US lawmakers, Bank of America urge small business agency to correct incorrect PPP credit data
WASHINGTON (Reuters) – Bank of America Inc (BAC.N), the second largest U.S. lender, has asked the Trump administration to correct data affecting public accountability of recipients of $ 520 billion in pandemic aid and a group from US Democratic lawmakers wrote to call for action before more funds are made available.
In a letter to the Small Business Administration (SBA) on Monday, the 30 legislators expressed a number of “serious concerns” about errors in the data for the Paycheck Protection Program (PPP) and called on the agency to “resolve these issues immediately” . to a copy of the letter viewed by Reuters.
Bank of America, which the SBA said was the top-volume PPP lender as of June 30, has asked the SBA to retrieve, sanitize, and reissue the data, according to the person with direct knowledge of the discussions. A spokesman for the bank, which processed 334,761 PPP loans through June, declined to comment.
The previously unreported inquiries are likely to put pressure on the SBA and the Treasury Department to explain how they compile credit data for the program designed to help companies keep workers with forgivable credit on their payroll.
Reuters and other news outlets have reported numerous red flags throughout the huge data set, suggesting that the number of jobs saved by PPP aid has been overstated.
According to President Donald Trump’s re-election campaign, the data showed that his administration saved 51 million jobs after the coronavirus pandemic crashed the economy.
The data was released on July 6, after initial government opposition, and was intended to show Americans who received cash – increasing transparency and allowing policymakers to gauge the program’s success.
“We have found that much of the data published is grossly inaccurate,” the legislature, which included the chairman of the House of Representatives’ small business committee, wrote in a letter to SBA administrator Jovita Carranza on Monday.
“The data on the number of jobs received per loan and the borrower’s congressional district have been shown to be largely inaccurate, casting shadows over the accuracy, quality and reliability of other loan data,” they wrote.
Legislators asked the SBA to address a number of issues – including how they came up with the number of “jobs retained” and whether the SBA made efforts to independently verify the data. Errors Reuters previously identified in the data included loans that lenders and borrowers indicate were neither requested nor approved; Loans that have been canceled; and incorrect loan amounts.
An SBA spokesman declined to comment, but Carranza said during a hearing earlier this month that she was ready to address mistakes.
The government’s advertised 51 million jobs are much higher than estimates by some independent observers.
Beth Ann Bovino, U.S. chief economist at S&P Global Ratings, told Reuters that she calculated that the 5.018 million PPP loans approved as of July 27 could have saved around 13.6 million jobs based on the average size of small businesses the SBA.
“While the first round of loans moved quickly to deal with the situation created by COVID-19, it failed to meet its geography, industries and size targets,” she said, adding that a second tranche of PPP funding ” began to make the necessary adjustments to improve. “
Democratic Representative Jason Crow, who spearheaded drafting the letter, told Reuters that he would seek a meeting with SBA staff to discuss the process and timeframe for cleaning up the data.
“Time is of the essence,” he added, noting that Congress intends to approve more PPP funding in the coming weeks.
Reporting by Michelle Price, Chris Prentice, and Koh Gui Qing; Additional coverage from Lawrence Delevingne and Pete Schroeder; Adaptation by Tom Lasseter and Leslie Adler