WASHINGTON—The Trump Administration has indicated it is open to some sort of blanket forgiveness for all of the smaller loans made as part of the Paycheck Protection Program.
During a House Small Business Oversight Subcommittee hearing with Small Business Administration (SBA) Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin, the treasury secretary responded to a question from House Small Business Committee Ranking Member Steve Chabot (R-OH) by saying he would consider the blanket forgiveness, provided there are appropriate measures in place to still investigate fraud.
The credit union trade groups have expressed support for such forgiveness. NAFCU has argued the smaller loans are less likely to pose a high risk of fraud, and that the SBA and Treasury still have the ability to review applications that are forgiven.
Mnuchin also indicated his support for allowing businesses hardest hit by the pandemic to take out a second PPP loan, as well as a new round of loans for businesses that qualify with a revenue test.
Details to be Released
On the forgiveness process, Carranza told Rep. Tim Burchett (R-TN) that the agency will release additional details for lenders to submit borrowers' loan forgiveness applications by August.
During the hearing lawmakers also discussed the need to ensure small businesses in low-income and minority communities had access to funding. Mnuchin highlighted that community development financial institutions (CDFIs) are best situated to serve these areas, which is why they were given set asides in the second round of PPP funding.