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Transcript for Event: Pandemic Response: Perspectives From Small Business Borrowers Panel

Sandra Bruce: Welcome everyone. I am Sandra Bruce, acting Inspector General of the US Department of Education. With me today is Rich Delmar acting Inspector General of the US Department of the Treasury. Rich and I are moderating the second in a series of pandemic response accountability committee panels. Today's panel is exclusively focused on financial sector stakeholder perspectives, persona, operation, efficiency, and effectiveness in areas for enhanced oversight related to the pandemic response efforts of the federal government and the Federal Reserve. The PRAC is composed of 22 Inspectors Generals leading the efforts to promote transparency and conduct oversight of the federal government's pandemic response, which today totals more than $3 trillion in economic relief funds. This total includes funding from the CARES Act, and subsequent legislation enacted in the spring of 2020 as well as the December 27th enactment of $900 billion in supplemental pandemic relief. 

Sandra Bruce: Rich and I are also members of the PRAC's financial sector oversight work group, which comprises Inspector General with oversight responsibilities in the areas of banking, lending, and housing. I want to thank the great panel that we have with us today. We'll look forward to hearing your insights and suggestions. And I will now turn to Rich so that he can give his opening remarks followed by introductions of our panelists. 

Rich Delmar: Thank you, Sandra. Good morning. I'm Rich Delmar, I'm the acting Inspector General at the Treasury Department. We welcome today's panelists who represent a variety of borrower's stakeholder perspectives. Throughout the pandemic, the federal government initiated numerous recovery response efforts through the CARES Act, the Federal Reserve Lending Facilities Programs, and other relief legislation. These efforts have played an integral role in ensuring that loans and other relief programs reach the borrowers and businesses most effected by the pandemic and that borrowers are protected during this unprecedented time. This listening forum is a unique opportunity for the IGs to hear from our borrower stakeholders. We're interested in gaining the benefits of your insights and perspectives about pandemic relief lending programs in which your constituencies are involved as well as about the areas in which financial sector IGs should focus our oversight attention in order to enhance the efficiency and transparency of pandemic relief efforts and to promote accountability and deter and detect fraud, waste, and abuse. 

Rich Delmar: Today, we're fortunate to have with us several knowledgeable panelists, Larry Ivory and John Harmon of the National Black Chamber of Commerce, Rhett Buttle of the Small Business Round Table and Ramiro Cavazos of the US Hispanic Chamber of Commerce. We thank you all for being here and participating. First we'll have panelists introduce themselves. We'll start with the National Black Chamber of Commerce, Mr. Ivory and Mr. Harmon, can you please introduce yourselves and tell us about the constituency that you represent, the National Black Chamber of Commerce. 

Larry Ivory: My pleasure. I'll go first and then John can follow me. Obviously the National Black Chamber is one of the oldest national chambers in the country, black chambers of commerce in the country. And obviously from our perspective, our mission statement is to economically empower and to sustain the African-American community through entrepreneurship and capitalistic activities via interaction throughout the black aspirin, that's our mission. In a nutshell, what we do we help strengthen small businesses, which is a lifeblood of our economy. So as the chairman of the board it is part of my responsibility to help form direction and policies that help us to stay focused on our mission to strengthen businesses across the board. 

John Harmon: So I'll follow my distinguished friend, leader, and colleague Larry Ivory. I'm John Harmon, I'm a former chairman of the National Black Chamber, but I also serve as the regional vice president over New York and New Jersey for the National Black Chamber. And then my day job, if you will, I'm the founder, president, and CEO of the African-American Chamber of Commerce of New Jersey. And to Larry's point we're probably about 2 million businesses across America but we have some real systemic challenges even leading up to the pandemic and the relief provided through the CARES Act. Ninety something percent of black businesses across America are sole proprietorship, so we work and advocate on behalf of those businesses daily to connect them with resources, opportunities, and things that will contribute to their success and ultimately expanding the capacity. So I'm delighted to be here the day and looking forward to the discussion. 

Rich Delmar: Thank you both gentlemen, much appreciated. Mr. Buttle, can you tell us about yourself and the Small Business Round Table? 

Rhett Buttle: Well, thank you all so much for having us today for this, what I think is really critical discussion. Small Business Round Table is a coalition of leading small business advocacy and entrepreneurship organizations. And SBR, which we call it for short, is really dedicated to focusing on policy, securing access for small business owners as relates to all issues around programmatic elements, whether that's in the private sector or the government and promoting the inclusion of the benefit of small businesses, which too often get left out of important conversations whether that be within the government or in other places. SBR is really made up of a coalition of our members, so thrilled to be here today with one of them, the US Hispanic Chamber of Commerce. We are now nine organizations strong dedicated to advocating and advancing the interest of small business in America. I don't have to tell folks on this call about how important small businesses to our country, they create two out of every three new jobs. Making sure that they have a seat at the table is really what the Small Business Round Table is about. Thanks so much for having us today. 

Rich Delmar: Thank you. And Mr. Cavazos, can you tell us about yourself and the US Hispanic Chamber of Commerce? 

Ramiro A. Cavazos: Thank you very much for having me with you. It's an honor to be here to address the pandemic relief oversight committee's questions representing our Hispanic business community. So thank you for the work you're doing in asking these questions. And also I want to thank Larry and John and Rhett for their leadership helping our small businesses grow and our black businesses throughout the country. My name is Ramiro Cavazos, I'm the president and CEO of the United States Hispanic Chamber of Commerce. We represent more than 260 Hispanic chambers from around the country and in Puerto Rico, from Hawaii to Rhode Island, from Seattle to Florida, South Texas up to Wisconsin. 

