By Zachary Warmbrodt | Politico
Banks are warning that a $350 billion lending program for struggling small businesses won’t be ready when it launches Friday because the Trump administration has failed to provide them with the necessary guidelines and set requirements for the loans that are unworkable.
The lenders complain that Treasury Secretary Steven Mnuchin boxed them in with an unrealistic deadline and that the ground rules they’ve been given for the program, which is intended to deliver rapid aid to a huge number of ailing businesses, could delay the assistance for weeks or longer.
“It’s critical for both the borrowers and lenders to know the potential risks and liabilities involved in terms of loan qualification and compliance. For instance, can the borrower be subject to an audit after the loan disbursement and if so, what are the penalties? To what degree is the bank responsible for verifying borrower information, and then would it be held liable if things go wrong? It remains to be seen what the guidelines will say on these important issues. It’s also seems possible that lenders may choose to interpret the requirements differently creating further confusion on the roll out.” ~Shruti Gurudanti, Corporate Attorney at Rose Law Group
