The press release below is from Massachusetts Attorney General Maura Healey’s Office:
BOSTON, MA — Attorney General Maura Healey recently announced that she is leading a coalition of 24 state attorneys general in calling for key changes to the Paycheck Protection Program (PPP) to ensure that funds are distributed fairly and equitably.
In a letter to Congressional leadership, the coalition of attorneys general express concerns that the program, while helping some small businesses and their employees, suffered from a lack of transparency, technical savvy, and functionality that led to funds being distributed in a manner overly benefitting large, well-connected companies. As a result, the AGs argue that both the first and second rounds of funding with this program have left many small businesses across the country underserved by PPP.
“We’ve been listening to small businesses all across Massachusetts who have called our office with problems they’ve encountered in trying to secure loans from this program,” said AG Healey. “Congress must take action to ensure that this money gets in the hands of our most vulnerable businesses and hardest hit workers.”
AG Healey and the coalition of attorneys general are calling for Congress to adopt the following measures before they allocate additional PPP funding:
- Increasing Fair Access Funding for Small Businesses: The AGs call for Congress to require the Small Business Administration (SBA) to provide stronger, explicit guidance to lenders to ensure that funding goes to small businesses and not large, publicly-traded companies. Additionally, the coalition urges Congress to adopt rules that prohibit lenders from giving preference to certain categories of customers over others, such as existing, larger customers or customers whose current debts could create conflicts of interest for the lender.
- Ensuring Equitable Distribution: The coalition calls for a portion of any future funding for the program to be allocated exclusively for minority-owned small businesses, asks that funding be fairly distributed across metropolitan areas, and says that small banks and credit unions should be fairly represented to ensure a diversity of lending sources in the program. SBA should also create a simple and straightforward process for “unbanked” or “lesser-banked” small businesses or those that do not wish to apply through their current financial institution to receive funding.
- Better Communication and Transparency: The AGs urge Congress to direct the SBA to provide more direct guidance to businesses during the application process, including a portal that would allow small businesses to check the status of their loan approvals directly with the SBA. They also call for the SBA to be required to disclose more granular data on the percentage of loans in various size categories, the number and amount of loans processed by each lender, and the geographic distribution of all loans by metropolitan statistical area, borrower demographics, including gender, race, and ethnicity, as well as comprehensive data on businesses that receive funding.
- More Flexibility and Technical Support: The AGs believe that the program does not adequately serve small businesses and requires more flexibility. The coalition notes that some businesses may need longer time limits to rehire employees, raises concerns regarding the ability of restaurants and certain other types of small businesses that allocate a smaller amount of revenue to salaries to realistically use the PPP, and discusses the need for longer loan terms for some small businesses that do not qualify for loan forgiveness. They also urge Congress to provide the SBA with greater funding to improve technical support and mandate a more uniform and user-friendly process for the submission of applications.
Joining this Massachusetts led coalition are attorneys general from California, Connecticut, Colorado, the District of Columbia, Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Michigan, Minnesota, New Mexico, New York, Nevada, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington State, and Wisconsin.
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