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THE BIG DEAL– Trump officials struggle to get coronavirus-relief loans out the door: 

The Trump administration is struggling to work out the kinks of a coronavirus small business loan program after a chaotic start on Friday. 

  • Some banks say they are unable to access Small Business Administration (SBA) platforms, while industry leaders say there are unanswered questions about applying for loans and how to take advantage of them.
  • On Monday, the SBA loan processing platform crashed and was down for hours, preventing lenders from processing any loans, Bloomberg News reported. The system was back up on Monday afternoon.
  • Restaurants and startups are among those who have had trouble navigating the program.

The Hill’s Alex Gangitano tells us more about the snags here.

 

Ambitious start: The Treasury Department and SBA last week rolled out applications for the $349 billion Paycheck Protection Program (PPP), designed to provide loans for small businesses to meet payroll and other basic expenses during the coronavirus pandemic.

  • Bank and credit union employees are vetting, approving and processing the applications, which totaled 78,000 loans for $22 billion as of Sunday morning.
  • But the financial industry warned that it had been given late and unclear guidance from the government on how to sort through and process thousands of applications.

To help keep the system running smoothly, the Federal Reserve announced Monday it will purchase PPP loans from banks and lenders, freeing up cash to issue new loans under the SBA program and through conventional lines of credit.

 

There could also be broader concerns among banks that could complicate the success of the program.

Former Federal Reserve Chair Janet YellenJanet Louise YellenOn The Money: Democrats eye infrastructure in next coronavirus package | Mnuchin touts online system to speed up relief checks | Stocks jump despite more stay-at-home orders Janet Yellen: Coronavirus downturn is ‘different than any we’ve ever experienced’ On The Money: Stocks plummet into correction over fears of coronavirus spreading | GOP resistance to Fed pick Shelton eases | Sanders offers bill to limit tax breaks for retiring executives MORE told House Democrats on a Monday conference call that banks are worried about being held accountable for abuses of the program while facing pressure from the administration to get money out quickly, according to a person on the call.

Yellen added that Congress could act to give banks legal cover if they were deceived by a PPP loan applicant who committed fraud.

Democratic Massachusetts Sens. Elizabeth WarrenElizabeth WarrenMomentum grows to change medical supply chain from China Why Gretchen Whitmer’s stock is rising with Team Biden Democrats seize on Trump’s firing of intelligence community watchdog MORE and Ed MarkeyEdward (Ed) John MarkeyOvernight Health Care: CDC recommends face coverings in public | Resistance to social distancing sparks new worries | Controversy over change of national stockpile definition | McConnell signals fourth coronavirus bill Democratic senators want probe into change of national stockpile description Overnight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal MORE are also pressing the administration to clarify the rules and regulations lenders should follow when furnishing the loans.

“We urge you to move quickly to issue additional guidelines and clarifications to ensure that loans are disbursed quickly, that all businesses can participate and that lenders give mom and pop businesses the same access to loans that they give their more sophisticated small business clients. All small businesses need to have equal access to this help,” wrote the senators.

 

LEADING THE DAY

Dow soars more than 1600 points on hopes of slowing coronavirus spread: Stocks closed with major gains Monday on hopes that the coronavirus pandemic would peak sooner in the U.S. than had been expected.

The Dow Jones Industrial Average closed with a gain of 1,627 points, soaring almost 7.7 percent Monday. The S&P 500 rose 7 percent and the Nasdaq composite gained 7.3 percent on the day.

A sharp rise in Dow futures trading Sunday paved the way to a 1,000-point rally in industrials when the market opened Monday, fueled largely by optimism from President TrumpDonald John TrumpCampaigns face attack ad dilemma amid coronavirus crisis Outgoing inspector general says Trump fired him for carrying out his ‘legal obligations’ Trump hits Illinois governor after criticism: ‘I hear him complaining all the time’ MORE and potentially encouraging data from New York.

 

Kudlow says administration ‘looking at’ offering coronavirus bonds: The White House is considering offering a coronavirus-related Treasury bond equivalent to a war bond to spur investment in the economy, National Economic Council Director Larry KudlowLawrence (Larry) Alan KudlowMORE said Monday.

“We’ve kicked this around before. [Treasury Secretary Steven MnuchinSteven Terner MnuchinTens of thousands of travelers from China arrived in US as administration debated restrictions: report Pelosi, McConnell clash over next coronavirus bill Trump eyes additional funds for small businesses impacted by pandemic MORE] and I and the president and others talked about selling long-term paper,” Kudlow told reporters at the White House.

Asked if a coronavirus bond was a serious proposal, Kudlow cautioned that the administration was “just looking at it” and hoped to first see the effects of the recently passed $2.2 trillion economic relief package.

The concept of a coronavirus bond was raised in a separate CNBC interview by Jim Cramer. Kudlow called it “a great idea.”

 

GOOD TO KNOW





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