by Todd DeFeo
U.S. Sen. Sherrod Brown (D-OH) joined two other Democrats in calling for an investigation into reports some Paycheck Protection Program (PPP) lenders are prioritizing “larger and wealthier clients.”
In a letter to Small Business Administration (SBA) Inspector General Mike Ware, the senators allege some lenders “have prioritized the applications of their larger and wealthier clients to the detriment of smaller [businesses] adversely impacted by the coronavirus pandemic.”
Senate Minority Leader Chuck Schumer (D-NY) and Senator Ben Cardin (D-MD) joined Brown, the ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, in sending the letter.
The senators allege “some private and commercial banking customers received special treatment from their banks when applying for [the] Paycheck Protection Program,” including “concierge” services. “At the same time, many retail customers, including smaller [businesses] that are at greater risk because of the pandemic, have struggled to receive timely assistance from their banks to help complete their applications and receive these much-needed funds.”
I’m demanding they change course immediately so that small businesses and their workers can get the money they need from the institutions in their communities.
Read my letter 👇 pic.twitter.com/UGWkowxCe8
— Sherrod Brown (@SenSherrodBrown) April 27, 2020
The Payroll Protection Program, created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, authorized up to $349 billion in forgivable loans for small businesses, which they could use to pay employees during the COVID-19 crisis. The program ran out of money and drew criticism from some quarters after reports surfaced that publicly traded companies applied for help.
It “supported more than 1.66 million small businesses and protected over 30 million jobs for hardworking Americans,” SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin said in a joint statement.
Last week, Congress passed the Paycheck Protection Program and Health Care Enhancement Act, which sent an additional $310 billion to the program. In a statement in support of the additional funds on the floor of the U.S. House, U.S. Rep. Steve Chabot, R-Ohio, said, “small businesses are resilient.”
“Startups are pioneering new techniques to sanitize masks and surfaces,” Chabot said. “Neighborhood grocers are bravely staying open to provide necessary supplies for their communities. Small manufacturers are retooling to make personal protective equipment for frontline workers. These small businesses and entrepreneurs make the America we know and love.”
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Todd DeFeo is a contributor to The Center Square.