Ramiro A. Cavazos: There are 61 million Americans that consider themselves Hispanic. We are an ethnic group we are not a race, so we are a Caucasian, Asian, Afro Latino, and all different religions and backgrounds and income levels. And we're very proud to call, as a part of our membership, close to 5 million Hispanic owned businesses throughout the country that are fast growing. And many of those businesses have, as we all know, like our black brothers and sisters and the members of the LGBTQ community and Asian community, disproportionately affected through the COVID-19 pandemic. So we look forward to addressing some of our opportunities and areas of growth that we can use as we grow forward. It's an honor to be here representing our membership. 

Sandra Bruce: Thank you panelists for your introductions. We look forward to hearing your perspectives on a variety of questions that can inform our work and also provide invaluable feedback and information to Inspectors General and to the American public about what is working well, where efficiencies and effectiveness may need improvement, and potential areas for greater oversight. So let's get started with the first area of questioning. Considering that PRAC's mission is to oversee the federal government's numerous pandemic relief programs, where do you see the greatest need for government oversight and how have potential oversight activities likely affected borrower's interest in participating in coronavirus and other federal relief efforts? Mr. Ivory, can you provide your thoughts on behalf of the National Black Chamber of Commerce? 

Larry Ivory: Thank you for that question. We need to talk about some of the inherent challenges and we take a look at some of the areas that we saw coming out. And first let me say that we were happy to see the Congress act quickly in terms of getting money to small businesses. The unfortunate part of that was that unfortunately those who were not ready did not get a chance to participate in the first round, and there were some significant glitches that obviously happened to the fact that we would try to move quickly to get money into the hands of small businesses. We think that quite frankly as we did that, that we could have had more insight with small businesses that were sitting at the table. 

Larry Ivory: And when we say small businesses, I think sometimes when we look at the SBA definition of small business, that means people who have 500 employees. When you talk about small businesses in our community, what we realize is that in some cases 500 employees basically is a pretty enlarge business by definition in the black community. So when we talk about small business, we have to understand that means something substantially less than that. But those businesses are still vital, they are still very important, and in some cases those businesses are funding their business out of their pockets. They serve a very vital service to the community, but the reality of it is that they don't have the infrastructure, they don't have all the things that the CARES Act needed in order to participate. It didn't mean that it wasn't valuable and it wasn't making a contribution, it simply means that they didn't fit. 

Larry Ivory: And so those small businesses who were holding on by a string just didn't get a chance to participate. So that was one of the things that we saw that I think there was more focus in the second round that gave people a better opportunity to participate at the end of the day. So I think that what we've seen obviously as we just stated, how did it affect? Most of the borrowers who were small just was not ready, they didn't have the banking relationships. Those who did, a lot of our business did and they had a chance to participate. Those who were much smaller who did not have the banking relationships, obviously did not get a chance to participate at the level that they hoped they would. So that was one of the big challenges that we saw at the end of the process. 

Sandra Bruce: Mr. Buttle, can you provide insights into this question from the perspective on the Small Business Roundtable? 

Rhett Buttle: I think a lot of what Mr. Ivory said was true. That when the pandemic set on things moved very quickly and we saw Congress tried to figure out how to best react. And we did a lot of research at that time, we're doing a lot of outreach and engagement. We were hearing from business owners what they really needed was access to capital. So I think on initial onset, the idea behind the PPP was welcomed and a PPP, the Paycheck Protection Program, for those of you who aren't familiar, maybe listening in for the first time, I think has made important inroads into saving a lot of businesses. But because of the way the process had played out, there have been some inherent challenges in the process, particularly with reaching business owners of color. 

Rhett Buttle: I really think about it in three prongs, first is it seemed to lack transparency at the time. You think some of that was because people were moving so quickly, the government was trying to implement it. But it made a lot of the accountability measures very difficult. Some of the issues that we heard from business owners and organizations that we worked with, and Ramiro can tell you this best, challenges around disclosure of detailed loan information, folks not really understanding where the entry point is. Do they start with their borrower? Do they start with the federal government? They were confused by eligibility criteria, and then also a lot of concern about what the forgiveness process looked like, would it be forgiven? That made things challenging. 

Rhett Buttle: In addition to transparency, I think the second big bucket is just trust. There was a lot of, I think because of the way it was rolled out, there was not a lot of trust 
formed with a lot of small business owners. So that made it difficult to encourage business owners to take advantage of the program. So whether it was a lot of money there in the beginning, we're seeing now with the second round of PPP folks who might qualify to take advantage of the loan program they're not sure whether they want to because so many rules and regs have changed so fast and so quickly, and it's hard to control that information flow. 

Rhett Buttle: Then last piece, which is something I think we can all agree on is what I would call true engagement, which is really making sure that as these things are put together that there's true engagement not only from the groups around this conversation, but also thinking about the user at the end of the process. So part of this again, could have been because the process was so rushed and I think folks were really looking to try and get capital out on the streets. And that was an important piece, was the speed of this. But I think some of that has really led to the challenge of really making sure that the end user, small business owners across the country really had feedback into the process. 

Rhett Buttle: Some of those problems have been fixed in the second round, and I think we're seeing some of that. But a lot of those challenges have also led to hesitancy in the second round of people wanting to apply for potentially a second round of the PPP. I focus a lot on the PPP. I would say there has been some similar issues with EIDL the Economic Injury Disaster Loan Program. A lot of confusion about whether EIDL would be more of a grant based program, a loan based program, or would it be forgiven will it not be forgiven. We still see a lot of those issues playing out. So a lot of issues around communications and outreach and transparency and just building that really important trust that will continue to be important as some of these programs are still active. 

Sandra Bruce: Mr. Cavazos, we are also interested in your perspectives on behalf of the United States Hispanic Chamber of Commerce. 

