The Biden administration plans to aggressively pursue thousands of small businesses that may have missed payments on an estimated $30 billion in overdue loans.
The Biden administration plans to more aggressively pursue thousands of small businesses with past-due pandemic loans, reversing an earlier policy that saw the U.S. government stop short in its efforts to collect an estimated $30 billion in delinquent debt.
The new approach, announced Thursday, arrives months after federal watchdogs and congressional lawmakers first blasted the administration for its leniency, warning that the government risked breaking the law — and exacerbating its losses — if it didn’t try harder to get the money back.
Before most of those EIDL bills became due, however, the Small Business Administration enacted a policy in April 2022 to forgo some collection activities on past-due loans of $100,000 or less, The Washington Post first reported earlier this year.
Explaining its policy, SBA officials said at the time it would have cost too much money to refer each delinquent loan to the Treasury Department, which can impose the toughest punishments on late borrowers, including wage garnishment.
But the rationale troubled the agency’s inspector general, Hannibal “Mike” Ware, whose office in September warned that the SBA policy “could incentivize other COVID-19 EIDL recipients to stop paying on their loans.”
The SBA previously considered other approaches to manage its beleaguered EIDL portfolio, at one point hiring an outside consultant that later recommended the agency sell its fuller stable of loans in a bid to minimize its losses.
The original article contains 948 words, the summary contains 228 words. Saved 76%. I’m a bot and I’m open source!
This is the best summary I could come up with:
The Biden administration plans to more aggressively pursue thousands of small businesses with past-due pandemic loans, reversing an earlier policy that saw the U.S. government stop short in its efforts to collect an estimated $30 billion in delinquent debt.
The new approach, announced Thursday, arrives months after federal watchdogs and congressional lawmakers first blasted the administration for its leniency, warning that the government risked breaking the law — and exacerbating its losses — if it didn’t try harder to get the money back.
Before most of those EIDL bills became due, however, the Small Business Administration enacted a policy in April 2022 to forgo some collection activities on past-due loans of $100,000 or less, The Washington Post first reported earlier this year.
Explaining its policy, SBA officials said at the time it would have cost too much money to refer each delinquent loan to the Treasury Department, which can impose the toughest punishments on late borrowers, including wage garnishment.
But the rationale troubled the agency’s inspector general, Hannibal “Mike” Ware, whose office in September warned that the SBA policy “could incentivize other COVID-19 EIDL recipients to stop paying on their loans.”
The SBA previously considered other approaches to manage its beleaguered EIDL portfolio, at one point hiring an outside consultant that later recommended the agency sell its fuller stable of loans in a bid to minimize its losses.
The original article contains 948 words, the summary contains 228 words. Saved 76%. I’m a bot and I’m open source!