Democrats urge paycheck scheme coverage for community, minority lenders

(Reuters) – Top Democrats have urged the U.S. Treasury Department and the Small Business Administration (SBA) to expand opportunities for community development financial institutions (CDFIs) and minority depository institutions (MDIs) in the Paycheck Protection Program funding.

The call from the Democratic Party leaders, highlighted in a publicly released letter to the Treasury and SBA late on Sunday, asked for setting aside at least $10 billion in the next 48 hours for MDIs and CDFIs to make PPP loans amid the coronavirus outbreak.

“SBA and Treasury should use their administrative authority to create a special set-aside of at least $10 billion of PPP funds solely dedicated for MDIs and CDFIs,” the Democrats said in the letter.

It was written by, among others, House of Representatives Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer and U.S. Representative Maxine Waters, who chairs the House Financial Services Committee.

The letter also asked for greater transparency on the part of the processing of funds.

“The Administration’s process for requesting funds and making changes is backwards”, the lawmakers wrote. “Treasury and the Office of Management and Budget (OMB) do not seem to be coordinating with SBA”.

The U.S. government notified lenders on Sunday that it will cap how much each bank can lend under the emergency loan program designed to keep workers on payrolls amid the coronavirus pandemic, hours ahead of the reopening of the lending program.

The shuttering of the U.S. economy due to the coronavirus pandemic will likely push the national unemployment rate to 16% or higher this month, President Donald Trump’s adviser, Kevin Hassett, said earlier on Sunday.