Ramiro A. Cavazos:  Well, I agree with Mr. Ivory and Mr. Buttle that many of the decisions that were made early on had unintended consequences or did not resolve the initial need of capital for our small businesses. It was our experience early on that while everyone was very welcoming of the CARES Act and the initial traunch of funding, that there was a lack of clear guidelines as to the ability to access these dollars and apply for them. There was also a lack of clarity in the diversity of the data collection early on. There was not requirement anywhere from the Small Business Administration or from treasury or from the banks that would allow us to collect data accurately about the outcomes of where the lending would be going. So we had no idea early on if the African-American community, the Latino community, the Asian, or LGBT communities were being assisted or other communities of greatest need. 

Ramiro A. Cavazos: Prior to COVID or a small business community we're very honored to be a part of the Small Business Round Table with Rhett and his team. Small businesses were struggling already, there was an economy that looked good on the surface but many of our small businesses were not getting their fair access to procurement with the US government and local municipalities and states. And then of course, even our fortune 1,000 firms, their spend goals, which we've seen tremendous public relations mentions in the last year since the murder of George Floyd on top of the COVID 19 pandemic, we need to see results. And there was no way of tracking that data. I know that that's improved since then. 

Ramiro A. Cavazos: Also the reference the EIDL, the Economic Injury Disaster Loans, there were some guidelines that capped it at 10 employees, and that really affected many of our businesses who were applying for that immediate assistance. So part of the oversight, what could have been done better is immediately gathering small business owners from different communities to probe and inquire and in a focus group of how the program should be run. We don't know how those guidelines were put together, we also know there was very little communication between the US government and even the bankers themselves that were sitting down with small businesses owners seeking these applications for lending. 

Ramiro A. Cavazos: Only 27 days of capital reserve for most of our minority small businesses existed at the time. So with the initial Paycheck Protection Program applications, we know that if you did not have a banker relationship, and only 52% of Latino owned businesses had a relationship with a banker at a major financial institution, they did not get to see the light of day for any of their applications initially, most of those went to existing customers of banks as we've learned. And if they missed out in that first 30 day or 60 day period before the guidelines were opened up for other SBA lenders, we used to have 800 certified SBA lenders prior to COVID, now we have more than 5,000, which is great news. But that's one of the positive outcomes of this pandemic for the future, is that capital is now seen as readily available from different sources as opposed to just large financial institutions. 

Ramiro A. Cavazos: But if they missed that first 30 or 60 days, which the majority of Hispanic, black, and other minority small businesses did, it affected their credit scores also, if they missed that first mortgage payment on their building or did not pay their bills on time. And so by the time they were able to apply, they were already affected negatively because of those incidences. 

Ramiro A. Cavazos: The last point I wanted to make is we ourselves at the United States Hispanic Chamber of Commerce converted our website to a technical resource guide of all of the information that was coming out to be a resource to the 61 million Latinos around the country and our Hispanic chambers and our Hispanic business enterprises and others also. Because we realized the information was only in the English language. So we took it upon ourselves to translate all the information accurately into Spanish and that really was very beneficial. We partnered with Spanish media and general market media to really get the word out. Because I think Mr. Ivory said it earlier and Mr. Buttle, a lot of the information was not disseminated accurately by the banks or by the US government to reach the intended small business owners that were affected by the shutdown. So thank you very much. 

Rich Delmar: Thank you all gentlemen for those valuable perspectives. We're also interested in your perspective concerning the impact that the federal government's relief programs have had on borrower businesses. Specifically from each of your perspectives, are small businesses and low and moderate income borrowers benefiting from the pandemic relief of the CARES Act programs such as the Federal Reserve lending facilities and the PPP? If we could start with Mr. Cavazos on that. 

Ramiro A. Cavazos: It's been our experience that within the Hispanic business community that the small businesses, many of them have not benefited through those programs. I'll be as specific as I can be since this is an oversight committee seeking information. The Federal Reserve lending facility was not advertised accurately or in a manner that was widespread enough to our community. I mentioned the lack of bilingual information that was one given. But even some of the terms of the agreement were non-negotiable. The interest rate was set at a certain rate, the length of the lending was capped at five years. And many of our small business owners felt that they were in a no win situation. I just didn't know about the program, the Federal Reserve lending facility. But even then, the requirements and the ground rules were a non-negotiable and we're very restrictive with that five-year cap and then interest rate. And many of them felt they could not be able to do that. So that program really did not get the traction that it needed in the small business community as far as we saw. 

Ramiro A. Cavazos: The Paycheck Protection Program has helped the economy in general, there is no question that our economy would be in worse shape today if the program had not been rolled out, even with the things that we know did not work as well as it should. But our Hispanic business community, many of our Latinos and Latinas did not benefit through the Paycheck Protection Program. I mentioned only 52% of the 5 million Hispanic owned businesses had a banking relationship initially. And based on the numbers, once we were probing more about knowing and asking banks and CDFI, community development finance institutions, and other people providing capital, institutions within our community and even community banks, many of our Latino businesses had higher rates of closures and lower rates of approval for the Paycheck Protection Program. 

Ramiro A. Cavazos: So by our estimates, maybe fewer than 50,000 actual loans went to Hispanic owned businesses throughout the country. And based on the data that the SBS provided, maybe $2 billion to $3 billion of the overall $595 billion that was put out there for the Paycheck Protection Program actually has gone to the community that we represent at the US Hispanic Chamber of Commerce. So it's very clear to us that many of them if they've avoided challenges, it's because they have bartered with fellow Latino owned businesses or African-American owned businesses with no financial transaction. They worked directly with their providers to stem bills temporarily, but eventually those bills will come calling. I will say this, we've seen tremendous acts of goodwill between small businesses to support one another and even folks who might hold a mortgage on a small business that might be a restaurant to give them additional time to make payments. 

