Donald Trump vows business rescue despite bank backlash
President Donald Trump pledged to kick off a $350 billion small business loan program Friday despite widespread warnings from banks that they aren't ready to deliver the desperately needed aid as advertised.
Even as lenders such as JPMorgan Chase said they most likely wouldn't be prepared to offer the governmentbacked loans, Trump said at the daily coronavirus press briefing that the so-called Paycheck Protection Program "is launching tomorrow."
The administration announced it was streamlining borrower verification requirements for the banks and adjusting the terms of the loans to make them more palatable, but it was unclear if the last-minute changes night would be enough to avert a chaotic rollout.
"You've made clear to us we now need to execute,"
Treasury Secretary Steven Mnuchin said beside Trump at the briefing. "We need to get money to small business and American workers, and that's what we're doing."
The mass confusion over the program cast a dark cloud over the $2 trillion economic rescue package that Congress passed last week to try to slow mass layoffs, which have already cost millions of American jobs. Rather than delivering aid quickly to Americans in the face of a rapidly spreading pandemic, the plan appeared to be mired in bureaucratic uncertainty.
The Paycheck Protection Program was designed to offer government-backed loans to small businesses with the promise of having the loan be forgiven if a borrower keeps employees on its payroll. The need for that incentive was made starkly clear when it was revealed that a record-breaking 6.6 million workers filed unemployment claims last week.
Major U.S. banks were unsure if they would be able to start offering the loans Friday, even as the industry expected millions of applications from struggling small businesses. Banks complained that the Treasury Department and Small Business Administration have supplied incomplete guidelines and imposed onerous loanverification requirements, among other issues.
Some lenders were planning to plow ahead, as they put their faith in Treasury and SBA officials to eventually figure out how to manage the critical economic rescue effort. Banks questioned whether the systems used to execute the government-backed loans would even withstand the stress of a surge of new borrowers.
Tioga State Bank President and CEO Robert Fisher said it was "definitely a trust exercise."