The SBA’s Paycheck Protection Program is nearly depleted, but there are ways small banks and fintechs, with help from Congress, can remedy the situation.
By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.
Many banks were hitting their limits for lending to small businesses devastated by the coronavirus outbreak. They say the Fed's decisions to help fund additional loans and relax capital requirements will resolve many of their problems.
Community advocates would like to see changes to the 1977 Community Reinvestment Act, but say regulators should suspend such efforts until the coronavirus pandemic has passed.
