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 TrumpMajority of Americans in new poll say it would be bad for the country if Trump ran in 2024 ,800 bottle of whiskey given to Pompeo by Japan is missing Liz Cheney says her father is 'deeply troubled' about the state of the Republican Party MORE’s daughter and senior adviser Ivanka TrumpIvanka TrumpKushner launching investment firm in move away from politics: report Washington Post calls on Democrats to subpoena Kushner, Ivanka Trump, Meadows for testimony on Jan. 6 Jill Biden takes starring role at difficult Olympics 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 MnuchinThe Hill's Morning Report - Presented by Goldman Sachs - Biden rallies Senate Dems behind mammoth spending plan Mnuchin dodges CNBC questions on whether Trump lying over election Democrats justified in filibustering GOP, says Schumer 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.