Treasury Update

Recent Treasury Disclaimer — The U.S. Department of the Treasury has released a statement regarding COVID EIDL debt returns. Here's what borrowers need to understand.

U.S. Treasury disclaimer regarding COVID EIDL debt return procedures

What This Means for Borrowers

When Treasury states it "cannot return" certain SBA debts, it is typically referring to the fact that Treasury does not independently decide to return debts on its own authority. The creditor agency — the SBA — retains authority over the underlying obligation and determines whether a debt should resume agency servicing.

Under Treasury Fiscal Service Cross-Servicing Procedures §5035.50 — "Return Transferred Debt," Fiscal Service may return a transferred debt to the creditor agency under several circumstances — including when the creditor agency requests that the debt be returned.

This section is provided for informational and educational purposes only and does not constitute legal advice. SmallBiz Recon™ is not a law firm and does not provide legal representation. Federal servicing procedures can evolve over time. Borrowers should consult qualified legal counsel regarding their specific circumstances.


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