Mnuchin touts loan fraud consequences

The US Treasury Secretary warned on Tuesday that large companies taking unfair advantage of a giant emergency lending program for small businesses devastated by coronavirus shutdowns will suffer “consequences.”

Steven Mnuchin, speaking at President Donald Trump’s daily press briefing on the pandemic, was reacting to recent revelations that big companies were vacuuming up funding meant to be a lifeline for momand-pop businesses and their workers.

For now, Mnuchin said, the administration was giving “the benefit of the doubt” to companies involved and putting up clear guidance under which the money would be allocated.

“To the extent these companies didn’t understand this and they repay the loans, that will be ok. If not, there will be potentially other consequences,” he said.

Mnuchin added that overall it was still the targeted businesses that benefited from the public windfall.

Upscale burger chain Shake Shack announced Sunday that it was returning the $10 million loaned to it under the plan.

In late March, with many shops and restaurants nationwide forced to shutter due to the pandemic, the government launched the Paycheck Protection Program (PPP) to provide $350 billion in what were essentially grants as long as businesses used the funds to pay their workers.

Banks were flooded with requests, and the money quickly ran out.

Mnuchin spoke as the US Senate on Tuesday approved a second tranche of $320 billion.

The plan will have to be submitted to a final vote in the House of Representatives later this week before being signed by Trump.