Congressional leaders work to replenish the stimulus relief program after the bank's small business loans have completely exhausted their funding capacity. Consumer Bankers Association CEO & President Richard Hunt joins Yahoo Finance’s On The Move to discuss.
ADAM SHAPIRO: I want to bring into the discussion now the CEO of the Consumer Bankers Association. He's also the President. Richard Hunt is joining us.
And the headline today was expected, that we have run out of funds in the PPP, the Paycheck Protection Program. Are you hearing anything from Congress about getting the next $250 billion installment, Richard?
RICHARD HUNT: Well, Congress has to finish its job. It started this program to help out millions of small businesses. They allocated $350 billion. That's going to be one third short. We're going to need about a trillion dollars when it's all said and done.
This program is very popular with small business men and women across the country. We've already processed 1.6 million loans. And I can tell you, we have 1.6 million small businesses waiting in the queue to get funding. So I am hoping Mr. McConnell, Mr. Schumer, and Speaker Pelosi get together today, now, to expand the funding.
JULIE HYMAN: Richard, it's Julie here. There have been a lot of complaints about this program as it stands, even before it ran out of funding, right? We've been hearing a lot of anecdotes about people who can't apply at their bank unless they're a client of the bank, who aren't getting answers even when they get their application through, who can't get the application through, who are finding the requirements too onerous.
So it seems like it's not just about putting more money in it. It's about fixing it. How do we fix it?
And is it up to the banks to fix it? Is it up to Congress? Is it up to the SBA? Who needs to fix it?
RICHARD HUNT: Well, we certainly in the banking industry are working 24/7. We have several shifts going on, three eight-hour shifts, working day and night to get the system up and running correctly.
Here are the facts-- the SBA is not set up for an unprecedented crisis like we have. In an annual year, they have 58,000 loans they disperse. We just completed 1.6 million. This is an agency that usually distributes $20 billion. We're looking at $350 billion.
The volume is off the charts. We never anticipated this many people needing assistance. So I assure you, between the government, the banking industry, we're all working together to try and help the American small business men and women have a Band-Aid approach. We understand people are suffering. The banks, community banks, regional banks, large banks, even fintech companies, credit unions, and fintechs are all working together trying to help people out.
But the bottom line is the money is depleted. We need to have a new allocation of resources, so we can help the 1.6 million customers who are waiting in the queue today to try and get this assistance.
BRIAN CHEUNG: Hey Richard, it's Brian Cheung here. Great to see you. I want to ask you about the Fed's efforts. It actually just launched its liquidity facility to take on PPP loans from depository institutions today. And for those that are kind of wondering what that is, it means that they'll be able to take on those loans, because at the interest rate being as low as they are, a lot of banks are saying it's not really profitable for us to hold on to these.
Has that provided the liquidity for banks to be more adamant about going out there and underwriting these people? Because we know that the money is already drained, so the demand is there. But, I mean, has that really relieved the depository institutions to go out there and underwrite these emergency loans?
RICHARD HUNT: Sure, yes, it helps, especially for the smaller institutions who are not used to small business lending. Look, we have I think at the end of the day three million loans we're going to have to disperse. And there may be some liquidity situations for some banks. But surely that helps to have 100% guarantee from the federal government. There has to be a lot of underwriting still to be done for these loans, something called know your customer, where we have to make sure we dot the I's and cross the T's to get it done.
But look, the bottom line is this-- we need Congress to do its job. They started this program. They initiated it. And we're thankful for that.
But you can't leave the small business men and women hanging out in the wind there. We need to have funding ASAP to get this done. We should not have interruption in service. So we literally have people lined up in the queue ready to get this assistance. It's time for Congress to step up and get this done immediately.
ADAM SHAPIRO: Richard, I'm curious, because I've been talking to small business owners who already were approved for loans via their banks and through the program, but still haven't received their money. So what percentage of small businesses do you think have received their funds? And what percentage of, for instance, the waiters or the waitresses who this is designed to help protect have actually gotten some money?
RICHARD HUNT: Well, we believe there are tens of billions of dollars have already been distributed. I don't think half of those loans approved have been sent into the accounts of the small business person just yet. It is a complicated system. I wish it was easy. It's not.
There is a pipeline that we have to unplug to get money to the American small business men and women. But I think within a couple of days, I think those loans that have been approved will receive the assistance.
ADAM SHAPIRO: All right, Richard Hunt is the CEO and President of the Consumer Bankers Association. We wish you and your team the best.