House Democrats want to make sure the funds are being given to businesses in need
June 16, 2020
In letters to the CEOs of the nations largest banks, House Democrats asked for documents and internal communications pertaining to the disbursement of funds available through the Paycheck Protection Program.
House Majority Whip James Clyburn said the subcommittee on the coronavirus crisis is looking into whether the governments small business loan program has favored large, well-funded companies over struggling small businesses in underserved communities.
If that were to be the case, it would run contrary to Congress clear intent of the program, the lawmakers said. The letters were sent to the executives of JPMorgan Chase, Bank of America, Santander Bank, Wells Fargo, US Bancorp, Truist, Citibank, and PNC, as well as Treasury Secretary Steven Mnuchin, Small Business Administration (SBA) head Jovita Carranza.
Seeking answers
The PPP has drawn criticism for appearing to prioritize larger companies over those without preexisting relationships with big banks.
The lawmakers demanded all formal or informal guidance from the Treasury or SBA about PPP requirements and communication with the departments about the prioritization or exclusion of loan applicants in underserved or rural areas. Clyburn and other Democrats requested all internal communications and policies having to do with the PPP.
We are writing to seek documents and information and to urge the Treasury Department and Small Business Administration to take immediate steps to ensure that remaining PPP funds are allocated to businesses truly in need, and to increase transparency so taxpayers can see whether federal funds are being diverted due to waste, fraud, and abuse, wrote the subcommittee wrote.
The lawmakers said they have significant concerns that the system reportedly developed by some banks for wealthy clients may have diverted PPP funds intended for vulnerable small business owners in underserved and rural markets, including small businesses owned by veterans, members of the military, socially and economically disadvantaged individuals, women, and businesses in operation for under two years.
We urge you to take immediate steps to ensure that your bank prioritizes underserved communities when issuing PPP loans going forward, the letter said.
The PPP has so far supported 4.5 million loans, according to the latest figures. There is still around $130 billion in untapped funds.