Important Policy Update: SBA Recall Services & Treasury Guidance
The U.S. Treasury recently issued a clarification regarding COVID EIDL and COVID PPP debts that have been transferred into the Treasury's Cross-Servicing program. Treasury explained that it does not independently return debts to the Small Business Administration in mass or on an individual basis because Treasury acts strictly as the federal government's collection agent once a debt has been referred. Under the Treasury Financial Manual governing Cross-Servicing, the original creditor agency retains ownership and ultimate authority over the debt, including whether a debt may be recalled or returned to agency servicing. In other words, Treasury cannot simply decide to send a debt back to the SBA unless the conditions within federal debt collection procedures are met and the originating agency authorizes that action.
The clarification also addressed what happens when a debt progresses further in the federal collection pipeline. If a debt is referred to a private collection agency (PCA) through the Treasury Cross-Servicing program, Treasury itself no longer manages the active collection file. At that stage, borrowers must communicate directly with the assigned collection agency regarding payment arrangements or disputes. Borrowers whose debts remain within Treasury Cross-Servicing may still submit dispute requests to Treasury for review; however, once a debt has been placed with a contracted collection agency, that agency becomes the primary point of contact for handling disputes and collection matters.
This framework is also the reason SmallBiz Recon™ separates the submission process for different requests. Dispute packages are submitted to the U.S. Treasury because Treasury administers the Cross-Servicing collection program and reviews disputes while the account is active within that system. Recall or reinstatement requests, however, must be directed to the Small Business Administration, since the SBA remains the original creditor and retains the authority to determine whether a debt may be recalled or returned to SBA servicing.
What This Means for Existing Customers
- Recall Only packages: If you have purchased a Recall / Reinstatement Only request package, there would be no change to that package, but you may also add a discounted Treasury Dispute package.
- Discounted bundles with Recall: Our multi-service packages already contain deep discounts and contain the Treasury dispute letter and servicing letters valued at $500 each. However, you may add a Congressional DIY letter package, Ombudsman DIY letter package, Collection Agency Dispute request letter, or any of our current DIY packages at no additional cost.
- Packages purchased Oct 2025 – Mar 1, 2026: Complimentary access to one Paid Guide, an Ombudsman DIY letter package, or a Congressional DIY letter package may be provided if your file has not been resolved or not returned to the SBA.
We apologize for any inconvenience and remain dedicated to seeking a clearer resolution as the situation evolves. — THE, SmallBiz Recon