Chase Customers Go After Bank For ‘Fyre Festival-Like’ SBA Paycheck Protection Program Rollout
As the U.S. economy reels from the impact of the COVID-19 coronavirus pandemic, small businesses have taken a major hit. So, the U.S. Treasury Department’s swift rollout of the Paycheck Protection Program (PPP) included in the historic $2 trillion stimulus bill should be good news, right? Wrong. Some have likened the program’s rollout to the fraudulent Fyre Festival, ThinkAdvisor reported.
According to a fact sheet from the U.S. Treasury, “The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.”
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It is a fulfillment of the department’s promise to help small businesses that have been adversely impacted by the crisis. However, for many small business owners, obtaining the funds hasn’t been that simple.
Big banks are at the center of the controversy as small business owners blast them for unnecessary roadblocks they are experiencing while trying to get loans.
Chase’s system returned a variety of errors for users attempting to apply, leaving business owners frustrated with the system. Some users even mentioned a potential Class Action lawsuit.
Bank Of America (BOfA) is also in the hot seat as it initially rejected applicants who didn’t have existing credit account (meaning those who owe them money).
Wells Fargo hadn’t even begun accepting applications until Monday and then said they’d reached their $10 billion limit.
Business owners blasted the banks for their inefficient handling of the PPP, with many saying the banks will be to blame if they lose their businesses and have to fire their employees.
Bill Sweet, chief financial officer (CFO) of Ritholtz Wealth Management, compared the SBA’s rollout of PPP to the fraudulent Fyre Festival, in which organizers for a widely publicized music event accepted people’s money, but never produced it, leading to several lawsuits.
“PPP roll-out is basically the small business Fyre Festival – BOA automatically rejecting applicants who don’t have an existing credit card, Chase website returning null data,” Sweet tweeted.
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Florida Sen. Marco Rubio blasted BofA for denying small businesses without existing lines of credit.
“@BankofAmerica got bailed out with $45 billion of your tax money But now just heard from #smallbusiness with a BOA account & a 400k line of credit they paid off BOA denied #PPP loan because they don’t have a credit account A ridiculous requirement that isn’t anywhere in law,” Rubio wrote.
While BofA loosened some PPP restrictions this week, PPP is still having major issues and small business owners are worried the program will run out of money before they can apply for loans.
In response to the unprecedented demand, lawmakers are attempting to make amends. On Tuesday, Rubio tweeted Congress is “already discussing how to add more funding.
His sentiment was underscored by a report from the Wall Street Journal (WSJ) that the U.S. Treasury Department is expected to request $200 billion more for the program.
Small business owners either aren’t buying it or said it is too little, too late.