Expressing concern about who received loans under the Paycheck Protection Program, Democrats on the Select Subcommittee on the Coronavirus Crisis are demanding that the Trump Administration and the nation’s largest banks provide the panel with specific details about lending under PPP.
The panel sent letters to the Treasury Department, the Small Business Administration and eight of the nation’s largest banks asking for lending data. The panel did not send any letters to credit unions requesting similar information.
The move comes as a pandemic oversight committee—led by the Justice Department’s Inspector General—reported that the administration has refused to give that committee any information as well.
The latest controversy began last week, when Treasury Secretary Steven Mnuchin told the Senate Small Business Committee that the administration regarded information about borrowers under the PPP to be proprietary information. Senators from both parties noted that policy conflicts with SBA policies governing other programs.
In a letter released Monday, Justice Department Inspector General Michael Horowitz, Acting Chair of the Pandemic Response Accountability Committee, told members of Congress that Treasury Department attorneys had said that his committee would not receive certain information about PPP loans.
In their letter to the administration and the banks, the congressional subcommittee Democrats said they are concerned that some banks gave preferential treatment to their richest clients. “The banks’ wealthiest clients had access to a personalized application process that ensured their applications were processed first,” they wrote. They added that during the early days of the program, Treasury and SBA failed to give proper guidance to lenders about placing a priority on the neediest businesses—an omission that also was noted by the SBA’s Inspector General.
“We also urge you to provide more transparency about the administration of this program so American taxpayers can understand whether federal funds are helping vulnerable businesses and saving jobs, or are being diverted due to waste, fraud, and abuse,” the subcommittee Democrats wrote.
On Monday, Mnuchin said on Twitter that he will be having discussions with the Senate Small Business Committee and others “to strike the appropriate balance for proper oversight [of PPP loans] and appropriate protection of small business information.”
Separately, Small Business Administration Administrator Jovita Carranza released a statement seeking to ensure that as this phase of PPP lending winds down that financial institutions place an emphasis on underserved and rural markets.