The one thing people don’t truly understand about the stimulus is our system is set up to backstop the big financial institutions, not 50 million individuals or small businesses.
So the Trump admin is literally figuring this out on the fly, as are the states as they are processing unemployment requests.
This is not Trump’s fault and thankfully the left has not tried to blame him for the few hiccups during the rollout.
But what is important is what the Trump admin is doing behind the scenes to bring the big banks to heel as they seem to be an impediment not a helpful partner in this effort.
Look, they got their money (twice counting the last bailout) and now Trump has made clear they better help us get ours.
From The Washington Post:
A high-level Small Business Administration official criticized several big banks over their reticence to get involved in a $349 billion federally subsidized small business lending program, in a recorded teleconference obtained by the Washington Post.
The comments from SBA Nevada district director Joseph Amato offer a rare candid glimpse behind the scenes at the frustrations federal officials face as they work with banks to quickly ramp up one of the most ambitious economic stimulus programs in American history. The webinar features Amato talking candidly about the $349 billion program on a Zoom teleconference that was recorded and provided to The Post…
…Amato also said there are challenges with implementing the SBA’s disaster loans program, noting the small government agency is struggling to deal with more than 3 million loan applications it received in a matter of days.
He chided the big banks for taking bailout money in 2008, only to abandon small businesses at a time when funding is desperately needed.
“Some of the big banks … and this is just editorial … that had no problem taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses,” Amato said.
He responded to widespread concerns that the largest U.S. banks are slow-walking their involvement in the Paycheck Protection Program, an important small businesses aid program. The SBA is trying to forge relationships with “non-bank lenders” because the major banks are limiting their involvement in the program, Amato said.
“We are trying to work quickly with national non-bank lenders and other sources that may make up the difference for the companies like, sadly, BofA, Wells Fargo and Chase that haven’t really stepped up to the plate to take on all the small businesses they can,” Amato said.
Addressing criticisms that the SBA did not release its regulatory documents quickly enough, Amato said: “So what they are saying is ‘I don’t give a…a hoot about the small businesses…what I care about is whether or not I have enough paperwork. It’s just crazy.”
The comments came in an informational webinar posted online April 6. The Zoom teleconference was recorded and posted online by Faith Jones, a lawyer and small business consultant.
…Bank of America… angered thousands of small business owners by initially only taking applications from customers it was already lending to.
Many other big banks have also limited applications to current business customers causing angst among some small business owners that the money in the emergency fund would be exhausted before they found a lender.
Other banks, including JPMorgan Chase, said they needed more time to understand the program’s rules, which were released just hours before the program launched last week.
Citigroup, another large U.S. bank, is still not taking applications.
“Citi is working with the Small Business Administration to provide relief to Small Business owners. While we are working as quickly as we can, we are not yet able to accept applications for the Paycheck Protection Program,” the bank said.
Wells Fargo never formally began taking applications, but by Monday morning, said so many people had expressed preliminary interest that it had already reached the $10 billion cap it had set for loans under the program.
The banking industry has complained that the program has been plagued by confusing rules and unanswered questions. Even after borrowers’ applications are approved, money can’t be dispersed until the SBA finalizes the language they must include in the promissory notes. The SBA’s online system for inputting the applications has also been slow, banking industry officials say.
In the webinar this week, Amato criticized the major banks for turning down long-time customers at their moment of need.
“I can’t tell you how many phone calls I have where a doctor will call me, or a business owner will call me, and say ‘I’ve been with such and such bank for 25, 30, 40 years….and they say they aren’t taking my [Paycheck Protection Program] application because they’re not involved in the program,” he said. “That should tell you a lot about what that bank really is focused on but that’s just my editorializing.”