Community bankers tell Mnuchin, Carrenza SBA computer systems not working
The International Community Bankers Association told Treasury Secretary Steve Mnuchin and Small Business Administration Administrator Jovita Carranza on Saturday that nearly 48 hours after the SBA’s Paycheck Protection Program to address the coronavirus economic crisis went live, “hundreds of lenders are still trying to get approval to access the SBA system so they can process loans.”
In the letter, ICBA President and CEO Rebeca Romero Rainey wrote Mnuchin and Carranza, “Please do everything in your power to support and enhance the overburdened Small Business Administration systems.”
“Both existing SBA lenders and non-SBA lenders are experiencing massive delays and inability to process loans or even access the SBA to become an SBA lender. We recognize that these systems were not created to handle the volume of applications they are seeing today, but we must work with the systems we have.
“Without a more robust intake process, American small businesses in many parts of the country will not receive and deploy the funds intended for them. Community bankers are frustrated with failed technology links and portals.”
Romero Rainey also said, “Funding of $349 billion is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly.”
“When the large banks all come fully online, these funds will be depleted rapidly, and thousands of cash-starved small businesses who believe they were promised access to credit will be frustrated and angry,” she said. “We urge an immediate request to Congress for additional funding and will work with you to secure it. Without adequate scale, the program cannot meet its potential.”
“Allocate at least 25% of existing $349 billion program funds and future funds for banks of $50 billion in asset size or less, consistent with their share of industry assets. Community banks serve markets not served by the large banks. To ensure program access to all communities and regions of the nation, we must not allow program funds to be used nearly exclusively by the largest banks.
Romero Rainey also cited an urgent need for liquidity.
“As quickly as is practical, I urge Treasury and the Federal Reserve to launch a secondary market facility to purchase program loans from originating institutions.”