Treasury agrees to release names of most paycheck protection program borrowers
The Trump administration has said it will release the names of companies that have received a loan of $ 150,000 or more from the government’s small business bailout fund.
The movement comes in the middle critical that the $ 670 billion paycheck protection program has unfairly benefited big banks and corporations.
On Friday, Treasury Secretary Steven Mnuchin and Small Business Administration chief Jovita Carranza announced the names would be released following an agreement with Republican and Democratic lawmakers.
“I am pleased that we were able to reach a bipartite agreement on disclosure that will strike the appropriate balance between public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors and independent contractors. “Mr. Mnuchin said.
Ms. Carranza added: “We value transparency and our fiduciary responsibility to ensure that US taxpayer funds are used appropriately.”
Officials did not say when the list of companies would be made public. Mr. Mnuchin had already committed to audit all loans over $ 2 million.
The announcement follows strong criticism from several Democratic lawmakers who warned in a letter to Mr Mnuchin and Ms Carranza this week that the administration was not transparent about how much of the loans went to rural communities or poorly. served.
“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. spent “what if funds” help vulnerable people businesses and save jobs, or are diverted due to waste, fraud and abuse “.
Jim Clyburn, the Democratic chairman of the House select subcommittee on the coronavirus crisis on Friday said he was “happy” with the Treasury’s actions, but criticized it for not also disclosing the names of the companies that had received loans of less than $ 125,000.
“This is far from the total transparency that American taxpayers deserve. Even when this data is released, the Treasury and SBA will still retain the identities of nearly 4 million PPP recipients, or more than 85% of all recipients, who collectively received more than $ 100 billion in money from the public. taxpayers, ”Clyburn said.
A senior executive at one of the largest PPP lenders said there were “thousands” of people repaying loans or withdrawing applications due to updated loan recipient guidelines and monitoring. increased larger loans. Shake Shack and Ruth’s Chris Steakhouse publicly withdrawn the program after a public backlash; most of those who returned funds were “not names you would recognize,” the banker said.
Separately, Politico, the American media, this week find at least four congressional officials who own or have family ties with companies that have been approved for P3 loans, adding to the criticism of the program.
More than $ 512.2 billion has been loaned under the program. About a third of the funds were distributed by only 34 major banks, which have over $ 50 billion in assets, while about 19% were distributed by lenders with $ 10 billion to $ 50 billion in assets, and 44% were distributed by lenders with less than $ 10 billion dollars in assets.
Democrats have repeatedly expressed concern that there weren’t enough loans distributed by community development finance institutions – or private banks that focus on low-income businesses. The SBA even briefly limit access to the program to banks with less than $ 1 billion in assets in an effort to ensure that small lenders are not stranded as large banks submit tens of thousands of requests en masse.
JPMorgan Chase and Bank of America have provided $ 28.6 billion and $ 25 billion in loans, respectively, about double that of the program’s second-largest lender, PNC Bank.
In contrast, less than $ 3 billion was distributed to community development finance institutions in the second round of funding, which disbursed over $ 189 billion. The SBA had set aside $ 10 billion for this type of institution.
In total, the government distributed 4,800 loans worth over $ 5 million. But about two-thirds have taken the form of loans of $ 1 million or less.
Republicans are pushing for the PPP to be replenished this summer as part of a $ 2.2 billion Cares Law follow-up program.
Coronavirus Business Update
How is the coronavirus wreaking havoc on markets, businesses, our daily lives and our workplaces? Stay informed with our newsletter on the coronavirus.