaller 
emerging fund managers come forth under a fund that would be 
able to manage to the SBIC program's, you know, strong 
oversight and controls. We do believe that these opportunities 
are opening up the licensing process for more. We have also 
streamlined the licensing process.
    And so as a result, our pipeline is very healthy with a lot 
of requests for both the accrual SBIC, the SBIC critical 
technologies, and we are seeing a change. And of course, having 
some more flexibility around the cap and requirements around 
this program is really vital.
    Ms. CHU. Thank you. And I wanted to address the Community 
Advantage Loan Program. Ranking Member Velazquez and I just 
recently introduced our bill to codify it. But I am thrilled 
that you have given certainty to the program through the new 
California SBLC license. And it is great that you have added 30 
new mission lenders into the program for 142 SBLCs.
    I wanted to see if you could address the--well, there was 
uncertainty for a lot of the mission lenders, and now it seems 
to have stabilized. But is there assurance that you can give 
that the current guidance and lender requirements won't be 
changed or overturned by a future administration?
    Ms. GUZMAN. We are committed to the regulatory reform that 
made permanence for the community advantages through the 
program, through the SBLC, and we are committed to the 
established policies that we put in place that really, you 
know, give them strong access to the 7(a) portfolio. So, as a 
result, you have seen with this permanence, obviously, the 
increase in the people who want to participate with that spike 
of over 30. But also we are seeing their ability to go out and 
recruit funding to be able to do these small business loans as 
a result.
    So we are committed to maintaining that working 
relationships and continuing to work with them to ensure that, 
you know, we are taking their feedback and continuing to evolve 
to meet the marketplace needs.
    Ms. CHU. Thank you. I yield back.
    Mr. LUETKEMEYER. The gentlelady's time has expired.
    With that, we go to the gentleman from Missouri. My fellow 
colleague from Missouri, Mr. Alford, is recognized for 5 
minutes.
    Mr. ALFORD. Thank you, Mr. Chair. Appreciate that. 
Administrator, good to see you. I think we saw you back on 
December 3 at your office. I will get into that in just a bit.
    You know, I have long been concerned with the SBA's lax 
work-from-home policy and what that means for our nation's 33 
million small businesses, getting them the help they need, when 
they need it. As it turns out, I share this concern with 
another former business owner in this town, White House Chief 
of Staff Jeff Zients. Mr. Zients directed every agency to 
return to their workforce, to the office, at least 50 percent 
of the time. In fact, he required that every department submit 
an action plan to OMB on January 26.
    So, Administrator Guzman, following this hearing, we will 
be sending a letter requesting that you share this action plan 
with Members of this Committee. Can you please comment on what 
work you have done on this plan so far? Is it complete and what 
is your plan?
    Ms. GUZMAN. Yes, the whole of SBA across the country has 
returned to work. We are seeing that these mission-driven 
people who work at the SBA, because a lot of them have that 
very mission tie, too----
    Mr. ALFORD. What do you mean, return to work, ma'am?
    Ms. GUZMAN. Meaning that we are, you know----
    Mr. ALFORD. To the office?
    Ms. GUZMAN.--having to work to the office. Correct, mm-hmm.
    Mr. ALFORD. So if we go down there today, the desks will be 
filled.
    Ms. GUZMAN. We are complying with, of course, the 
standards. The SBA is back 5 days a pay period, and across the 
country at this point.
    Mr. ALFORD. Because, you know, we attempted to visit the 
SBA. When I first got on this Committee and on the Ag Committee 
and Armed Services, the first thing I want to do is go meet 
people, see where they work. And we were told, you can't come 
down here. Sitting Members of Congress, we got in the Pentagon, 
but we could not get in the USDA, which has 2 million square 
feet of office space, or the SBA with roughly 290,000 square 
feet of office space. And because of that, we filed the CABO 
Act, the Congressional Access to Bureaucratic Offices Act, 
which mandates that sitting Members of Congress and their 
appropriate staff should be allowed into these agencies, such 
as yours, which we have oversight.
    I am sorry that we had to file that. We got quite a number 
of sponsors. Our attempt is not to come in and stir up trouble, 
but we do have oversight of these facilities. And after our 
December 3 visit, which was a very nice visit, I think we had a 
very good discussion, I was told--I got a few pictures here of 
our visit, here is some of the empty office spaces there at the 
time. Here is a good shot of you, me, and Jake Ellzey on this 
Committee talking. After our December 3 visit, I was told that 
SBA employees were directed to consolidate their desk to mask 
the fact that only 10 percent of the 295,000 square foot SBA 
headquarters was being used
    Do you have any knowledge of that being true? You have, 
what, seven or eight floors there?
