Big banks temporarily close small business support portal, Treasury and SBA announce

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President Donald Trump, left, listens to Steven Mnuchin, United States Secretary of the Treasury, speaking during a press conference of the Coronavirus Task Force at the White House in Washington, D.C., Thursday, April 2, 2020.

Kevin Dietsch | UPI | Bloomberg via Getty Images

The Treasury and the Small Business Administration announced on Wednesday that they will temporarily close major banks to the electronic lending portal used to submit applications for the government’s small business assistance program.

This ruling applies to any lender with more than $ 1 billion in assets for an eight-hour period starting at 4 p.m. today, according to an email obtained by CNBC.

The agencies want to “guarantee access to the PPP loan program for smaller lenders,” the email said.

“SBA and the Treasury will assess the advisability of creating similar set-back times in the future,” the agencies said.

The paycheck protection program, a major component of the administration’s response to the coronavirus pandemic, is in its second round after its initial funding of $ 350 billion was quickly exhausted. The SBA’s E-Tran system, which is the online portal through which lenders enter request information to obtain a loan number before disbursing funds to the borrower, has faced problems in both funding cycles.

After the banks complained that E-Tran was unreliable and difficult to use, regulators said they would restrict access to it to help the overall operation of the program. The program has also been criticized as favoring larger bank customers, such as publicly traded companies and large restaurant chains, over mom and pop small businesses.

Now, US agencies seem to be experimenting with blocking time for small banks, blocking access to large lenders in an attempt to improve the chances that small customers can get their loans approved.

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