Bank executives sought guidance on small business loan program from Ivanka Trump: report

Bank executives sought guidance on small business loan program from Ivanka Trump: report
© Greg Nash

Bank executives who were concerned about the $349 billion emergency small business program created in the $2.2 trillion coronavirus stimulus bill passed last week reached out to President TrumpDonald John TrumpNew Bob Woodward book will include details of 25 personal letters between Trump and Kim Jong Un On The Money: Pelosi, Mnuchin talk but make no progress on ending stalemate | Trump grabs 'third rail' of politics with payroll tax pause | Trump uses racist tropes to pitch fair housing repeal to 'suburban housewife' Biden commemorates anniversary of Charlottesville 'Unite the Right' rally: 'We are in a battle for the soul of our nation' MORE’s daughter and senior adviser Ivanka TrumpIvana (Ivanka) Marie TrumpTrump and allies grapple with how to target Harris Kanye West meets with Jared Kushner amid White House bid: report Trump donations to Harris attorney general campaign gain renewed attention after VP announcement MORE as they tried to negotiate higher interest rates, according to Bloomberg.

The calls came from multiple major bank executives, including from Bank of America Corp., who questioned the Paycheck Protection Program, which provides generous loans to small businesses with the caveat that they use at least 75 percent to pay their employees. 

As a result of those negotiations, Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: Pelosi, Mnuchin talk but make no progress on ending stalemate | Trump grabs 'third rail' of politics with payroll tax pause | Trump uses racist tropes to pitch fair housing repeal to 'suburban housewife' US Chamber asks Treasury to clear up 'serious concerns' about payroll tax deferral Pelosi, Mnuchin talk but make no progress on ending stalemate MORE and other administration officials requested to increase the interest rates on the forgivable, government-backed loans, and worked to encourage smaller banks to participate, as well.

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Mnuchin announced Thursday that the Treasury Department would cut interest rates in half in an effort to convince those smaller banks to participate and alleviate the load from major lenders. 

“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.”

The new program was off to a rough start this week as banks and other lenders said the $349 billion program lacks clear guidelines to handle a looming wave of loan applications that could overwhelm the system while leaving some firms in the lurch.