🚨Banks are warning that a $350 billion small business lending program won't work as advertised when it launches Friday. They say the Trump administration set unrealistic expectations and has failed to give banks what they need to issue the loans politico.com/news/2020/04/0…
Banks are expecting millions of applications from small businesses on Friday. Some fear a disaster that could dwarf the failed kickoff of the Obamacare enrollment web site in 2013.
Banks see a likely scenario where the small business lending program at launch only works well for their existing customers while other potential borrowers miss out on the $350 billion.
In a letter to Treasury and the SBA, the Independent Community Bankers of America said the 0.5 percent interest rate mandated by the administration for the small biz loans was so low that for many banks "it will not be economic or feasible to participate in the program."
"[M]any banks have already indicated that they will not be able to use the program under the current terms," @romerorainey told Treasury and SBA yesterday. "Others will only use it for current customers, greatly limiting the purpose and potential of the program."
Banks told Treasury Tuesday that verification requirements for the loans could lead to substantial delays -- weeks or more as they establish the necessary procedures. If you want rapid deployment, they said, make it automated and don't require banks to verify borrower info
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