    Ms. GUZMAN. We have, but we only occupy two thirds of the 
building. There are three other agencies that also occupy this 
building
    Mr. ALFORD. All right.
    Ms. GUZMAN. But the floors that we visited were, upon 
request to certain offices, and we have, you know, 50 percent 
occupancy on any given day at a minimum. So that is not 
accurate.
    Mr. ALFORD. Som nothing was staged for our visit there on 
our CABO cavil?
    Ms. GUZMAN. No, the only thing that was orchestrated is 
which offices you wanted to visit, which was capital access 
rural, and so we went to certain floors. Actually, we went to 
the floors that SBA fully occupies.
    Mr. ALFORD. Well, I must say, your staff was wonderful to 
talk with. Look, we have got a lot of work to do together, I 
think, to help the American people starting businesses and 
maintaining the business.
    I do think it is very important that, you know, COVID is 
over. We have got to get back to work. If we are not going to 
use these buildings, let's shut them down. Let's consolidate 
and save money for the American taxpayer. Would you agree with 
that?
    Ms. GUZMAN. We are looking constantly at our space 
requirements aligned with our, you know, facilities' needs. So, 
yes, I align with that completely.
    Mr. ALFORD. Former Speaker Nancy Pelosi once said, show me 
your budget and I will show you your values. I have seen your 
budget. It raises serious doubts about your values.
    The Office of Veterans Business Development exists to 
fulfill SBA's mandate to serve our veterans. To fulfill this 
important duty, you have requested $335,000. That total is 
about the same as the increase in transit subsidies that you 
requested. Transit subsidies have risen from $300,000 in '23 to 
$600,000 in '24, to $900,000 requested now in fiscal year 2025. 
This is despite the SBA's notorious absenteeism. According to a 
GAO study, less than 10 percent of your office space is even 
being used.
    Now, I know you say that people are starting to come back, 
but we have to accelerate this. Administrator Guzman, I am 
deeply concerned with the values contained within your 
budgetary request.
    Thank you, Chairman. And I yield back.
    Mr. LUETKEMEYER. The gentlemen yields back.
    And with that, we go to the gentleman from Minnesota. Mr. 
Phillips is recognized for 5 minutes.
    Mr. PHILLIPS. Thank you, Mr. Chairman. And greetings, Madam 
Administrator.
    As you might know, I am retiring at the end of this 
Congress at the ripe age of 55. Might have to get a real job, 
and it is been a joy to work with you. I want to say thank you 
for coming to my district, for supporting small businesses, of 
which I have been one most of my life, and grateful for what 
you do.
    As you know, my highest priority is to expand employee 
ownership. I think it is a nonpartisan part of the American 
dream. I know that is one of your mandates as well. And we also 
are all aware, because we have had this conversation, that one 
of the barriers, in many cases, to ESOPs or co-ops is the risk 
of losing the status of contracting, preferred contracting 
status. And take a woman-owned business, and she wishes to 
convert to an ESOP for set-aside contracts. Oftentimes, they 
won't do so because they will lose that if they become an ESOP.
    So, have you reached any conclusions at the SBA about how 
we can remove that barrier so more businesses can convert 
without losing that access to the set-aside contracts?
    Ms. GUZMAN. I appreciate that question. I know we explored 
that topic with some of the ESOP experts in your district. On 
the contracting side, we do not have a solution at this point 
in terms of how we can allow for that greater affiliation and 
control issue when it comes to small businesses that are 
structured in that way. But I am happy to explore that further 
with you during your time here.
    Mr. PHILLIPS. I would welcome that with me in my office. As 
you know, I have got the Employee Equity Investment Act that 
has a fix for that. As you know, it also asks the SBA to take a 
formal step to try to reduce that barrier. So, I would truly--
--
    Ms. GUZMAN. I can report to you as well that we have a 
couple of SBICs, for example, that are focused on employee 
ownership, and ESOPs in particular, that are now licensed, as 
well as we have now removed and allowed for delegated authority 
for ESOP transactions within our 7(a) portfolio, which was part 
of the Main Street Act.
    Mr. PHILLIPS. Okay. As much as I can do to encourage it. 
