WASHINGTON–Treasury Secretary Steven Mnuchin said he has had discussions with congressional leaders about securing an additional $250 billion for the Paycheck Protection Program (PPP).
NAFCU has expressed support for the additional funding.
That program was originally funded with $349 billion and went live on April 3. It provides loans to companies of up to 500 employees to primarily cover payroll costs during the coronavirus pandemic; if borrowers follow the terms of the loans, which have a maximum of $10 million, the loans are forgiven.
The Small Business Administration, which is administering the PPP, has been swamped with applications, creating glitches, delays and other problems for both lenders and borrowers.
Senate Majority Leader Mitch McConnell (R-KY) issued a statement saying, “I will work with Secretary Mnuchin and Leader Schumer and hope to approve further funding for the Paycheck Protection Program by unanimous consent or voice vote during the next scheduled Senate session on Thursday.”
Some Democrats in the Senate have voiced concerns many underserved communities and other smaller borrowers will be disadvantaged by the PPP.
As CUToday.info reported here, the Fed has announced plans to establish a facility aimed at boosting lending to small businesses via the PPP.
Meanwhile, lenders continue to work through glitches in the PPP program. Reuters reported it spoke with three U.S. lenders who said they were unable to process loan applications for hours on Monday after the SBA’s online portal crashed around midday.
‘Do Not Close Any Loans!’
According to an email sent to financial institutions by the SBA, many lenders have had problems signing up for new user accounts with the SBA’s platform, while lenders that already had accounts have had issues unlocking them or resetting passwords, Reuters reported.
SBA further alerted lenders in the email that its technology platform’s loan authorization form was “not at all” compliant with the terms of the rescue program, Reuters added. “Please do not close any loans using the current version of the loan authorization!” the email stated.
The Trump Administration said the program is getting a large number of loans approved, saying on the fourth day of the program more than $35 billion in loans had been made, 100,000 small businesses had successfully applied and more than 2,000 lending institutions were up and running.
It was not known how much of that $35 billion was actually disbursed by financial institutions.
Support From NAFCU
In a statement, NAFCU CEO Dan Berger said, “We support the administration and Congress allocating additional funds to the SBA’s Payment Protection Program to provide additional assistance to small businesses and the American consumer. A key component of the economic recovery will be ensuring America’s small businesses can keep their doors open. We also urge policymakers to set aside a portion of any additional funds specifically for credit unions. They are heavily engaged in serving underserved communities, which have been hit the hardest during this economic downturn. Credit unions have a strong reputation for always putting their members first, and they are uniquely qualified to provide assistance during such economic uncertainty.”
‘Important Fixes’
Berger issued a separate statement related to discussion of a fourth stimulus package potentially being in the works in Congress, as CUToday.info reported here.
“With talks over a fourth coronavirus relief package heating up in Congress, NAFCU will aggressively advocate for important fixes to the SBA’s Paycheck Protection Program and additional relief measures to ensure credit unions can help their members overcome the financial challenges poses by this global crisis. Additionally, NAFCU will remain staunchly opposed to any and all efforts seeking to limit credit unions’ ability to help their members navigate these uncertain economic times.”
Berger sent a letter to congressional leadership outlining relief measures that the association is advocating to include any future coronavirus relief measures.