House Democrats call for more transparency in allocation of PPP funds
WASHINGTON — House Democrats are seeking details from the Trump administration and several large banks about the allocation of coronavirus relief funds as part of an investigation into whether large, well-funded companies were favored over small businesses and underserved communities.
In letters to the Small Business Administration and the Treasury Department, the lawmakers asked for all communications with certain large banks and industry associations regarding guidelines and procedures for loans issued through the Paycheck Protection Program. They also requested details on applications and recipients for PPP loans, including company names and addresses.
The letters were signed by Reps. Jim Clyburn of South Carolina, Maxine Waters of California, Carolyn Maloney and Nydia Velazquez of New York-N.Y., Bill Foster of Illinois, Jamie Raskin of Maryland and Andy Kim of New Jersey. The letters came in the wake of reports that some large lenders created a two-tiered system for applying for PPP funds that ensured that applications from their wealthiest clients were processed first.
The lawmakers urged officials to establish standards for lenders to elevate the needs of more disadvantaged borrowers.
“Given the significant remaining funds and the fact that many small businesses are still struggling to stay afloat, we request that you immediately issue guidance to lenders directing them to prioritize entities in underserved markets, including businesses owned by veterans, members of the military, socially and economically disadvantaged individuals, and women,” the lawmakers wrote to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza on Monday. “We also urge you to provide more transparency about the administration of this program so American taxpayers can understand whether federal funds are helping vulnerable businesses and saving jobs, or are being diverted due to waste, fraud, and abuse.”
The process of distributing funds should be more transparent, they said.
“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 separate letters to the CEOs of JPMorgan Chase, Bank of America, PNC Bank, Truist, Wells Fargo, U.S. Bank, Citibank and Santander, the lawmakers asked banks what steps they took to ensure PPP funds were directed toward underserved markets and what steps they took to ensure all PPP loan origination and account servicing activities adhered to fair lending laws.
They also asked the banks for details about how much of their profits and revenue are derived from the paycheck program.
Mnuchin, Carranza and the bank executives were asked to brief House staff on the issues addressed in the letters by June 29.