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Bank executives concerned about the Trump administration’s rollout of a $349 billion emergency small business lending program personally appealed to Ivanka Trump this week as they sought additional guidance and higher interest rates.
The direct calls to the president’s daughter and adviser — from officials at institutions that included smaller, regional banks as well asBank of America Corp. — underscored the efforts within the financial sector and among President Donald Trump’s aides to properly implement the Paycheck Protection Program, a centerpiece of the $2.2 trillion stimulus program signed into law last week.
The younger Trump was working to make the program appealing enough that community banks would participate in it, contending that for it be to successful, small businesses needed to make their applications through the regional banks with whom they already had banking relationships.
The outreach was described by three people familiar with the calls who requested anonymity to discuss private communications.
The lobbying campaign appeared to be at least partially effective. Ivanka Trump relayed to Treasury Secretary Steven Mnuchin and other administration officials requests to increase the interest rates on the forgivable, government-backed loans, and to make a greater effort to encourage community and regional banks to participate.
On Thursday, Mnuchin announced that the government would increase interest rates to 1% from 0.5% on the emergency loans, providing a greater financial incentive for smaller community banks that had complained they wouldn’t otherwise be able to compete with larger institutions that can raise money more cheaply. The move came on top of processing fees on the loans that the federal government was already absorbing.
“I’ve told these bankers they should take all their traders and put them in the branches. There’ll never be another opportunity to earn five points on a 90-day fully government-guaranteed loan,” Mnuchin said on Thursday. “To make this attractive for community banks, we’ve agreed to raise the interest rate.”
And Trump himself singled out institutions that had appealed to his daughter in a tweet thanking them on behalf of small businesses.
Still, the effort by some banks to influence policy by appealing directly to the first family is likely to raise new questions about how equipped the administration is to facilitate the massive loan endeavor.
Problems with the program — which offers up to $10 million in loans to companies employing fewer than 500 people who maintain their workforce levels and meet certain other requirements — were apparent during its rollout on Friday. Major banks, includingWells Fargo, were not yet accepting applications, and the nation’s credit unions said they were still seeking additional guidance. Some small business owners reported error messages as they tried to apply for the loans online.
White House officials acknowledged there were still kinks in the system, but they also praised the round-the-clock efforts by Mnuchin and SBA Administrator Jovita Carranza to set it up.
There had been 6,820 loans valued at $2.2 billion, Carranza tweeted at about 3 p.m. New York time.
Paycheck Protection Program
“I do not see any barriers or roadblocks,” Trump economic adviser Larry Kudlow said Friday in an interview with Bloomberg Television. “They are ready.”
In addition to her conversations with bank leaders, Ivanka Trump has also tasked aides in her office to work with the SBA to work on its flood of coronavirus-related requests.
And her husband, Jared Kushner — who holds a role as a senior adviser in the White House — has also been working to address the coronavirus crisis through conversations with private industry representatives and family friends.
That included an effort by Kurt Kloss, an emergency room doctor and the father of Kushner’s supermodel sister-in-law, to crowdsource suggestions from colleagues to pass along to governors, as well as a bid to solicit tech companies and retailers to create a national website to direct Americans with symptoms of the coronavirus to drive-through testing centers. Weeks after that initiative was announced, only a handful of such sites have opened at retail locations, and the website remains limited in scope.
Amid reports that he was directing a so-called shadow task force that was complicating the chain of command, Kushner defended his efforts at a press briefing on Thursday.
“I can assure you that I’m speaking with Dr. Birx, Dr. Fauci, the vice president, and the president multiple times a day to make sure that I’m accomplishing and focusing on the objectives that the vice president deems a priority,” Kushner said, referring to the top public health experts on Trump’s team, Deborah Birx and Anthony Fauci.
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