Ramiro A. Cavazos: So I think this pandemic has taught us that we are more interconnected than we ever thought no matter what our ethnic background is. But it's happened through intuition, it's happened through humanity, supporting one another, is through the tremendous struggle and suffering that we've seen in our communities. So by our estimates, of the 5 million Hispanic owned businesses, about 32% have closed permanently or closed temporarily. So these programs help the economy in general, at least the Paycheck Protection Program, but many of our Latino owned businesses. And in the Latino community, 25% of Latinos are Afro Latino. We have really been affected disproportionately because many of our businesses are in inner city, older neighborhoods, more challenges, but providing goods and services in economic deserts in parts of communities that are major cities that have been overlooked in the past. So for us it's going to be a big year of rebuilding and reinventing our businesses to learn how to use technology and this digital environment we're living in to rebuild their businesses and come back stronger. 

Ramiro A. Cavazos: I will conclude by just saying our community is very resilient. We've been down this road before, it might not have been COVID but it was a 9/11 or it was the great recession or it was OPEC in the '70s or it was just in general discrimination and lack of equitable contracting by governmental entities and private sector larger firms increasing their spend during a time when it actually made good business sense. So we're the economic engine of the future of this rebuild. There are 30 million small businesses in America and the economy will rebuild through us, and we need to acknowledge that right now, that we need more help for small businesses in general. 

Rich Delmar: Thank you very much, sir. Mr. Buttle, can you give the perspective of the Small Business Round Table? 

Rhett Buttle: Yeah. Look, I want to echo a lot of the sentiments that Ramiro has laid out on behalf of the US Hispanic Chamber and underline them. I think broadly it's important to know that for all of the flaws that the Paycheck Protection Program has had, thousands of small businesses have remained open and functional because of the PPP. So there's definitely been challenges with it and there still much needed improvements particularly who's accessing capital and how we get capital, quite frankly to more communities of color and business owners of color who are struggling to get. But it has been helpful to the economy and many studies have showed that. I think anecdotally we've seen evidence and stories that it's been helpful in that regard. So ways to build on that going forward I think will be important, and I think where Ramiro ended is just as important is that. 

Rhett Buttle: Small businesses are going to continue to need help, we are not completely through this. There's light at the end of the tunnel, obviously that we're all seeing with vaccine development. But there's going to continue to be an important role that the federal government is going to need to play. I think a lot of the attention has been been paid on the PPP, but it's just been such an important program. 

Rhett Buttle: As far as the Federal Reserve lending facilities, I also agree with a lot of Mr. Cavazo's comments around outreach education and accessibility. I think the largest benefit that we've seen from this, or at least the importance, has been the signal that the Federal Reserve lending facilities have given to the markets and the positive energy that has come from that. So while I think much of what was thought about by allowing this to become available could be implemented better, I think we have seen some positive signs in the market. 

Rhett Buttle: One of the big gaps that I've particularly seen as it relates to the Paycheck Protection Program that I just want to raise is really around loan forgiveness, there's been a lot of confusion. I think when you're a small business owner and you are unsure about the fate of your business, the last thing you want to do is take on more obligation. I think the lack of communication around how loan forgiveness works has been rather problematic, and I think in some ways almost a disservice to the government in terms of the time they've spent trying to figure it out. We have done a fair amount of research not only through Small Business Round Table but through a lot of organizations that we work with like the Re-Imagining Main Street Initiative. And it's very clear that most small business owners are truly not interested in this moment in a loan product but that they're actually more interested in a grants program. 

Rhett Buttle: I think we're seeing some indication of what that might look like under a Biden administration. I don't know if he'll go that far. But I think in a moment of national crisis, it's really important to be responsive to constituents. And while at the moment of which a forgivable loan is very similar to a grant, there's a lot of paperwork that's involved. I've seen a lot of business owners who are well-situated, business owners who have access to tools and resources really be tripped up by the PPP and the loan forgiveness program. So I think that's really something that we could look into. 

Rhett Buttle: Lastly I want to just drill down on a point that is important to really everyone on this call, which is just the challenges particularly with small business owners of color and what we've seen, not only anecdotally but in our research which some of this I highlighted at the top. Which was really around meetings the customer where they're at and doing the outreach and education. I know there's some conversation about how more outreach and education can be particularly done, there's been some conversation about a navigator program. I think we welcome some of those conversations to figure it out. But there's also been some challenges on the lender side as we heard about. So it's been interesting to see the new and important role that for example, FinTech has played in helping to Rhett Buttle: 
fill some of this gap and help re-imagine the way in which capital is flowing as well as the increased role that CFIs have been playing. And they're very important institutions as it relates to getting access to capital to communities of color. 

Rhett Buttle: And the second round now the Paycheck Protection Program, we did have an earlier period where CFIs were able to get ahead and the doors were opened, for lack of a better term, to them earlier. But we also saw that they weren't quite frankly prepared for that. So thinking about how we learn from this experience and build the infrastructure we need, not only to help us build back better from this program but also should we ever encounter another case. So I think some of the upsides that we've learned not only from the Paycheck Protection Program and the work through the Federal Reserve lending facility is really thinking through how do we reimagine capital in this moment to not only help business owners who are well situated, but to help business owners of all sizes, of all backgrounds, and really making sure that everyone who wants to be a small business owner in this country or who is a small business owner and wants to maintain their business has a fair shot. 

Rich Delmar: Thank you, sir. Mr. Harmon, can you give the perspective of the National Black Chamber of Commerce on this? 

John Harmon: I'm just honored to be here with such a distinguished group of colleagues because each and every one of them really spoke to what has adversely affected the black community. So 41% of black businesses are expected not to reopen as a result of this pandemic. The short answer is that the CARES Act and the other commensurate program stuff, soon the answer will be yes. But we cannot overlook the systemic challenges that black businesses face in America. Dr. King once said, "All that's good in America, blacks have a double portion of all this bad." 

