Office of Comptroller Records Could Reveal Why Coronavirus Relief Isn’t Reaching Up to 90% of Businesses Owned by People of Color

Ahead of Otting Testimony Before Senate Banking Committee, SBA IG Chides Administration, Emphasizes Need to Prioritize Underserved, Rural Markets

WASHINGTON, May 12th, 2020 – Democracy Forward and the California Reinvestment Coalition filed a Freedom of Information Act request for all records on the guidance the Office of the Comptroller of the Currency (OCC) provided financial institutions for tracking how loans were distributed to small businesses owned by women and people of color under the Small Business Administration’s Paycheck Protection Program (PPP). OCC issued instructions to banks to collect demographic lending data only after an expert report showed thatup to 90% of entrepreneurs of color are shut out of PPP funds.

“As small businesses across America face the devastating financial consequences of the ongoing pandemic, it is critical that small business owners who have historically been left on the sidelines have equal access to the capital provided by the Paycheck Protection Program,” said Democracy Forward Communications Director Charisma Troiano. “Our request for records will help reveal the extent to which the Trump administration failed to make small businesses particularly those owned by people of color and women — a priority in securing PPP funds.”

Recent reports show that seven weeks after the CARES Act went into effect, the implementation of the program has denied the most affected business owners equitable access to the emergency funds. One study estimates that 95% of Black-owned businesses, 91% of Latino-owned businesses, 91% of Native Hawaiian or Pacific-Islander-owned businesses, and 75% of Asian-owned businesses are likely to be denied a loan by a traditional bank or credit union. As a result, OCC urged banks providing loans under PPP to “prudently document their implementation and lending decisions” and to “track the PPP loans made to small business borrowers.” That information could be used to assess lenders’ compliance with the Community Reinvestment Act, a landmark civil rights law that works to combat redlining, and it would help reveal the extent of the discrimination small business owners are facing.

Last week, the Inspector General for the Small Business Administration chided the agency for failing to provide guidance about prioritizing small business lending to underserved communities. The IG was clear that, because of the administration’s failure to do so, “rural, minority and women-owned businesses may not have received the loans as intended.” Twenty-four states’ attorneys general have also called for changes to PPP to ensure equitable distribution of the funds and that the small businesses who have been hardest hit by the ongoing coronavirus emergency are reached. 

“The American people deserve to know the truth about how PPP loans have helped or failed to help small businesses owned by people of color, women, and immigrants,” said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. “Historically, people of color have faced redlining that has made it hard to have access to capital. Our FOIA seeks to bring accountability and transparency to ensure that small businesses in historically disenfranchised communities are not left out yet again. We have the right to know what big banks are doing with our public funds, and to uncover any complaints submitted by small businesses.”

Release of the requested data is critical. In the midst of the pandemic, the administration has doubled down on its efforts to dismantle the Community Reinvestment Act. Comptroller of the Currency Joseph Otting is scheduled to testify on Tuesday at a Senate oversight hearing examining the financial regulators. Members of the Senate have pushed back on the administration’s efforts to relax financial protections, arguing that the public health crisis is “not the time to push Wall Street’s deregulatory agenda.”

Democracy Forward and CRC’s FOIA request seeks records that would help reveal the degree to which PPP loans have been inequitably distributed, including: 

  1. All records submitted by financial institutions to OCC regarding loans made under the Small Business Administration’s Paycheck Protection Program
  2. All instructions, guidance, or direction from OCC to financial institutions regarding financial institutions’ data collection obligations regarding loans made under the PPP 
  3. All OCC communications regarding the degree to which national banks were originating PPP loans to business owners of color and businesses that are located in and/or serve low and moderate-income communities or communities of color

The administration has a track record of flouting its legal obligations to facilitate enforcement of anti-discrimination laws that protect small businesses — especially those owned by women and people of color — from discriminatory financial institutions. Recently — but only in response to a lawsuit filed by Democracy Forward, CRC, and small business owners — the administration agreed to concrete, court-ordered deadlines for implementing Section 1071 of the Dodd-Frank Act, which requires collection and disclosure of data on lending to women-owned businesses, businesses owned by people of color, and small businesses. 

The FOIA request was submitted to OCC on May 11, 2020.


The California Reinvestment Coalition (CRC)  is the largest statewide community reinvestment coalition in the country, with over 300 member organizations across California that provide services to tens of thousands of low- income residents. CRC members include affordable housing developers, community development financial institutions, housing counseling agencies, small business technical assistance providers, legal services agencies, and community-based organizations.

Democracy Forward is a nonprofit legal organization that scrutinizes Executive Branch activity across policy areas, represents clients in litigation to challenge unlawful actions, and educates the public when the White House or federal agencies break the law. 

Press Contact

Fermin Vasquez

(213) 924-7661 

Charisma Troiano

(202) 701-1781