U.S. Sens. Ben Cardin (D-MD) and Joni Ernst (R-IA) are urging the Small Business Administration (SBA) to rework proposed changes to its loan underwriting program that would allow financial technology companies to participate as lenders, FinancialRegNews.com reported. The lawmakers were both opposed to two proposed SBA rules: The Affiliation and Lending Criteria for the SBA Business Loan Programs, 87 FR 64724, and Small Business Lending Company (SBLC) Moratorium Rescission and Removal of the Requirement for a Loan Authorization, 87 FR 66963. The senators said these proposed rules would loosen key 7(a) program requirements and remove critical safeguards designed to prevent fraud and abuse. Specifically, they said it would allow an unlimited number of non-bank financial technology companies, or fintechs, to participate as lenders. The lawmakers contend that many of the fintechs were among those responsible for issuing billions of dollars in what turned out to be Paycheck Protection Program (PPP) fraud.