John Harmon: So when you had this pandemic, it compounded the situation even more, the rollout from the federal government suspending all the affirmative action guidelines. So what that said to the black community, if you're not already in the pipeline and have a relationship with the federal government to access contracting, now the prohibition has been put in place or the moratorium, I'm sorry, you're not going to benefit from any other under this emergency order. So that's something we should take a closer look at to make sure that more black and brown businesses are under the tent so they could be ready, willing, and able to respond to opportunities. 

John Harmon: In terms of the CARES Act, one of the stumbles is you look at the act itself, it directed the Senate to prioritize minority, small, and women owned businesses coming out of the gate. We all know that it was about a top down approach from the banking system. Those banks taking the larger balance customers first. And so many of our members did not benefit for the first round and we didn't know if there will be a second round, fortunately there were a second round. 

John Harmon: Rhett talked about engagement, you can underscore that and take it a little higher and say credible engagement. We need to be around the table engaged before a crisis such that when a crisis should occur, we're all better prepared and in a better position to respond. So I think the level of engagement going forward in this outreach session today is important as we try to move forward together. Ramiro talked about the significance of the representation of Latino and black businesses in the US economy. It is critically important that when programs and policies and strategies and initiatives are set, we want to be assured that we are at the table and that we are contributing to those discussions. Chairman Ivory talked about the plight of black businesses in America and the targeted audience and the definition of what a small business tool he is. At my outset, I talked about 90% of black businesses are sole proprietorship. That in itself says that there needed to be more focus on strutting the black business sector, more focus on positioning them to have more grow and have more scalability and capacity as we coexist here in America. 

John Harmon: The other area that's not cited in our discussion today is the prioritization of unions and public contracting across America. I think the policies, when you hear elected officials saying unions are our priority, union jobs. When you say those terms in black communities, if you look at the numbers, we have a very small participation in publicly funded contracts, that is a problem. If you get the contract, you can get the capital. So I'm saying to this group today, I think this is a great conversation. But when we saw talked about equitable participation, and be in a position to really realize the American dream and start to create wealth for ourselves and subsequent perpetuation of our existence in the US economy, we have a lot of work to do. But on a positive note, the the National Black Chamber and its federation of chambers around the US we're willing to sit down at the table to help you all figure it out. I think that is so grossly important and desperately needed as we move forward. So I yield back my time for now, I look forward to continue the discussion today. 

Sandra Bruce: Great information. Let's move on to the next area of question. As the pandemic has persisted, the financial sector has undoubtedly identified evolving needs to address the resulting unprecedented circumstances. Have pandemic relief programs affected the ability of borrowers to avoid eviction? And if not, why? And do you have any suggestions about what can be done differently? Mr. Harmon, can you share your perspectives on this question? 

John Harmon: Again, thank you for the question and the opportunity to be here. It seems that every question that was asked today is a yes or no. Because the fact that there was federal resources made available did help out a lot of folks, it really did. But nonetheless, did it meet the need overall? Did it put people in a better place? And that's the question that we're grappling with. So we still have a lot of folks around the country that some have been evicted and without the federal money and more of a local government step again with moratoriums on evictions, that was helpful. And some of the banks had been working with many John Harmon: 
of their borrowers for payments, et cetera, et cetera. So all those measures have been helpful, but then there's going to be a day when that bill is going to have to be met. And unfortunately some folks have not been able to meet it and they found themselves on the streets. 

John Harmon: So when we talk about evictions, this small business is involved in this as well, there are some men and women that own one, two, three, four, five, maybe a handful of units where they're running out the folks, and many of them have not been well capitalized as a result of this pandemic. But for some of the resources from the federal and state and local governments, clearly they would have been in a worst predicament than they currently are. Then you compound the fact with those who have large apartment buildings, multiple units in various parts of city, states, as well as counties, the level of devastation on them is compounded even more. So I think in terms of a solution we all always got to think of how we can make more grant resources available in terms of loans that could have some generous and, or deferments, payment deferment would make a difference. 

John Harmon: But working more closely with our banking systems and giving them the support that they need so they can be a little more understanding and or generous. So striking that balance has been very difficult for everybody. But I think the point that Ramiro made earlier was about how unfortunately this crisis has brought us more closely together to really embrace us this whole sense of being Americans in this United States and working more closely together. So my word to this new administration is that we need to strengthen our engagement, we need to have more conversations like this with the people on this conversation today so you can get a boots on the ground perspective from these men that are here today and women that serve in similar capacity or engaging with our constituency every day. We have to be optimistic because we have so many depending on us. The service advocates frame their messages to you all who have the resources and the ability to affect change and implement policy. 

John Harmon: But I would say as I bring my statements to a close is there needs to be more attention paid to black and Latino businesses in America in terms of are they getting the requisite access to opportunities that's going to enable them to bring their business plans to fruition in a meaningful and equitable way? Are they considered as a real participant in the US economy, in terms of making sure that the resources are there, that these are a priority and not some other protected class because of their financing of campaigns. These are the realities that we deal with here in America, and we want to be heard today. There is a lot of accountability measures that could be taken in terms of the monitoring of the distribution of funds, the monitoring of contracts, public contracts, that monitoring is not being done. You may have goals in place. 

John Harmon: So intent and outcome are two different measures and so we need to somehow coalesce those on the same access so that we get that right. But black and Brown businesses are being marginalized and not being equitably included in these initiatives. There's a lot of overtures made about how important we are in terms of getting people elected, but at the end of the day, is there a level of reciprocity? And so I think that's what we're saying. We are here today because we want to be a part of what's going on in America, but we want to be respected. Relevance underscore, but we want it to be equitable. 

