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Community Bankers Struggle To Process PPP Loans

Treasury Secretary Steven Mnuchin on Friday tweeted that more than $875 million in Paycheck Protection Program loans had already been processed.
(AP photo/Alex Brandon)
Treasury Secretary Steven Mnuchin on Friday tweeted that more than $875 million in Paycheck Protection Program loans had already been processed.

The federal Paycheck Protection Program, or PPP, is part of a $2.2 trillion economic relief package passed by Congress. It authorizes loans to help businesses struggling to pay employees amid a steep economic downturn due to COVID-19. But sources say some community bankers struggled to access the system to process these loans, leaving them trailing behind larger financial institutions. Journal Record editor Russell Ray discusses what went wrong -- and some good news out of Tulsa. 

 

Full transcript: 

 

Drew Hutchinson: This is the Business Intelligence Report, a weekly conversation about business news in Oklahoma. I’m Drew Hutchinson. Joining me by phone again this week is Russell Ray, editor of The Journal Record. Like many people, we’re both working from home. So Russell, how is everything going? 

Russell Ray: We’re all doing good here at The Journal Record. We’re out there telling stories, and we’re staying safe.

Hutchinson: Glad to hear it. This week, we’re talking about community bankers’ troubles with the Payroll Protection Program, or the PPP. This federal program is part of the $2.2 trillion relief bill passed by Congress, and it authorizes up to $349 billion in loans to small businesses to pay their employees in the wake of the COVID-19 pandemic, which has caused a steep national economic downturn and has left record numbers of people unemployed. 

Ray: Well that’s right. The Small Business Administration and the U.S. Treasury were tasked with getting a system up and running to accept these applications for Payroll Protection Program loans by April 3. The SBA released guidelines for these loans just hours before the program went live on the following Friday morning. But on that Friday, several small to medium sized banks known as community banks were not able to access the system in order to begin processing those loans.

Hutchinson: Obviously, this was quickly implemented and issues probably shouldn’t have come as a major surprise. But do we know exactly what went wrong? 

Ray: Well we were told the big banks were given the knowledge and infrastructure to process these loans well ahead of community banks. U.S. Rep. Tom Cole said the process was not fully streamlined at the time. Adrian Beverage of the Oklahoma Bankers Association said the program was rolled out so quickly and was overwhelmed with lenders wanting to get on the system to process these loans. But it’s important to note that these issues have since been resolved, and the process is working more smoothly today.

 

Hutchinson: Right. Adrian Beverage’s organization, the Oklahoma Bankers Association, or the OBA, is currently serving as a sounding board for the community banks and working with the Oklahoma delegation to see that everyone has adequate information about the program and how to access this money. Beverage says that right now, banks may be able to access the system, but the process is much slower than anyone might like it to be. He urged everyone to stay patient and know that community bankers are working hard on behalf of their clients. Aside from accessing the system, some business owners said they experienced delays in applying for the loans authorized by the PPP because they didn’t know what documentation they needed to have on hand when applying. That information is from Jeff Seymour, who is the executive vice president of economic development for the Greater Oklahoma City Chamber. 

Ray: Well yes. Seymour said there are a lot of moving parts here. He said If you have an existing lending relationship, make sure to contact your financial institution and talk to them about any programs that can benefit your business. 

Hutchinson: So it sounds like, according to officials, staying in contact with local banks is imperative for business owners during this time. 

Ray: Well that’s right. Beverage said if you don’t have an existing relationship with a community bank, find one and reach out to them. They will help you walk through the process and make sure you have everything you need when you submit this application. The best advice is to talk to your banker and ask them to walk you through this process.

 

Hutchinson: Ending on a bit of good news, Tulsa-based Stride Bank reported that it was able to secure 136 business loans by last Monday afternoon, even though staff had to work through the weekend to make that happen. Nonetheless, these provided more than $34 million in funds to local businesses. This saved an estimated 4,000 jobs. 

 

Ray: That’s right. And in more good news, some members of Congress are wanting to add another $250 billion to the paycheck program. U.S. Sen. Mitch McConnell wants to add oil and gas companies to the list of eligible businesses. One official at Stride Bank in Tulsa said funds are limited. He said the bank wanted to make sure that its customers got every penny they needed to keep their staff employed through this very, very challenging time.

 

Hutchinson: Russell, thank you for your time today. 

Hutchinson: Russell Ray is editor of The Journal Record. KGOU and The Journal Record collaborate each week on the Business Intelligence Report. You can follow us both on social media. We're on Facebook, Instagram and Twitter: @journalrecord and @KGOUnews. The story we discussed today is available on JournalRecord.com. And this conversation, along with previous episodes of the Business Intelligence Report, are available on our website, KGOU.org. While you’re there, you can check out other features and podcasts produced by KGOU and our StateImpact reporters. For KGOU and the Business Intelligence Report, I'm Drew Hutchinson.

 

The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.

As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

The Journal Record is a multi-faceted media company specializing in business, legislative and legal news. Print and online content is available via subscription.

Music provided by Midday Static

 

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