Gallego & House Dems Urge New PPP Rules Requiring Equitable Lending from Banks
PHOENIX, AZ – Rep. Ruben Gallego (D-AZ) joined Rep. Judy Chu (D-CA), chair of the House Small Business Subcommittee on Investigations; Oversight and Regulations Committee Chairwoman Nydia M. Velázquez, and Democratic Members of the House of Representatives in a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza urging new rules for the Paycheck Protection Program (PPP).
Congress established the PPP to help small businesses avoid staff reductions during the coronavirus crisis. However, SBA and Treasury expanded lending participation to all federally insured banks without including rules to prohibit exclusionary and inequitable practices. As large banks limited applications to high-value existing business customers, many small businesses were denied service by the largest lenders, and as a result, small banks and community lenders have been overwhelmed with applicants denied by other banks.
The letter, signed by 38 members, urges the SBA and Treasury to immediately issue new rules requiring PPP lenders to treat all applications equally and forbidding the imposition of any application restrictions not specified by Congress or the Administration.
"It's clear that underserved small businesses aren't getting a fair shake, and this needs to be remedied immediately," said Rep. Gallego. "Congress established the Paycheck Protection Program (PPP) to help keep employees paid – but the SBA and Treasury's system has left out too many of the small businesses that make up the backbone of our community and nation. Before Congress puts more money into this program, we need to make sure that money will go to the businesses that need it most and that banks aren't allowed to siphon those funds only to their biggest customers."
The full letter can be found here.