Sandra Bruce: Mr. Buttle, can you share your insights on this question? 

Rhett Buttle: This is actually something I've been thinking a little bit about because I feel like in a lot of the conversation around PPP and loans, there hasn't been enough conversation around what's going on in the housing market in particular as it relates to eviction. And obviously for many small business owners who do own commercial property, this is a serious issue. Early on when the Paycheck Protection Program was launched, there was a lot of questions about whether the PPP could be used for rent and mortgage. I think one of the insights that we've been missing as we've been trying to respond to this pandemic is that small businesses definitely have an effect on the housing market, the two are completely intertwined. I think that elected officials have been thinking about how do we address these crisis separately and talking about small businesses needing help and then talking about renters. But in many cases, small business owners are renters, and we're seeing that in some of our cities, obviously not only with their home but with their commercial properties. 

Rhett Buttle: Now, some of the provisions in the rent, mortgage, and expenses qualified expense was a welcome inclusion. But as we've talked about, there's been some challenges obviously with forgiveness and the impact that that's had. So I think as we think about what are new opportunities or where to go from here, it will be interesting to see whether we will be left with any of the remaining of the PPP funds, whether they will all be used. I think this is something we need to think a lot about. We've seen multiple states and cities quite frankly hop into action here because of a little bit of lack of federal leadership I think on evictions and foreclosures and those sorts of things. So I think there's opportunities to think about, should we have resources left or in future rounds of opportunity to help small business, how we really think about how to close this gap as it relates to evictions as well. 

Rhett Buttle: Because as I've said, I think small businesses are going to have a huge effect on the market as it relates to not only their own housing but also obviously those who have and operate in the commercial space as well. A lot of this has been challenging and some of it's been worked out, small owner, landlord to landlord. As we know that works out for some who have the ability but that doesn't work out for all. So I think there's an opportunity here for federal leadership. 

Sandra Bruce: Let's move on to Mr. Cavazos, can you provide the insight into this question as it relates to the constituents and the US Hispanic Chamber of Commerce? 

Ramiro A. Cavazos: There is nothing more important in our nation than a family having a safe and a clean home for their family and their children. The highest percentage of costs for income earners in this country goes to housing itself. Before COVID, there existed an affordable housing crisis in this country. As the economy has grown and expanded and cities have relied on continued rebuilding and growth, especially in inner city neighborhoods, primarily places where the ecosystem of families was tied to our black and brown communities, it's very clear to me that we already had challenges with housing, especially affordable housing. Many of the jobs that are held by frontline workers in America were jobs where transportation was a challenge, childcare was a challenge for families, and just the ability to get back and forth from your job was very expensive just to get there and the time demand. If you were taking public transportation, it was additional time on an American family. 

Ramiro A. Cavazos: What we saw with COVID-19, Ms. Bruce, was that housing was stressed even more during this period as jobs were lost, as incomes were diminished, even small business owners who might've had a temporary extension of their mortgage or their lease at a commercial space, their own household, whether they were renting or holding a mortgage received considerable challenges because of the diminishment of incomes and the loss of an income earner or both income earners. In addition, the black and brown communities were families that are multi-generational, we're a younger population. So when COVID hit and even with a Paycheck Protection Program, many small business owners did not apply for the Paycheck Protection Program. Not only the guidelines that we spoke about, they were confusing or not, clearly reaching the targeted audience, but also because they had their families at home, their children who were having to access their educational needs directly in a virtual space, and many of them were younger elementary school age children in Latino families and black families. 

Ramiro A. Cavazos: And so the challenge of maintaining a job or going to work and reemploying workers, there were quality of life decisions that had to be made by our collective communities. And those quality of life decisions are culturally decisions that we make primarily first before thinking about some of the milestones that are seen as traditional American check marks that we need to have. So for us we believe that there needs to be a renewed commitment to housing. We have laid bare in our nation over the last year the homelessness problem. Our veterans, one out of every four veterans in America is a black or brown or minority individual. They have served their country, but came back weakened by that exposure. And we don't take care of our elderly as well as we should in this nation. In our communities, the elderly are very important but the systems are not working. 

Ramiro A. Cavazos: So for us we believe that the constant gutting of the Department of Housing and Urban Development over the years has greatly diminished the creativity and the private public partnerships that are available to find mixed housing, affordable housing, and also the ability for us to interact with one another as a civil Americans in neighborhoods that are not blocked off from the rest of the city. So I would just like to state that we need to have a higher priority on housing because families demanded families, needed for them to be healthy, and to interact in the workforce. It's been laid even more bare by this COVID-19 crisis, we've had homeless camps spring up in communities on public land or even private land out of necessity by people who no one cares about any longer and no one is reaching out to any more. 

Ramiro A. Cavazos: So we have a tremendous task before us and the new administration. We stand ready with my great colleagues on this panel to work hard and not only help small businesses revive our economy, but to pay attention and to care for one another, especially our low income and minority communities that have been further exposed through this economic recession. 

Rich Delmar: Thank you very much, gentlemen. Last topic that we want to address, we certainly appreciate your perspectives and the suggestions that you've made on your constituencies. Now we want to go to, we've been asking the questions, but if there are issues of concerns to you which we have not identified in the discussion so far such as segments of the market that have been overlooked we'd certainly appreciate your suggestions on how to address them. Can we start with you, Mr. Harmon for the perspective of the National Black Chamber of Commerce? 

