Dem Senators Block Republican PPP Expansion as They Push for CDFI Set-Aside
The Senate is scheduled to return Monday and until then, the two sides as well as House leaders are likely to try to cut a deal.
Senate Democrats on Thursday blocked Republican plans to provide an additional $250 billion in coronavirus stimulus funds, demanding that some $45 billion in funds be funneled through Community Development Financial Institutions and similar lenders.
Senate Majority Leader Mitch McConnell (R-Ky.) went to the Senate floor Thursday morning and asked for unanimous consent to pass legislation that would have provided an additional $250 billion for the Paycheck Protection Program.
That’s the program that provides financial institutions with federal funds to lend to small businesses to, in part, keep their workers on the payroll during the coronavirus crisis.
Democrats objected and then offered their own plan, which McConnell blocked.
The Democratic plan would have set aside $45 billion in additional PPP loan funds to CDFIs, minority depository institutions, certified development corporations, micro-lenders, and small banks and credit unions with less than $10 billion in assets.
The Democratic plan also would have provided $15 billion for lenders with less than $50 billion in assets.
The Senate is scheduled to return on Monday and until then, the two sides, as well as House leaders, are likely to try to cut a deal.
In a letter to Trump Administration officials, Senate Minority Leader Chuck Schumer (D-N.Y.) and several other Democrats said they are concerned that small businesses that do not have a traditional relationship with lenders cannot easily obtain PPP loans.
They said CDFIs, MDIs and mission-based non-profit lenders are “best positioned to bridge the trust gap between many underserved communities and the traditional financial sector.”
Sen. Jeff Merkley (D-Ore.) said he is concerned that some small businesses are being neglected.
“Banks have been prioritizing bigger, more lucrative customers for priority access to the program, which was not the intent of this program,” he said in a letter to administration officials.