You know, the more we have employee owners of small businesses, 
the more we have small business owners. So, thank you.
    And I also want to ask about AI. I think it is 
underappreciated, the forthcoming disruption. Clearly, large 
enterprises are well positioned to both take advantage of it, 
protect themselves from it. But I am deeply concerned about the 
ability of small businesses to compete. So how is the SBA 
looking at that, and how much demand for AI tools and technical 
assistance are you hearing from small business owners?
    Ms. GUZMAN. It is quite extensive. As you know, during the 
pandemic, small businesses adopted technology at very high 
rates. The SBA has, you know, focused on expanding the free 
tools and resources to small businesses around technology, and, 
you know, that includes focusing on their adoption of AI. They 
are already using it extensively as they develop their 
marketing, or perhaps using it as chatbots in their customer 
service. And so we know that it is going to help enable them to 
make progress in their efficiencies. And obviously following 
the, you know, President's executive order on ensuring that the 
agency as well, is leveraging technology both an innovative 
way, but responsibly. And so we continue to partner with, you 
know, organizations out there to try to get those tools and 
awareness out there.
    Mr. PHILLIPS. Do you believe the SBA has adequate 
resources, both human and financial, to ensure a level playing 
field?
    Ms. GUZMAN. Obviously, we continue to focus on the 
innovative startups as well, you know, through the SBIR program 
to make sure that innovative startups have pathways to the data 
and computational power that they have. And we are happy to see 
movement around that across the federal government and the 
agencies that deploy SBIR.
    Mr. PHILLIPS. With my last minute and a half, I want to 
just chat about youth entrepreneurship and my belief that we as 
a country are not doing enough, especially in our public 
schools, to educate, expose, and promote entrepreneurship 
amongst young people. Can you share any thoughts you might have 
about how the SBA can make further investments, inspiring young 
people to become entrepreneurs, at least to give them the tools 
to perhaps start their own business one day?
    Ms. GUZMAN. Yeah. I was recently at South by Southwest, 
and, of course, saw the lemonade stand winner, and he was just 
such an incredibly inspiring young man, 11 years old----
    Mr. PHILLIPS. Yeah.
    Ms. GUZMAN.--already thinking about distribution of his 
lemonade across Texas. But, of course, I mean, this is 
oftentimes the important pathway and a choice for people to 
jump right into entrepreneurship. And so, you know, obviously, 
we are set up to help administer and advance our loan programs, 
which, you know, then focuses on the adult population. But you 
see a lot of our accelerators in our networks really focusing 
on youth entrepreneurship as well, and at least exposing the 
youth to entrepreneurial pathways, and we think that is 
important.
    Mr. PHILLIPS. Yeah. With my closing, I hope that can be one 
of our legacies here in this Congress, to inspire young people 
to be owners of this economy, and they can't become owners if 
they don't have the tools. And I think the SBA can surely play 
a role in providing those. So, thank you most of all for your 
service, and I am grateful.
    I yield back.
    Ms. GUZMAN. Thank you.
    Mr. LUETKEMEYER. The gentlemen yields back.
    We have some more Members on our side coming. They are not 
here yet. I want to hold my questions to the end. So with that, 
we are going to recognize a gentleman from Ohio, Mr. Landsman, 
for 5 minutes.
    Mr. LANDSMAN. Thank you, Mr. Chair. And thank you, 
Secretary Guzman, for being here and for all that you do.
    I really appreciate that you came out to the district, 
southwest Ohio and Cincinnati, and we toured a host of small 
businesses. They were very appreciative of your time, and we 
have had a really great relationship with your team in terms of 
helping our small businesses navigate the SBA and all kinds of 
challenges that they are facing.
    One of the small businesses we visited was the Water Lily 
Learning Center. And you and I share a passion for childcare 
small businesses, and, you know, Cincinnati, I think, is unique 
in that, you know, years ago, I and others led a ballot measure 
called the Cincinnati Preschool Promise to provide 2 years of 
quality preschool for 3- and 4-year-olds in Cincinnati. And 
that funding supports tuition assistance for families who 
couldn't otherwise afford quality preschool at centers, both 
public and private, and nonprofit and small businesses. It has 
made a big difference for Water Lily and others as a source of 
revenue so that they can keep their classrooms open, childcare 
and the preschool classrooms that they run.
