By and large, the Trump administration's response to the widespread shutdowns caused by the coronavirus has been to try and provide money directly to the citizens of the United States. Unfortunately, one process meant to help deliver that money has reportedly been hampered by one of the biggest banks taking part in a new program. Some Bank of America customers are claiming their attempts to secure Paycheck Protection Plan loans (PPP loans) are being thwarted because they hadn't previously gotten a credit card through the same bank.
The PPP loans program went into effect on Friday morning, with Treasury Secretary Steve Mnuchin touting its launch on Twitter.
"Congratulations to SBAgov and USTreasury teams!! I just got first report on #PPPloan The system is up and running. Community banks have already processed over 700 loans processed for $2,500,000. Great work!!"
The new PPP loans program is part of the CARES Act that was passed by Congress last week. While the most heavily reported aspect of the law was the sending of stimulus checks directly to people in the next few weeks, there were components aimed at small business owners as well. The new program is meant to give small business owners access to federal government-backed loans that will allow them to continue paying employees during the coronavirus-caused shutdown. In essence, the small businesses would be paying people not to work, in hopes that they won't have to lay them off. The end goal is to allow these businesses to get up and running quickly whenever the shutdown ends.
The problem, as one leading small business owner explained on social media, is that the rules governing acceptance of PPP loan applications aren't uniform. Melissa Peri, the CEO of ProdUX Labs, posted on Twitter that her application was rejected by Bank of America. In the post, she included a photo of the rejection notice laying out the reasons for the rejection. Peri believes the reason she was rejected is that she doesn't have a business credit card through Bank of America, as she qualifies for the other stipulations.Other social media users have reported the same notice when they've applied for their own PPP loans.
Ari Levy of CNBC reports that the issues aren't just with Bank of America. Several institutions have claimed the rules regarding the government-backed loans are confusing. Another big bank, JPMorgan Chase, told customers in an email that it would not be able to accept applications through the program on Friday, the very day Mnuchin was touting its success.