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Attorney General of Virginia

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Commonwealth of Virginia
Office of the Attorney General

Mark Herring
Attorney General

202 North Ninth Street
Richmond, Virginia 23219

 

For media inquiries only, contact:  
Charlotte Gomer, Press Secretary
Phone: (804)786-1022 
Mobile: (804) 512-2552
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

ATTORNEY GENERAL HERRING URGES CONGRESS TO STRENGTHEN PAYCHECK PROTECTION PROGRAM

~ Herring joins coalition of 24 state attorneys general in calling for more transparency, flexibility and equity in implementation ~

RICHMOND (May 6, 2020) – Attorney General Mark R. Herring today announced that he has joined 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, Attorney General Herring and his colleagues express concerns that the program, while helping some small businesses and their employees, suffered from 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 coalition argues that both the first and second rounds of funding with this program have left many small businesses across the country underserved by PPP. 
 

“The COVID-19 pandemic has left many small businesses in very difficult financial situations and they are now turning to federal programs like the Paycheck Protection Program to make ends meet,” said Attorney General Herring. “We need to make sure that federal funds are getting into the hands of the small businesses that are struggling right now and truly need it the most during these unprecedented times.” 
 
In their letter, Attorney General Herring and fellow attorney generals call on 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 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, and that funding should be fairly distributed across metropolitan areas, and that small banks and credit unions should be fairly represented as lending sources involved in the program. The coalition also calls for the SBA to 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. 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; and comprehensive data on the 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 calls for more longer time limits for businesses looking to rehire employees, around repayment and forgiveness requirements to businesses that allocate a smaller amount of revenue to salaries, and expanding qualifications for loan forgiveness. They also urge the Congress to provide the SBA with greater funding to improve technical support and mandate a uniform, user friendly process for use by lenders.

Joining Attorney General Herring in sending today’s letter are the attorneys general of California, Connecticut, Colorado, the District of Columbia, Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, Nevada, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington State and Wisconsin. 
  

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