    Recognizing the importance of early childhood education and 
the critical role it plays in child development, and, of 
course, the childcare small businesses, the critical role that 
they play in our small business ecosystem and our larger 
economy in terms of folks being able to work if they can afford 
quality childcare, my team and I introduced the Childcare Small 
Business Insight Act, which would study the state of childcare 
in the nation and offer recommendations. It passed unanimously 
out of the Committee in January, so I am grateful to my 
colleagues for that. I wanted to just get your thoughts on this 
topic.
    So, first, you know, what do you foresee as shortcomings in 
the for-profit childcare industry as it relates to the SBA? 
This is something that you and I have talked a lot about. You 
have a depth of knowledge and real passion for this. So, you 
know, what do you think this study, when passed, hopefully the 
full House will pass it, what do you believe that this study 
will find in terms of where the SBA is doing really important 
work for these childcare small businesses, but also where the 
gaps may be?
    Ms. GUZMAN. Yes. Thank you so much for that question. And I 
have visited, you know, beyond Water Lily, several childcare 
facilities across the country, and truly, it is part of our 
infrastructure. Women entrepreneurs that I meet with 
continuously flag childcare as an issue and are looking forward 
to the Child Tax Credit and their ability to leverage that to 
help make childcare more affordable for them.
    On childcare in particular, we see a lot of our small 
business owners leveraging a 7(a) program, but also 504 to buy 
their building property. Buying property and being able to 
maintain sustainability in the community is really important. 
You know, I think with these, their models are very challenging 
in terms of their ability to raise revenues, you know, 
especially in underserved communities.
    And so, you know, obviously, there is a financial issue 
that goes beyond SBA. But we try to help them with the 
technical assistance and know-how to effectively run their 
businesses and do childcare boot camps across our resource 
partners, and are looking to try to improve those models in 
order to strengthen their operational expertise, because they 
have to be so efficient as entrepreneurs to be able to survive 
in the childcare industry. But we know that affordable capital 
is part of that. And so we need to do better outreach to 
support these entrepreneurs, who are mostly women, to be able 
to access our capital programs as well.
    And that is partly what we are doing. We have a childcare 
summit coming up at the White House, where we will focus on 
childcare business in particular, and ensure that, you know, we 
have pathways at the SBA to support them.
    Mr. LANDSMAN. That is great. Thank you for that. I really 
do appreciate how much you have led on this.
    Last question. The micro loan program, which is really 
designed to help the nonprofit childcare centers, do you 
envision something--you know, because on the capital side, 
there is obviously help, as you just mentioned; on the 
operations side is where they really struggle in addition to 
the capital stuff. And owning the building is really important.
    Do you envision something similar? Could that be something 
that may come out of the study and the work is a micro loan 
program for these childcare providers that are for-profit?
    Ms. GUZMAN. Yes. And micro loan--both for-profit and 
nonprofit can access the SBA's micro lending program. It is the 
only time nonprofits can access our program. And so, you know, 
we feel continued support of that. I know there is Senate 
action on expanding that access to other programs at the SBA.
    Mr. LANDSMAN. Yeah. Great. I think the challenge is, is how 
much does it--you know, is it sufficient? And I think that is a 
question for us. But hopefully, that is something that comes 
out of the work of this bill.
    So thank you again, and I yield back.
    Ms. GUZMAN. Thank you.
    Mr. LUETKEMEYER. The gentleman's time has expired.
    We have a lot of Members that are in and out because of 
other Committee hearings, and we are going to continue to be 
flexible with that. So with that, we are going to go to Mr. 
Thanedar from Michigan for 5 minutes.
    Mr. THANEDAR. Thank you. Thank you, Mr. Chair. And thank 
you, Administrator, for your passion and your access. I thought 
I am the only Member where you come and visited my district 
twice in the last 6 months, but looks like you have been all 
over the country.
    You came to our district, you and I walked on the streets 
and visited some small businesses that we had planned to visit. 
You also took the time to visit some people who approached us 
while we were there. And I really appreciate your passion. We 
heard firsthand some of the small business owners who benefited 
from the PPP and other SBA programs. So thank you again. Thank 
you for your help.
    I am a small business owner, ran small businesses for 25 
years, wrote one of the SBIR grants that I got awarded. I took 
advantage of the 504 program, and that helped me tremendously 
to grow my small business, create hundreds of jobs in my 
business.
