Lankford Introduces Bill to Stop Biden Admin’s Big Government Lending Scheme

OKLAHOMA CITY, OK – Senators James Lankford (R-OK), Tim Scott (R-SC), and John Kennedy (R-LA), along with their Republican colleagues, introduced the Protecting Access to Credit for Small Businesses Act to prohibit the Biden Administration from enacting their plan to make the Small Business Administration (SBA) a direct lender, which would force community banks and credit unions—who already provide loans—into competition with the government.

“The only thing the Biden Administration loves more than big, socialist government is more, big, socialist government,” said Lankford. “Oklahoma’s community banks and credit unions work hard every day to make sure our small businesses have access to capital to sustain and grow. Forcing them to compete with the Small Business Administration to provide direct lending is one more way the Biden Administration is growing government and hurting private business. That’s unacceptable, and our bill would stop their scheme.”

“When acting as a direct lender, the SBA has a consistent history of failure and inefficiency when compared to the private sector,” said Scott. “The Administration’s proposal is just a vehicle for a big government overreach into nearly all aspects of American life and private institutions. There’s simply no reason to use the federal government to funnel tax dollars that will later be loaned back to small businesses.”

“Fraud and inefficiency characterize the Small Business Administration’s history in direct lending. The government shouldn’t crowd out private lenders that are already doing a good job getting funds to the small businesses that need them,” said Kennedy. “I’m proud to partner with Sen. Scott to stop the SBA from replacing private lenders and those in our communities with Washington bureaucrats.”

The bill is cosponsored by Senators Jim Risch (R-ID), Kevin Cramer (R-ND), Chuck Grassley (R-IA), Steve Daines (R-MT), Joni Ernst (R-IA), John Cornyn (R-TX), Ted Budd (R-NC), Tom Cotton (R-AR), Mike Crapo (R-ID), Rick Scott (R-FL), and Mike Braun (R-IN).

President Biden’s Fiscal Year 2025 budget includes a proposal to allow the SBA to directly make loans under the 7(a) lending program. However, the SBA has a history of performing poorly in lending programs compared to the private sector. The SBA Office of the Inspector General estimated in 2023 that the federal government Economic Injury Disaster Loan program, which was a direct-lending program, had $136 billion in potential fraud – that is 33% of total funds disbursed by the program. 

Lankford has consistently pushed back on the Biden Administration’s attempted federal overreach into the direct lending space, including introducing the Protecting Access to Credit for Small Businesses Act during the 117th Congress and sending a letter to Senate Majority Leader Chuck Schumer, then-Speaker Nancy Pelosi, and then-House and Senate Small Business Committee Chairs Ben Cardin and Nydia Velázquez warning against their plan to make the SBA a direct lender through the Democrats’ reckless tax and spending bill. 

The legislation is supported by American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, Bank Policy Institute, and America’s Credit Unions.