House Democrats overseeing the coronavirus response are demanding details from eight big banks about the implementation of the Paycheck Protection Program of coronavirus relief loans to small businesses.
In letters to Bank of America, Citibank, JPMorgan Chase, PNC Bank, Santander, Truist Bank, U.S. Bank and Wells Fargo, House Majority Whip James Clyburn (D-SC) and six colleagues said the House Select Subcommittee on the Coronavirus Crisis “is investigating whether implementation of the Paycheck Protection Program (PPP) has favored large, well-funded companies over struggling small businesses in underserved communities—contrary to Congress’ clear intent.”
The Paycheck Protection Program has approved more than $512 billion in loans, but the program has also been plagued by reports that large companies with access to other funds received loans while some smaller businesses had difficulty in getting approved.
“We have significant concerns that the two-tiered system that some banks reportedly developed 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,” the Democrats wrote in their letters.
Treasury Secretary Steven Mnuchin also set off a storm of criticism last week when he reversed course on a pledge to provide “full transparency” regarding recipients of more than $500 billion in Paycheck Protection Program funds. Mnuchin told Congress last week that the names of loan recipients and amounts they received are “proprietary” and “confidential.”
Watchdog groups and lawmakers, including some Republicans, have objected to the administration’s refusal to disclose details of PPP loans. Clyburn and his colleagues on Monday also wrote to Mnuchin and Small Business Administration chief Jovita Carranza asking for their communication with the banks and financial industry associations as well as details, including names and loan amounts, for PPP borrowers and applicants.
“Contrary to Secretary Mnuchin’s recent testimony, there is nothing ‘proprietary’ or ‘confidential’ about a business receiving millions of dollars appropriated by Congress, and taxpayers deserve to know how their money is being spent,” the lawmakers wrote in their letter.
Mnuchin on Monday tweeted that he “will be having discussions with the Senate [Small Business Committee] and others on a bipartisan basis to strike the appropriate balance for proper oversight of #ppploans and appropriate protection of small business information."