    Recently, I introduced the LIONS Act, we call it, which is, 
you know, being from Detroit and a Lions fans, we are pleased 
to call that a LIONS Act. But what it does is raises the 7(a) 
loan amounts from the $5 million to $10 million because the 
valuations have gone up and it becomes more capital is needed 
for business owners to invest and grow their businesses. And my 
question to you is, how do you see this increase of $5 million 
to $10 million in the loan amounts? How much of a burden that 
is to get that accomplished, how much of an administrative cost 
that is going to add, too, and just, frankly, I wanted to know 
what you think about it.
    Ms. GUZMAN. Yeah, we similarly, you know, are interested in 
seeing that expanded, especially as we see manufacturing and 
other critical industries needing additional capital. We know 
that SBA could fill those gaps in the marketplace.
    And you are right, you know, it hasn't been changed since 
the Obama-Biden administration increased it to $5 million, you 
know, for inflationary pressures. It would be up in the sevens 
if we just changed it for inflation alone. So we agree that 
that money is needed. It would be simple to administer in terms 
of expanding the access that would, you know, benefit more of 
our banks and lending institutions who access those funds for 
some of their small businesses in their portfolio.
    Mr. THANEDAR. Thank you, Ms. Guzman. And, you know, going 
back to the questions being asked about the fraud, I want to 
point out that a lot of that happened during the Trump 
administration. The question raised about the people who were 
responsible in your, you know, department, and clearly, you 
know, many of those people are no longer here because the 
American people, you know, fired them.
    But my question to you is, I mean, your testimony mentioned 
pandemic relief funding and the potential for fraud. To 
paraphrase from the briefing, in an effort to disperse Paycheck 
Protection Programs and COVID-19 funds swiftly, the SBA 
weakened and removed internal controls. In early 2021, 
safeguards were reinstated. One of the tactic was to install a 
screening process during loan approvals.
    So, my question is, can you make a statement on where the 
SBA stands regarding protections against fraud? Are these acts 
of fraudulent activity a risk for the clientele of the SBA or 
to the administration alone? How effective have the protective 
measures have been?
    Ms. GUZMAN. Thank you. The protections have been strong. As 
I said earlier, we have averted 21 million attempted fraudulent 
loans from, you know, accessing the COVID pandemic programs, 
you know, which was over $500 billion worth. And so clearly, 
the controls that we put in place have enabled us to get back 
to our normal standing of our decades of experience doing 
disaster lending using the right controls in place.
    And so I am very confident that with these added measures 
that we have now applied across our whole portfolio, despite 
the fact that the 7(a) 504 didn't experience the levels of 
fraud of the COVID pandemic programs, we are now strengthening 
our programs for the future alongside the financial 
institutions that are doing the same to ensure that fraud is 
not a problem in any of our programs going forward.
    Mr. THANEDAR. Thank you for your great work, and I yield it 
back.
    Mr. LUETKEMEYER. The gentleman's time has expired. With 
that, I understand we have got three Members, two Republicans 
and one Democrat, who are on their way back from the 
transportation markup. So if they get here before I finish up, 
we will let them ask questions. If not, we will see once where 
we are at that point. But let me begin my 5 minutes.
    Ms. Guzman, have you talked to Secretary Yellen lately?
    Ms. GUZMAN. Regular engagement with cabinet? Yes, but----
    Mr. LUETKEMEYER. So, have you asked her about when she is 
going to show up to give us a PPP report? It is several years 
past due now.
    Ms. GUZMAN. As requested, in our previous hearings, we 
informed the Treasury about this request, but----
    Mr. LUETKEMEYER. And they are ignoring you. As they are 
knowing the law which says she's supposed to be here. That is 
not a request by a letter. That is in the law that Congress 
passed. She is supposed to show up. So, anyway, thank you for 
that.
    You know, the discussion this morning is about, or has been 
quite a bit about, who is at fault for this? I can tell you I 
was part of the group that put the PPP program together. And I 
can tell you I was very strenuous in my concerns about allowing 
the fintech companies in, who do not have the controls in 
place. And that is where about 95 percent, according to the IG, 
and they testified in that chair right over there, that is 
where most of the fraud occurred in the PPP program.
    And I was very strenuous also in my remarks with regard to 
EIDL, knowing that there is basically none, zero, anything in 
place by the SBA to keep the money in place without having 
being able to be fraudulently accessed, especially at the 
amounts that the program was allowed to grow to. That aside, 
you jumped into this program knowing where it was at. So, now 
your responsibility is to clean it up. And that is the concern 
we have this morning, and that is where we are coming from with 
our questions.
