Blue Dogs Call on Administration to Prioritize Community-Based Financial Institutions
WASHINGTON – The Blue Dog Coalition urged the Trump administration Tuesday to fix problems community-based financial institutions are encountering as they try to access the Paycheck Protection Program.
In a letter to Treasury Secretary Steven Mnuchin and Jovita Carranza, administrator of the Small Business Administration, the coalition asked that community banks, credit unions and community development financial institutions be provided with clear and concise instructions on how to access SBA loan programs.
The letter goes on to ask Mnuchin and Carranza to ensure that these local entities have equal opportunity to issue PPP loans; and direct the Federal Reserve to provide advances against these loans.
Reps. Abigail Spanberger, of Virginia, and Xochitl Torres Small, of New Mexico, co-chairs of the Blue Dog Task Force on Rural Opportunity, said they were inspired to write the letter after financial institutions expressed concern that they were getting shut out of the program altogether.
“These community-based financial institutions have not only faced confusion on loan and participation requirements, but many were not able to access the E-Tran and Lender Gateway Systems,” Spanberger and Torres Small write. “If these smaller institutions are not able to help their communities, we fear the PPP will fail to achieve the goal of keeping small businesses afloat, and instead, leave small businesses and farmers in rural and underserved communities without access to necessary capital to survive. This is everyone’s worst nightmare about the government—it doesn’t work when you need it the most.”
These institutions are integral to the livelihoods of neighborhoods and communities across the country, particularly in rural communities.
According to the Independent Community Bankers of America, community banks alone provide more than 60 percent of small business loans.
The representatives and Blue Dog colleagues insist the Small Business Administration do a better job explaining how to access SBA loan programs.
“This is especially necessary for new SBA lenders who have had trouble accessing the system to process the loans they already have available,” they wrote. “Due to technical difficulties and lack of clear instructions, small community-based lenders have been locked out of the PPP system altogether or find themselves spending precious time navigating the technological problems. SBA should provide a user manual for the PPP’s platform, and they should immediately fix the technical issues and invest in reliable technology going forward.”
“Many small businesses and farmers rely on these financial institutions for their banking needs, especially in rural and underserved areas,” the coalition continues. “Treasury and SBA should ensure PPP access for community banks, credit unions, and CDFIs, including by establishing a set-aside for institutions under $50 billion in assets, to enable all small businesses an opportunity to access this important program provided by Congress.”
In addition to Spanberger and Torres Small, the letter was signed by Reps. Stephanie Murphy, of Florida, Tom O’Halleran, of Arizona, Lou Correa, of California, Anthony Brindisi, of New York, and Kurt Schrader, of Oregon, all members of the coalition’s leadership.
Also signing the letter were Reps. Sanford Bishop, of Georgia, Jim Cooper, of Tennessee, Jim Costa, of California, Henry Cuellar, of Texas, Jared Golden, of Maine, Vicente Gonzalez, of Texas, Daniel Lipinski, of Illinois, Ben McAdams, of Utah, Brad Schneider, of Illinois, Mikie Sherrill, of New Jersey, and Max Rose, of New York.