Smaller banks seem a step closer to getting designated funds in the next phase of the Paycheck Protection Program.
Congress is negotiating a new round of stimulus that could add up to $310 billion to the program, said sources familiar with the discussions. Lawmakers are looking at setting aside $50 billion to $60 billion for banks and community development financial institutions with less than $50 billion in assets, said one of the sources, who asked not to be named.
Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, called on legislators last week to set aside a quarter of the program’s second round of funding for those lenders.
There are other efforts under way to curb how much individual lenders could originate during the PPP’s next round.
Sen. Marco Rubio, R-Fla., tweeted last weekend that he wants the Treasury Department, one of the program’s administrators, to limit the amount of Paycheck Protection loans a single lender makes to “no more than 5% of the new funds being approved.”
No lenders crossed that threshold in the first round.
JPMorgan Chase, the program’s biggest participant, had $14 billion in PPP loans approved, or about 4% of the total. Truist Financial said it had $10 billion in volume, or roughly 2.9%.
The program launched on April 3 with $349 billion in funding designed to help employees of small businesses harmed by the coronavirus outbreak. The Small Business Administration, which was running the program through its 7(a) platform, stopped taking applications 13 days later when it reached its authorization cap.
Paul Davis contributed to this article.