John Harmon: Well, again thank you all for allowing me and my colleagues at participate. The area that I alluded to earlier, project labor agreements, is a huge problem as it relates to black businesses getting equitable access to publicly funded projects. A clear example was when the Woodrow Wilson Bridge was done, they had I think on the Maryland side project labor agreements and then on the Virginia side no project labor agreements. I think it's well documented how that played out. What I would suggest one, as I mentioned earlier, get some type of monitoring system in place that's in real time so that we can track the project in terms of it's participation in real time versus waiting until the project's done and then going back and finding out that you've fallen short. 

John Harmon: Similar to projects funded through HUD, same thing, the same situation is occurring throughout America. In communities where black and brown individuals live, they're not getting equitable access to projects even in their own communities because of certain prerequisites that serve as barriers that are keeping people out. I would suggest that we consider having a threshold, project under $100 million should be exempt from a project labor agreement. We can pay [inaudible 00:56:47] ways. But having our members pay benefits to participate on a project, you're not getting equitable inclusion, I think is ridiculous. 

John Harmon: We have seen more engagement of banks in the second round, the third round. And in part working with some of our local banking associations, they've coalesced their members to be a little more attentive to the needs of our 
members, and as a result it is working out more favorably this time around, so we're encouraged by that. But again, let's continue these discussions, but please take a look at the numbers in terms of contracts being let and resources being let from your vantage point, and it will confirm what I'm saying. That there's some huge gaps that I think do dial out like this. And just focus on closing those gaps is going to be more meaningful for the constituencies that's represented on this conversation today. Thank you. 

Rich Delmar: Thank you, sir. I had actually meant to solicit Mr. Ivory's views on that too. So could I ask Mr. Ivory to provide your perspective in addition. 

Larry Ivory: It's my pleasure, Rich. Well, let me say this, that there's a comment that says if you're not at the table, you're on the menu. Thank you guys for giving us an opportunity to be at the table. I want to highlight just a couple of quick things. One, the PPE they came out which was for the mask, the gowns, and everything else. When we took a look at the members, a lot of smart business people were pivoting and they were trying to get to a place where they could offer the supplies. Unfortunately, we took a look at the numbers across the country, less than 1% of African-Americans had a chance to participate not only on a federal level, but on a local level at the same time. I think we can do a better job when it comes to offering the type of things that came out of this unfortunate incident. 

Larry Ivory: The other thing I think is important for us to do is that from a marketing and advertising point of view, is that we have to make sure as we take a look at the things that we want to better, that we have to be culturally sensitive, and I'll give you an example real quick. In the healthcare space there are examples, when you have culturally sensitive people, working African-Americans delivering healthcare to African-Americans, the healthcare outcomes is far dramatically better. So what I'm saying is that I think as we implement any programs, we got to make sure that we understand what's the best way and the easiest way to communicate with African Americans. Small black papers will have enormous amount of credibility, didn't really participate on a whole lot. So I think we have to be culturally sensitive and we got to do a better job of getting to the radio, the black radio stations, newspapers, and TV stations. Because they have greater credibility, I think it's important for us to do that. 

Larry Ivory: The other thing that I would say is that the chambers of commerce should be the vehicle by which we invest more time and energy because they are the advocates of small business. Unfortunately, a lot of the chambers did not get a chance to participate in the PPP unfortunately. I think if we focus on where we can get the biggest return on investment, investing in chambers of commerce, Hispanic and black chambers of the commerce, is really the right thing to do in order to get the type of results. 

Larry Ivory: The last thing I would say is that with the current administration, we put a white paper together that dealt with a very serious problem of credit. Because three out of five African Americans have some credit challenges. And we need to have a credit enhancement strategy globally because there's a pandemic. When you think about the real gravity that so many small businesses and so many African-Americans can't get real credit from traditional lenders because of their credit score, we have to, in my opinion, to have a credit enhancement strategy across the United States where we impact millions of people who are moving from bad credit to good credit. 

Larry Ivory: And my last comments I will say is that we live in one of the greatest countries in the world, there's no question about it. And there's a comment that says that a pessimist may be right in the long run but the optimist has a better time on the trip, lean to enjoy the trip. I think we're going to come back stronger and better, I think this more perfect union is as us, I challenge it to be better, and I definitely appreciate the opportunity, Rich, Sandra, and all the team for having such an insightful dialogue and to all our colleagues who we're on the call together. Thank you so much for giving us this opportunity to share our thoughts with you. 

Rich Delmar: Thank you very much to both of you, that was very, very helpful. Mr. Buttle, can you add to this discussion? 

Rhett Buttle: I don't know if I can add anything helpful, but I'll add some things. I also just want to thank my fellow panelists and thank you all for bringing this together. I think a few pieces that have stuck out for me in my experience over the last year of working to bridge some of this gap between the small business community and the federal relief programs, as well as just what I'm hearing from this conversation, I think the response and the quickness of it was important. But I think we're learning that intentionality is really important, and I think that that is a common theme across this conversation as well as something that we have to think about in the go forward. 

Rhett Buttle: I think that looks in multiple ways, we've talked a lot about outreach and engagement, but I also think that the government has all sorts of tools and levers right through it's ability to issue guidance, rules, and regulations. A lot of that can be really important trends that it sends to stakeholders like us as well as to the markets. I think being really intentional about the way that those things are approached, and maybe now that things are a little bit less intense and with an incoming administration, I think we'll see more of that. But I think that this intentional approach because I think as you're hearing a lot of times we talk in broad terms, we are one small business community but there's lots of different segments of that community. And a lot of folks don't really understand sole proprietors versus business owners with employees and the experience that many business owners of colors go through. 

Rhett Buttle: We've talked a lot today about the importance of Latino and African-American business. Our colleagues at the Asian Chamber who aren't here with us today have encountered terrible and horrific racism in light of the onset of COVID-19 because some of the rhetoric that has been spewed. And that has led to serious and unique challenge for the Asian American and Pacific Islander community. And they're in need as well of important and intentional attention from their government because they are an important part of this ecosystem. I know that all of us on this call believe that when we lift up all communities, we all do better. So I think that's important to think about not only outreach, but the tools and how do we be intentional about the communities. 

