WASHINGTON— The Paycheck Protection Program (PPP) likely has had "billions of dollars in PPP loans that may have been diverted due to fraud, waste, and abuse,” according to the House Select Subcommittee on the Coronavirus Pandemic, which has released a preliminary analysis.
Administered by the Small Business Administration, the PPP was created by the CARES Act and launched with $349 billion in funding April 3. As CUToday.info has reported, after depleting initial funding less than two weeks after applications opened, Congress provided another $320 billion for the program, with several set asides for smaller lenders such as credit unions and Community Development Financial institutions.
The program's authorization expired Aug. 8 with roughly $134 billion in funds still remaining. Congress is currently considering ways to continue and improve the program, including by allowing certain borrowers to take out a second PPP loan and simplifying the forgiveness process, which could be included in a Phase IV coronavirus relief package.
Recommendations Made
In addition to citing issues with data and companies that received loans, NAFCU noted the subcommittee's report also recommended that the SBA and Treasury:
- Improve internal controls for loan forgiveness
- Improve the audit plan for PPP borrowers
- Cooperate with oversight from Congress, inspectors general, and other watchdogs
Subcommittee Chairman Jim Clyburn (D-SC) sent a letter to the inspectors general of the SBA and Treasury calling for a review of the agencies' management of the PPP as a result of the report.