Treasury blames lenders for PPP disclosure debacle
The U.S. Treasury Department is pointing the finger at lenders for errors discovered in Monday's PPP data disclosure.
What they're saying: "Companies listed had their PPP applications entered into SBA’s Electronic Transmission (ETran) system by an approved PPP lender. If a lender did not cancel the loan in the ETran system, the loan is listed," a senior administration official said.
This explanation makes the most sense for phantom loans like the one listed for e-scooter company Bird, given that the SBA shouldn't otherwise have its financial information.
What we still don't know, however, is how many errors were made. I'm now hearing more talk of audits, although it remains unclear exactly what form they would take.
There also was a ton of reporting yesterday about PPP loans received by companies with ties to people like Donald Trump, Jared Kushner, Nancy Pelosi, and Joe Biden.
- Such disclosure carries not just the intrinsic value of transparency for taxpayers, and also serve as receipts if politicians later criticize PPP or claim to have not really supported it.
- But, but, but: There isn't anything wrong with any of these connections, so long as the loan recipient was truthful in the application. PPP was primarily designed to keep people on payroll, whether a small-town bartender or a front-desk worker at a Trump-branded hotel. It was an intentionally blunt instrument that didn't discriminate by the wealth or connections of someone's employer.
What's next: Soon we could get a better picture about how many payrolls were actually protected, as loan forgiveness applications are submitted and processed.
- Treasury provided an estimate of 51 million jobs, but that's already coming under scrutiny (and not just because of phantom loans).