Rhett Buttle: Then I think the last piece for me is just really this concept of how we think about how we move capital in our country. We're so fortunate, as Mr. Harmon was saying, to live in a country that has advanced technology. We talked a little bit about some of these opportunities where I think the PPP did in some ways force us into becoming more comfortable with technology, particularly opportunities between the government and the private sector to partner to move capital faster to small business owners. I've been really impressed by some of the things that we've done there. And I think that we need to just really think about how do we focus on that trend because I think there's opportunities to increase our impact, if we think about new ways to do so, and also relieve the burden on our government as well. So those are some of my wrap up thoughts. Again, great thanks again for having this important conversation and look forward to the next one. 

Rich Delmar: Mr. Cavazos, can we get the perspective of you and your organization as well? 

Ramiro A. Cavazos: There's a saying that says that sometimes storms come our way not to disrupt but to clear the path forward. I really believe that 2021 and the years following will be years that we need to clear the path forward with the learnings of this difficult last year. Not just with the murder of George Floyd, with the deepening recession that our country's experiencing, but for the first time I'm in the history of the world is a global recession. Also of course the pandemic and our recovery from this virus that has affected so many American families and this disproportionately affected our African-American community and our Latino and Asian communities. 

Ramiro A. Cavazos: It's very important that I share that this is an opportunity that only comes once in a lifetime for good and bad reasons. I wanted to share that on behalf of the United States Hispanic Chamber of Commerce, it's a privilege to be here with each of you. But it's my privilege to work for our small Latino and women owned business. We have asked the new administration to create a task force to focus on small minority and women owned businesses. We know that the new administration has tremendous challenges, but also inherited more than a full plate of efforts that need to be resolved and solutions found for. We feel that it's important that because of the pre-COVID and post-COVID challenges of what we have discussed today, is that we create a taskforce to focus our attention, a White House task force on small, minority, and women owned businesses. 

Ramiro A. Cavazos: I also believe, Rich and Sandra, that we need more focus on technical assistance for our firms. There's a great availability of minority firms, Hispanic, Black, Asian firms, LGBTQ firms, but many of them are not receiving the information that they need. If they didn't receive information about the PPP and the EIDL and of course the Federal Reserve lending facilities, it's very clear that there are some gaps that we need to resolve in getting information out there and meet them where they are, as Rhett said. The pipes are broken in Washington with many of our systems and the solution is not to bring in more mops and clear up the water, it's to fix the plumbing permanently with these systems. Less than 7% contracting with small, minority, women owned businesses by the US government is not a good economic formula. We are the majority of the population, we are the majority of the tax paying citizens, and it only makes good business sense that the largest buying service in the world, the US government and the Department of Defense, increase its spend with our black and Brown and Asian communities. 

Ramiro A. Cavazos: I also want to stress that the president and the vice president should use their bully pulpit in the White House to encourage every secretary of every department to have spend goals and to hold them accountable. We can't just have the most diverse cabinet we've ever had and feel that we've solved their problems by appointing people who represent our community. Obviously they're decision-makers, but there's no question that political justice is important, social justice is important, but the greatest opportunity to create wealth and prosperity in our minority business community is by having equitable redistribution of public dollars and private sector dollars to our African-American, our Hispanic, our Asian, and our LGBT communities. We have been left out of those tables, as was said by Mr. Ivory, and we need to make sure that we're at every table that matters in this nation, public and private. This is our one chance to do it right and get it right. 

Ramiro A. Cavazos: In addition, we need to create a debt and equity facility at the federal government, and use Department of Treasury that allows our black and brown and Asian communities to be the wealth managers and the money managers. And that's a great way of creating wealth in our financial services community and providing acquisition opportunities to rebuild our businesses. 

Ramiro A. Cavazos: I would just conclude by saying that it's important that we restore our economy knowing that it will be restored on the backs of our minority community and our small business community. I feel that it's very important that the work of the PRAC that it be connected to the new administration and that the priorities and the strategy moving forward, that blueprint for success will come from our communities that are the most effected, that have been excluded for many, many years. So on behalf of the United States Hispanic Chamber of Commerce, it's been my privilege to be with you today. Thank you for the work of the oversight committee. Thank you to my colleagues on the panel. We are passionate about small business not because we're passionate in general, but we're passionate because it will rebuild our US economy, the largest economy in the world, by making sure that we don't leave anyone out. A rising tide will lift all boats and in turn our economy will be more powerful. 

Rich Delmar: Thank you very much, sir. Thank you all of you gentlemen, all of the panelists today. On behalf of the PRAC and the IG community that's responsible for oversight and identifying deficiencies and identifying best practices, we couldn't do it without you. We greatly appreciate the time you've taken to share your views and we look forward to having this presentation posted on the PRACs website so that interested parties can get the benefit of what you've told us. Sandra. 

Sandra Bruce: Before we close, let me thank this esteemed panel again for providing such great information and insight into our oversight areas within the financial sector. It is critical that we hear and consider your specialized on the ground expertise and experiences concerning how pandemic programs have operated and how the federal government is meeting the challenges that it has been called upon to meet in these unprecedented times. We as an oversight community will greatly benefit from what you have shared with us today. And we will carefully consider your thoughts and recommendations as we move forward with our oversight activities and plan our future work, especially as we anticipate additional pandemic response funding and programs under President Biden's administration. So again, on behalf of the Pandemic Response Accountability Committee, I thank you for carving out some time in your busy day to be with us and for the insights you have shared. Take really good care and continue to stay safe everyone. 

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