    Why have you not gone out and sold part of the portfolio, 
and as Ms. Van Dyne talked about, in a way that alleviates the 
need for more money for your agency, as well as recover some of 
the money?
    Ms. GUZMAN. We have evaluated this, and at this point, are 
still collecting successfully within SBA's own collection 
efforts. And the Congress, as I had----
    Mr. LUETKEMEYER. With all due respect, Madam--Madam, Madam, 
excuse me.
    Ms. GUZMAN. I haven't answered the question.
    Mr. LUETKEMEYER. I don't know how you can say you are 
adequately doing it. According to the IGA, you told the IGA 
that in October 20, $47.7 billion of the EIDL loans were 
written off. Is that not correct?
    Ms. GUZMAN. The EIDL portfolio is performing better than 
what Congress expected.
    Mr. LUETKEMEYER. That is not my question. My question is, 
the IG didn't say that we could even validate the information. 
But you told him that you have got $47.7 billion that you have 
charged off of EIDL loans. Is that correct?
    Ms. GUZMAN. I would have to double check those numbers 
before I testify to that.
    Mr. LUETKEMEYER. Is it close?
    Ms. GUZMAN. I would have to double check those numbers. I 
will get back to you.
    Mr. LUETKEMEYER. When did you charge those off?
    Ms. GUZMAN. Over the course of our collections as----
    Mr. LUETKEMEYER. Oh, prior to September 30?
    Ms. GUZMAN. Again, we'll have to get specifics to you on 
this topic, but what I will share is that----
    Mr. LUETKEMEYER. Did you charge any loans off prior to 
September 30 of 2023?
    Ms. GUZMAN. I would have to get back to you, sir, and I 
will.
    Mr. LUETKEMEYER. Okay, let's ask the question this way. 
Have you sent any 1099s out to the folks that you cancelled the 
debt for?
    Ms. GUZMAN. I do not know where we are at in that process. 
And so, again, we will get back to you. What I will like to 
answer your question about COVID idol in particular. You know, 
obviously, we have put in those strong controls into the 
program. Yes----
    Mr. LUETKEMEYER. Well, again, Madam Chair, with all due 
respect--our Madam Guzman, the IG sits in his chair here and 
comes in about once every 6 to 8 months and tells us in his 
report you are not doing a lot of things that he requests you 
to do. You ignore the advice from the report that you actually 
requested and paid for from the accountants, although you did 
say KPMG said, well, you could do some of it. But the IG says 
you only implement about half of what he actually recommends. 
So when you say that you implement these things, it's a broad 
statement, which is not true. I am sorry.
    Ms. GUZMAN. As I have shared with the Chairman, going back 
to your original question about selling the portfolio, Congress 
could appropriate, enact something and appropriate the dollars 
to sell the portfolio, as it would cost the federal government 
money to sell.
    Mr. LUETKEMEYER. No, it would not, Madam Chair--or Madam 
Guzman.
    Ms. GUZMAN. It would within the appropriations process. 
Yes, it would.
    Mr. LUETKEMEYER. There is no way it costs money when you 
recover money. When you sell the portfolio, you will recover 
some money, and you will cover all the costs for whatever it 
is. You have a net gain.
    Ms. GUZMAN. We are happy to work with your team to review 
how that would work in appropriations, but that is what 
Congress and action would take.
    Mr. LUETKEMEYER. Well, I know that CBO doesn't score it 
that way, but CBO doesn't score it correctly because they don't 
score the recovery.
    Ms. GUZMAN. And so, as a result----
    Mr. LUETKEMEYER. That's the problem.
    Ms. GUZMAN.--it would cost taxpayer dollars to do that.
    Mr. LUETKEMEYER. But you are going to recover several times 
more than that when you do that. I mean, this is not rocket 
science. I mean, this is----
    Ms. GUZMAN. And we are still collecting and this portfolio 
is still performing. As I said, it is performing way better----
    Mr. LUETKEMEYER. Well, Madam----
    Ms. GUZMAN.--than any of the disaster----
    Mr. LUETKEMEYER. Madam----
    Ms. GUZMAN.--we have ever----
    Mr. LUETKEMEYER. Ms. Guzman, we are going to send you a 
request to find out when these 47 points separating----
    Ms. GUZMAN. Happy to reply to that. Thank you.
    Mr. LUETKEMEYER. And did you send 1099s out?
