In a blistering report, the Small Business Administration’s Inspector General said Tuesday that the agency’s COVID-19 Economic Injury Disaster Loan program is an open door for fraudsters seeking easy money.
The Small Business Administration late last week reaffirmed that borrowers have the responsibility to calculate loan forgiveness under the Paycheck Protection Program and that lenders are only responsible for making a “good faith review” of any documents a borrower submits.
The Small Business Administration’s Paycheck Protection Program has been rife with abuse and any automatic loan forgiveness program would exacerbate the situation, a government watchdog group warned Monday.
The Trump Administration’s poor oversight of the Paycheck Protection Program has placed billions of dollars at risk, left lenders confounded and invited fraud, the Government Accountability Office said Thursday.
The specific information that the Small Business Administration will disclose for the Paycheck Protection Program loans will not include the name of the lenders making the loan.
The Small Business Administration has told borrowers under its Paycheck Protection Program how to apply for loan forgiveness but has not yet told credit unions and banks how those applications should be handled—a problem that could be particularly thorny for credit unions.
The Small Business Administration has failed to issue guidance to lenders to help ensure that pandemic Paycheck Protection Program Loans reach the businesses that most need them, as required by federal law, the SBA’s Inspector General said in a report issued late Friday.
In addition, since the agency has failed to require the collection of demographic information about borrowers, officials cannot determine if the loans are reaching businesses that need the funds.
Four credit unions have joined marijuana advocates who are pushing Congress to make marijuana firms eligible for Small Business Administration coronavirus crisis loans.