The Paycheck Protection Program continues to be plagued by a lack of transparency and unclear rules, Democrats and credit unions said this week.
The Senate Small Business Committee held a hearing on the implementation of the PPP program Wednesday. Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza said their agencies implemented the program with unprecedented speed and began distributing loans days after Congress created the program.
“In less than two months, the PPP is supporting the employment of approximately 50 million workers and more than 75 percent of the small business payroll in all 50 states,” Mnuchin told the committee. “This is an extraordinary achievement.”
While he applauded the fast rollout of the program, Senate Small Business Committee ranking Democrat Ben Cardin of Maryland said that the administration has not collected the demographic information Congress needs to judge whether loans are reaching businesses that truly need them..
“The administration must become more transparent,” Cardin said, citing a recent SBA Inspector General report that said it was impossible to determine if small businesses that needed the loans were receiving them.
The SBA has taken steps to address some problems with implementation of the PPP program, but credit unions still face uncertainties and unclear rules, Brad Thaler, NAFCU’s vice president of legislative affairs wrote in a letter to Cardin and Small Business Committee Chairman Marco Rubio (R-Fla.) this week.
For instance, Congress recently lowered the percentage of a loan that must be used for payroll purposes from 75% to 60% for the loan to be forgiven. Thaler said credit unions are not clear whether that provision applies to all loans whose forgiveness applications have not yet been approved or only loans approved after June 5, the date the change was approved.