House Democrats Charge Administration Ignored Directions to Help Businesses in Underserved Areas

The Trump Administration ignored congressional guidance to place a high priority on helping small businesses in underserved areas weather the pandemic—one of myriad failures in the administration’s response to the coronavirus crisis, House Democrats charged Friday.

Democrats on the House Select Subcommittee on the Coronavirus Crisis issued a scathing report Friday, charging that the administration failed to adequately assist Americans as the virus spread.

“The Select Subcommittee’s findings demonstrate that the Trump Administration’s response to the coronavirus pandemic is among the worst failures of leadership in American history,” the subcommittee charged.

In releasing the report, Subcommittee Chairman James Clyburn (D-S.C.) said, “The work of the Select Subcommittee has identified numerous ways in which the pandemic and its impacts could be combated more effectively, efficiently, and equitably—but the Administration has refused to do what is necessary to control the virus and mitigate its economic damage.”

The subcommittee repeated its allegations that the Treasury Department and the Small Business Administration ignored congressional guidance and instead allowed large banks help their best customers in programs such as the Paycheck Protection Program.

The subcommittee said that if the PPP is extended in the future, Treasury and the SBA should issue clear guidance to ensure lenders place a high priority on serving underserved markets. In addition, the departments should invest in Community Development Financial Institutions to help them handle the demand for loan applications. The departments also should include a demographic questionnaire on any future PPP application.

The Trump Administration has been criticized for not including such a questionnaire on the loan application.

The subcommittee also said that the Federal Housing Finance Agency has done a poor job of ensuring that homeowners are aware that they could be eligible for loan forbearance. In the report, the subcommittee said that FHFA data showed that more than 31,000 people who were more than 60 days delinquent on their mortgage in August had not received forbearance.

“FHFA must take stronger action to address deficiencies in the forbearance programs of Fannie Mae and Freddie Mac,” the subcommittee said. “Homeowners in financial distress who have not received forbearance or other relief could face foreclosure on January 1, 2021, immediately after the foreclosure moratorium expires.”

The subcommittee said that the FHFA should make forbearance automatic for qualified homeowners.

House Republican Whip and subcommittee ranking Republican Steve Scalise of Louisiana dismissed the subcommittee’s findings. “Contrary to the Democrats’ baseless claims, the facts clearly show that President Trump’s leadership during this unprecedented pandemic has our country on a path to a full recovery,” he said.

Related:

Select Subcommittee on the Coronavirus Crisis, Interim Staff Report

IG Report: FHFA Not Ensuring that Mortgage Servicers Tell Borrowers About Forbearance

Spread the word. Share this post!