PPP loan recipients want more flexibility
PPP loan recipients want more flexibility
The program requires forgivable loan recipients to spend the bulk of the loan on salary expenses and that their workforce in June be the same as February 15, 2020. But business owners said June was too early to rehire. . employees.
“When it was implemented, you know, eight weeks probably seemed like an eternity,” Jose Cil, general manager of Restaurant Brands International, owner of Burger King and other chains, told President Trump. “But today we are in the 10th week of the pandemic, and I think it will take some time.”
Cil and other executives have said they would like 24 weeks to use the money to rehire workers. Senator Marco Rubio (R-Fla.) Told the Post he was working on a bill to give businesses 16 weeks, but said he believed “some Democrats” would fill the bill with items “unrelated”.
The Office of the Comptroller of the Currency finalized its overhaul of the Community Reinvestment Act, the agency announced in a Press release. Joseph Otting, controller of the currency since November 2017, is expected to resign after completing the overhaul, which he considers his flagship achievement, according to the Wall Street Journal reported.
The Community Reinvestment Act, enacted in 1977, was intended to ensure that banks serve low-income communities and to encourage community lending.
As Next City reported, there has been widespread consensus in the banking industry and elsewhere that the CRA needed to be modernized, but small lenders and watch groups criticized the OCC’s proposal, saying the overhaul would reduce lending to the community overall. Even the banks, the WSJ reported, “were generally lukewarm” about the OCC’s plan.
Part of the lukewarm interest probably stems from the split between the three regulators that oversee the CRA. The OCC regulates about 70 percent of the lending activities covered by the ARC, but the FDIC and Federal Reserve oversee the banks which account for the rest. The FDIC and Federal Reserve did not agree to the new rules and will regulate banks under the old CRA rules. Some banks are regulated by more than one agency and are expected to comply with two sets of regulations.
Citigroup to buy PPP loans from minority-owned banks
Citigroup to buy $ 50 million in paycheck protection loans from minority-owned banks, a move to pump money into those banks’ reserves, American Banker reports.
The originating banks can keep the fees paid to them by the SBA and will continue to service the loans. One of the first banks to benefit from the program is Houston-based Unity National Bank, Black Enterprise reports.
“Unity was one of the first [minority-owned banks] to solidify the terms of this important initiative, as we have witnessed firsthand how this pandemic has been felt most acutely by small business owners in the communities where we operate. By removing these loans from our balance sheet, we are able to redeploy capital to further help our customers and support our local economy, ”Laurie Vignaud, CEO of Unity National Bank, said in a statement.
And by the way, the job market is still terrible
2.4 million more Americans applied for unemployment benefits last week, the ninth consecutive week that jobless claims have exceeded 1 million, CNN reports. A total of 38.6 million people, or around 23.7% of the working population, have applied for unemployment since mid-March.
There is a faint glimmer of hope in the crisis. In the first few weeks, economists estimated the millions of job seekers to be a vast underestimate of the number of people actually in need of unemployment benefits, as the sheer number of jobless people overwhelmed phone lines and crashed state benefit websites. The latest data “indicates that [although] there are still millions of people who have applied for unemployment benefits and are waiting for help, it is finally proven that aid is being delivered on a larger scale, ”said Andrew Stettner, senior researcher at the Century Foundation, a left-wing think tank. CNN. This implies – beyond the fact that aid finally seems to be being delivered to many people – that the bottleneck of benefit seekers seems to have lifted and that the reported figures are closer to the actual number of unemployed. .