Banks could end up holding many low-rate Paycheck Protection Program loans on their books for two years, and dealing with irate borrowers who failed to meet federal requirements for forgiveness.
Up to 12% of loans under the $660 billion small-business rescue program could be tied to misleading or completely phony applications, fueling concerns about lenders' potential liability.
Millions of Americans have yet to receive their stimulus checks, leading progressives to demand reforms improving underbanked consumers’ access to the financial system.
As special IG for the Treasury’s allocation of $500 billion in aid, Brian Miller could look into funding for Fed credit facilities. But Democrats on the Senate Banking Committee questioned his independence.
The Small Business Administration's last-minute plan to temporarily block larger banks from the relief loan program is another example of the agency changing the rules midstream, critics said.
As banks accept new applications for the paycheck program, they are dogged by complaints that they prioritized wealthy borrowers. But lenders likely fast-tracked clients they knew best under difficult circumstances, observers say.
Economists also expect the Fed's balance sheet to more than $10 trillion as policymakers look to lift the country from a recession brought on by the coronavirus pandemic.
Financial institutions could testify before the bipartisan commission overseeing the unprecedented economic aid for industries hit by the COVID-19 pandemic. But without subpoena authority, the panel’s impact may be limited.
The program, created in response to the 2008 financial crisis, generated $19 billion in small-business loans. It could be used as a viable path out of the coronavirus pandemic.
