A proposed Small Business Administration direct loan program could discourage credit unions from participating in other SBA programs, B. Dan Berger, president of the National Association of Federally-Insured Credit Unions warned Thursday.
Fifteen Republican senators are urging Democratic leaders to drop a proposal to allow the Small Business Administration to make $4.5 billion in direct loans to businesses without using credit unions and banks.
Republicans and financial trade groups, including the National Association of Federally-Insured Credit Unions, are asking Congress to drop a Small Business Administration proposal to allow it to expand its direct lending programs.
A community banker, at a hearing before the House Small Business Committee on Wednesday, accused the Small Business Administration of attempting to coerce lenders in the Paycheck Protection Program into using an agency portal for loan forgiveness.
Many lenders in the Paycheck Protection Program are not using a Small Business Administration portal that allows borrowers of less than $150,000 to easily submit loan forgiveness applications, the Democratic staff of the House Small Business Committee said in a memo released Tuesday.
The Small Business Administration improperly blocked state-chartered, privately insured credit unions from participating in the Paycheck Protection Program, Credit Union National Association President/CEO Jim Nussle charged Wednesday.
The House Small Business Committee held a hearing on the Small Business Administration’s oversight of Paycheck Protection Program. The SBA is trying to mitigate fraud in the program.
The Small Business Administration’s Inspector General has issued a report finding that in the first batch of Paycheck Protection Program loans last year, 4,260 borrowers got two PPP loans when they only should have received one. The SBA intends to not forgive those duplicate loans, but to prevent duplication from happening again, the SBA has added controls that are causing delays and a logjam in loan processing this cycle, raising concerns that businesses will be caught without a loan when the program ends on March 31. The House has now passed legislation that would extend the PPP to the end of May.
Financial services trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, are concerned that the Paycheck Protection Program will expire on March 31 with thousands of loans stuck with “holds” that will prevent those small businesses from getting assistance. They want all loan applications received by the March 31 expiration date of the PPP to be processed.
The re-invigorated Paycheck Protection Program remains beset with problems that are keeping small businesses from obtaining much-needed assistance, trade groups representing credit unions and accountants said this week.