New York attorney general asks major banks to clarify handling of small business loans

imageEconomy31 minutes ago (May 04, 2020 03:40PM ET)

(C) Reuters. FILE PHOTO: New York State Attorney General, Letitia James, announces a lawsuit by the state of New York against e-cigarette maker Juul Labs Inc in New York City

NEW YORK (Reuters) – New York’s Attorney General said on Monday she has asked 11 major U.S. banks to clarify how they had issued loans tied to the U.S government’s $660 billion program to rescue small businesses from the impact of the coronavirus pandemic.

Known as the Paycheck Protection Program, the plan was intended to help small firms weather the worst global economic crisis in decades but has been hobbled by missing paperwork, technology failure and a misdirection of funds to big corporations.

Attorney General Letitia James said she is seeking information on the practices, marketing and procedures that banks undertook when they issued those loans. Also of interest is whether some companies had used their lobbying power to influence the way banks had dispensed the loans, she said.

“We are concerned that women and minority groups did not have equal access to loans,” James said in an interview, adding that she worried a disproportionate amount of money had flowed to big companies.

A spokesman for James declined to name the 11 banks that had received a letter from the office, sent on April 29, but said they are “large” U.S. banks.

The United States has been hardest hit by the coronavirus, which causes a respiratory disease, having seen 67,821 deaths in the country, higher than any other nation in the world.

New York attorney general asks major banks to clarify handling of small business loans

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