    Ms. GUZMAN. Happy to reply to those requests.
    Mr. LUETKEMEYER. If you didn't do that----
    Ms. GUZMAN. Thank you.
    Mr. LUETKEMEYER.--you are in violation of the law. Again, 
whose decision was it to not sell a portfolio?
    Ms. GUZMAN. Ultimately, we haven't made any final decision 
on this portfolio. As we are still collecting. We are still 
going through the 9 steps on PPP and the 14 steps on EIDL that 
are required----
    Mr. LUETKEMEYER. So, you have a big decision on whether to 
act----
    Ms. GUZMAN.--which is referring to Treasury.
    Mr. LUETKEMEYER.--on reports that you got?
    Ms. GUZMAN. We are acting on those reports that said that 
we could still potentially profit by trying to collect at the 
Treasury stage. And so we have pursued the Treasury option. We 
are still in that phase, and we are making collections, 
continuing to make sure that this portfolio performs. And 
again, this is outperforming any expectations of Congress.
    Mr. LUETKEMEYER. Oh, I guarantee it won't outperform my 
expectations, I guarantee you.
    Ms. GUZMAN. As established.
    Mr. LUETKEMEYER. Another quick question for you here. You 
made a statement a while ago that you have doubled down on 
staffing to do the recovery of these things. Are those people 
working from home or they are working from the office?
    Ms. GUZMAN. Double down on staffing? I said I doubled down 
on--during this testimony, I said I doubled down on staffing to 
clear some backlogs and certifications.
    Mr. LUETKEMEYER. My question is, are they working from the 
office or are they working from home?
    Ms. GUZMAN. Our position at the SBA is 5 days of in work--
or, excuse me, 5 days in the office for all of our employees 
that are working, you know, not in a remote stance.
    Mr. LUETKEMEYER. Let me ask my question again. The question 
is very simple. Are they working in the office or are they 
working from home? Yes or no.
    Ms. GUZMAN. It is a mixture, and some of them are working 
in the office and they are----
    Mr. LUETKEMEYER. So, you are hiring people to work from 
home. Is that what you are telling me?
    Ms. GUZMAN. During the pandemic, people were hired----
    Mr. LUETKEMEYER. No, that is not my question, ma'am. My 
question is----
    Ms. GUZMAN.--temporarily on a remote basis.
    Mr. LUETKEMEYER.--the new people you are hiring, are they 
going to work from home----
    Ms. GUZMAN. New permanent----
    Mr. LUETKEMEYER.--or are they going to work in the office?
    Ms. GUZMAN. Any new permanent people who are hired at the 
SBA come into nonremote status, so meaning that they do have to 
come into the office.
    Ms. LUETKEMEYER. So the new people----
    Ms. GUZMAN. Any new person.
    Mr. LUETKEMEYER.--are working from the office?
    Ms. GUZMAN. Any new person hired on a permanent basis at 
the SBA, yes, they definitely----
    Mr. LUETKEMEYER. Whew, man, this is----
    Ms. GUZMAN.--have to work at the SBA.
    Mr. LUETKEMEYER. This is unbelievable. I can't get a 
straight answer. It took me 3 minutes to get an answer on that 
question.
    Ms. GUZMAN. Well, it depends on what you are asking and 
letting me----
    Mr. LUETKEMEYER. It is a simple question, Madam--Ms. 
Guzman.
    A while ago, you made also a statement about red tape. You 
said you were cutting red tape. Can you give me examples some 
red tape you cut?
    Ms. GUZMAN. Yes. Affiliation for control caused a lot of 
cumbersome processes for our lenders, especially when it came 
to the time of, you know, performing against that guarantee. 
And so we have simplified the program for our lenders, which 
ultimately will benefit the borrowers, and that is across our 
regulatory reform. The same with the SBICs, simplifying the 
process of licensing to ensure that, you know, we cut red tape 
for those participants.
    Mr. LUETKEMEYER. Okay. Folks aren't here yet, so with that, 
we are going to thank you, Administrator Guzman, for your 
testimony and for appearing for us today.
    Without objection, the Members have 5 legislative days to 
submit additional materials and written questions for the 
witness to the Chair, which will be forwarded to the witness. 
We ask the witness to please respond promptly.
    If there is no--there is no further business, and without 
objection, the Committee is adjourned.
    Ms. GUZMAN. Thank you.
    [Whereupon, at 11:49 a.m., the committee was adjourned.]
                            
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