In advance of an oversight hearing today, Democrats and Republicans on the House Select Subcommittee on the Coronavirus Crisis today released dueling reports assessing the Paycheck Protection Program. The Republican staff report called it a “resounding success,” while the Democratic staff report focused on risks of fraud and abuse in the program.
“Data show the PPP supported more than 51 million jobs across the country,” the GOP report said. In a very short period of time, the PPP funneled $117 billion in loans to “historically underutilized business,” or HUB, zones of economic distress, supporting 13 million jobs in those areas.
Assessing concerns raised by Democrats that some financial institutions prioritized existing customers in making PPP loans, the GOP report pointed to banks’ compliance with Bank Secrecy Act and know-your-customer requirements. “The evidence . . . confirmed that the banks were limited by the requirement to collect and verify BSA/AML information from any new customers,” the report said.
Meanwhile, the Democratic report identified what it called risks of waste, fraud and abuse in how the Small Business Administration managed the PPP. Examples it cited included $1 billion, or 0.2%, of PPP loans going to companies receiving multiple loans (which the report attributed to “a vulnerability in SBA’s loan processing system”); $96 million, or less than 0.02%, of PPP loans going to companies prohibited from doing business with the federal government; and $195 million, or less than 0.04%, of PPP loans going to government contractors with performance issues.