In a major policy reversal, the Trump Administration announced Thursday that it was setting aside $10 billion in the Paycheck Protection Program for loans made by Community Development Financial Institutions.
The House defeated legislation Thursday that would have made public the names of lenders making large loans in the Paycheck Protection Program. The bill did not receive the two-thirds needed to pass the measure using an expedited process.
The U.S. House of Representatives is expected to vote later this week on legislation that would disclose details– including the names of lenders– of all loans over $2 million made under the Paycheck Protection Program.
The House also is likely to consider a measure to give employers receiving those loans some additional flexibility in how to use them.
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.
Credit unions continue to express frustration with the Small Business Administration, contending that they are unsure about how to solve the serious problems they are facing in implementing the popular Paycheck Protection Program.
“Unfortunately, as was expected, the compressed timeframe in which the PPP was enacted and implemented resulted in many challenges for our member credit unions in making, processing, and disbursing loans,” Lance Noggle, CUNA’s senior director of advocacy and counsel said in a letter to SBA officials. “Questions and concerns have morphed as the program is now almost 45 days old.”
Democrats are renewing their call for more rigid Paycheck Protection Program set-asides for credit union and community banks, following reports from a government watchdog contending that program funds may not be reaching the neediest businesses.
“Not only did [the Small Business Administration] fail to issue guidance to prioritize the paycheck loan applications of underserved and rural small businesses, the agency implemented a ‘first-come, first-served’ policy that made it harder for vulnerable small businesses to access PPP,” Senate Small Business Committee ranking Democrat Ben Cardin (D-Md.) said, following the release of a report by the Small Business Administration’s Inspector General.
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.
House Financial Services Chairwoman Maxine Waters (D-Calif.) is firing back at lawmakers who have called for allowing installment and payday lenders to be eligible for Paycheck Protection Loans, contending that such companies engage in predatory lending practices.
Four credit unions have joined marijuana advocates who are pushing Congress to make marijuana firms eligible for Small Business Administration coronavirus crisis loans.