Trump administration designates $10B of PPP funds for community lenders

Trump administration designates $10B of PPP funds for community lenders
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The Small Business Administration (SBA) and Treasury Department announced Thursday that $10 billion of “round two” funding for the Paycheck Protection Program (PPP) is being set aside for financial institutions focused on lending to low-income communities.

The announcement of dedicated funds to be lent to small businesses by community development financial institutions (CDFIs) comes after lawmakers urged the Trump administration to make such a set-aside.

The set-aside includes $3.2 billion in PPP loans that CDFIs have already approved from the second round of funds that Congress provided to the program in April. Treasury and the SBA said that designating an additional $6.8 billion for CDFIs will help ensure that small businesses in all communities get the capital they need to retain their workers.

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“The forgivable loan program, PPP, is dedicated to providing emergency capital to sustain our nation’s small businesses, the drivers of our economy, and retain their employees,” SBA Administrator Jovita Carranza said in a news release. “CDFIs provide critically important capital and technical assistance to small businesses from rural, minority and other underserved communities, especially during this economically challenging time.”

Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: Supreme Court upholds NY prosecutors' access to Trump's tax returns, rebuffs Congress | Trump complains of 'political prosecution' | Biden rebukes Trump, rolls out jobs plan Mnuchin: Next stimulus bill must cap jobless benefits at 100 percent of previous income Why Trump can't make up his mind on China MORE said that the administration has “received bipartisan support for dedicating these funds for CDFIs to ensure that traditionally underserved communities have every opportunity to emerge from the pandemic stronger than before.”

Under the PPP, small businesses can receive loans that are forgiven if they use most of the funds to maintain payrolls. 

Congress provided an initial $349 billion for the program in legislation that President TrumpDonald John TrumpDavis: Supreme Court decision is bad news for Trump, good news for Vance Meadows trying to root out suspected White House leakers by feeding them info: Axios Pressley hits DeVos over reopening schools: 'I wouldn't trust you to care for a house plant let alone my child' MORE signed in late March. After that money was exhausted, Congress passed legislation in April that provided a second round of $310 billion for the program.

In total, CDFIs have approved more than $7 billion in PPP loans as of May 23, Treasury and the SBA said.

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A group of key congressional Democrats, including House Speaker Nancy PelosiNancy PelosiBattle over reopening schools heats up Pelosi: Trump wearing a mask is 'an admission' that it can stop spread of coronavirus Sunday shows - Spotlight shifts to reopening schools MORE (D-Calif.) and Senate Minority Leader Charles SchumerChuck SchumerDemocrats blast Trump for commuting Roger Stone: 'The most corrupt president in history' A renewed emphasis on research and development funding is needed from the government Data shows seven Senate Democrats have majority non-white staffs MORE (D-N.Y.), wrote a letter to Mnuchin and Carranza in April asking that at least $10 billion be set aside for CDFIs and minority depository institutions. 

Lawmakers on Thursday praised the announcement of the set-aside for CDFIs.

“I want to thank Secretary Mnuchin for heeding our calls to set aside a pool of funding specifically designated for lending by CDFIs, and now we’re urging him to move on and include Minority Depository Institutions as well since they, too, are critical to expanding access to communities of color,” Schumer said in a statement.

Senate Small Business and Entrepreneurship Committee Chairman Marco RubioMarco Antonio RubioGOP chairman vows to protect whistleblowers following Vindman retirement over 'bullying' Lincoln Project offers list of GOP senators who 'protect' Trump in new ad GOP Miami mayor does not commit to voting for Trump MORE (R-Fla.) said in a tweet that “CDFIs play a critical role in providing under-served communities access to #PPPloans” and that he is “glad the administration continues to support these critical institutions.”