Oversight in the Age of Corona
Director of Government Relations
Congress passed the CARES Act in March to help provide relief to individuals, businesses, state and local governments, and others during the ongoing COVID-19 pandemic. This $2 trillion package expanded unemployment insurance, provided over $850 billion for loan, grant, and investment programs to rescue and bolster businesses of all sizes, and additional funding for state and local governments and the healthcare system. In addition, in order to help American households, the CARES Act authorized relief payments, called Economic Impact Payments (EIP), of up to $1,200 for individuals and $2,400 for married couples and tasked the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) with distributing these funds.
As of May 8th, the IRS reports that it has disbursed approximately $200 billion to 130 million Americans.
Given the unprecedented size of the CARES Act, it is only natural that Congress would want to ensure that waste, fraud, and abuse are minimized and exercise as much oversight over the distribution of these funds as is possible.
To do this, Congress created two new mechanism in the CARES Act for oversight of the business focused programs. First, they created a congressional oversight panel, called the Congressional Oversight Commission (Commission). According to the CARES Act, the Commission is tasked with “…conducting oversight of the implementation of the business loan, grant, and investment programs under Title IV of the CARES Act by the Department of the Treasury and the Board of Governors of the Federal Reserve System.” The Commission is also tasked with submitting reports on the findings of their oversight activity to Congress as well.
Congress also created an inspector general position at Treasury to oversee the business loan, grant, and investment programs that were created by Title IV of the CARES Act, and perhaps some of the other non-business related programs as well. This new inspector general position is called the Special Inspector General for Pandemic Recovery (SIGPR). According the statute the SIGPR shall:
“…conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments made by the Secretary of the Treasury under any program established by the Secretary under this Act, and the management by the Secretary of any program established under this Act…”
On April 3rd, President Trump announced that he would nominate Brian D. Miller to be Special Inspector General for Pandemic Recovery. Mr. Miller currently serves in the Office of White House Counsel and has previously served as Inspector General for the General Services Administration.
The Senate Banking Committee held a hearing on Mr. Miller’s nomination on May 5th. This is just the first step in the confirmation process. The full Senate Banking Committee will vote on whether or not to send Mr. Miller’s nomination to the full Senate for consideration. Only after a favorable vote from the Banking Committee would the full Senate consider his nomination.
While there are no oversight provisions in the CARES Act that directly address Economic Impact Payments, in order to prepare for the road ahead, it is best to assume that a broad approach to oversight will be taken by the Commission and the SIGPR. It is possible these two entities will examine how Treasury and IRS implemented the Economic Impact Payment program, how financial institutions assisted Treasury/IRS in this process, and what financial institutions did to ensure their customers quickly had access to their full funds.
Regardless of what happens with the Commission and SIGPR though, congressional committees will also play a part in the CARES Act oversight. The House Oversight and Reform Committee, House Ways & Means Committee, House Financial Services Committee, Senate Finance Committee, Senate Banking Committee, and Senate Homeland Security and Governmental Affairs Committee will all likely hold oversight hearings and issue reports on the CARES Act.
When it comes to the Economic Impact Payment program specifically, the House Ways and Means Committee, Senate Finance Committee, House Financial Services Committee, and Senate Banking Committee are the most likely to examine the Economic Impact Payment program. The House Financial Services and Senate Banking Committees have the relevant jurisdiction to examine how financial institutions aided both Treasury and IRS in the distribution of Economic Impact Payments and ensured that their customers were able to access their full payment expeditiously.
The IPA will be keeping track of all hearings, reports, etc. from the various entities discussed above and will be keeping our membership updated through our Government Relations Working Group (GRWG). Additionally, the IPA will continue the conversation with policymakers on how the prepaid industry serves governments, businesses, and Americans of all backgrounds, and how the industry responded to the COVID-19 crisis.
If you would like to join to the GRWG, please contact Grant Hannah, Director of Government Affairs, at firstname.lastname@example.org.
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