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| Bankers Rebuke S.B.A. as Loan System Crashes in Flood of Applications | Bankers Rebuke S.B.A. as Loan System Crashes in Flood of Applications |
| (1 day later) | |
| Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients. | Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients. |
| Some bankers were so irritated that they vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.” | Some bankers were so irritated that they vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.” |
| Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go. | Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go. |
| But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers. A centerpiece of the government’s $2 trillion economic stimulus package, the program offers small companies — typically those with up to 500 workers — forgivable loans of up to $10 million. The S.B.A. is backing the loans, but customers must apply through financial institutions. | But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers. A centerpiece of the government’s $2 trillion economic stimulus package, the program offers small companies — typically those with up to 500 workers — forgivable loans of up to $10 million. The S.B.A. is backing the loans, but customers must apply through financial institutions. |
| When the aid program first went live on April 3, the Treasury Department’s goal was to quickly steer money to the neediest businesses — hair salons, coffee shops, dry cleaners and others. But many large banks needed more time to set up their systems and held off for days on taking applications, leading to an outcry from borrowers who could not afford to keep waiting. Many were also furious that hundreds of publicly traded companies, as well as wealthy clients of some big banks, got access to those funds. | When the aid program first went live on April 3, the Treasury Department’s goal was to quickly steer money to the neediest businesses — hair salons, coffee shops, dry cleaners and others. But many large banks needed more time to set up their systems and held off for days on taking applications, leading to an outcry from borrowers who could not afford to keep waiting. Many were also furious that hundreds of publicly traded companies, as well as wealthy clients of some big banks, got access to those funds. |
| Employees at TAB Bank in Ogden, Utah, spent last week pulling all-nighters to finish preparing loan applications from 1,100 customers. When the S.B.A. began accepting applications on Monday morning, they started trying to submit their files. But the S.B.A.’s computer system stalled, froze and crashed repeatedly. Five hours later, the bank had gotten only seven loans processed. | Employees at TAB Bank in Ogden, Utah, spent last week pulling all-nighters to finish preparing loan applications from 1,100 customers. When the S.B.A. began accepting applications on Monday morning, they started trying to submit their files. But the S.B.A.’s computer system stalled, froze and crashed repeatedly. Five hours later, the bank had gotten only seven loans processed. |
| “I’m beyond frustrated,” said Curt Queyrouze, the bank’s president, who also shared his experience on Twitter. “We wanted to update all of our customers this evening on the status of their applications, but right now, there’s not a lot of good news to give them.” | “I’m beyond frustrated,” said Curt Queyrouze, the bank’s president, who also shared his experience on Twitter. “We wanted to update all of our customers this evening on the status of their applications, but right now, there’s not a lot of good news to give them.” |
| After the money ran out in 13 days, Congress approved the additional funding for small businesses last week. It set aside $60 billion of that amount for loans through community development lenders, credit unions and other smaller lenders. But lenders warned that the new money would also vanish fast — adding to the desperation of small businesses, which often have thin margins and scant savings, and dialing up the pressure on their bankers. | After the money ran out in 13 days, Congress approved the additional funding for small businesses last week. It set aside $60 billion of that amount for loans through community development lenders, credit unions and other smaller lenders. But lenders warned that the new money would also vanish fast — adding to the desperation of small businesses, which often have thin margins and scant savings, and dialing up the pressure on their bankers. |
| On Monday morning, Richard Hunt, the chief executive of the Consumer Bankers Association, a trade group for banks, told CNBC: “We think every dollar is accounted for already.” | On Monday morning, Richard Hunt, the chief executive of the Consumer Bankers Association, a trade group for banks, told CNBC: “We think every dollar is accounted for already.” |
| The S.B.A. tried to brace for the onslaught. It warned lenders on Sunday that it would impose “pacing” limits and accept only 350 applications per hour from each lender — a move intended to reduce the technical strain on E-Tran, its electronic loan processing system, and make sure the available money was widely distributed. But bankers said they weren’t able to get anywhere near that volume through the system on Monday. | The S.B.A. tried to brace for the onslaught. It warned lenders on Sunday that it would impose “pacing” limits and accept only 350 applications per hour from each lender — a move intended to reduce the technical strain on E-Tran, its electronic loan processing system, and make sure the available money was widely distributed. But bankers said they weren’t able to get anywhere near that volume through the system on Monday. |
| Jill Castilla, the chief executive of Citizens Bank of Edmond, a small community lender in Oklahoma, had 200 applications ready to submit on Monday. After six hours of trying, she was able to get only three processed. | Jill Castilla, the chief executive of Citizens Bank of Edmond, a small community lender in Oklahoma, had 200 applications ready to submit on Monday. After six hours of trying, she was able to get only three processed. |
| “We serve truly tiny businesses, and many of them are in desperate circumstances,” Ms. Castilla said. “We know that each hour that goes by means there’s more money used up that won’t be available to be allocated for loans in our community.” | “We serve truly tiny businesses, and many of them are in desperate circumstances,” Ms. Castilla said. “We know that each hour that goes by means there’s more money used up that won’t be available to be allocated for loans in our community.” |
| On Twitter, Brad Bolton, the president and chief executive of Community Spirit Bank, a lender in Red Bay, Ala., summarized his experience with two pictures and a caption. The first photo was of the S.B.A.’s E-Tran portal, while the second showed an error message saying the site could not be reached; he captioned it “Hope and Despair in two pictures.” His tweet, directed at the S.B.A. and Treasury, also said: “Your failure to be ready is unacceptable.” | On Twitter, Brad Bolton, the president and chief executive of Community Spirit Bank, a lender in Red Bay, Ala., summarized his experience with two pictures and a caption. The first photo was of the S.B.A.’s E-Tran portal, while the second showed an error message saying the site could not be reached; he captioned it “Hope and Despair in two pictures.” His tweet, directed at the S.B.A. and Treasury, also said: “Your failure to be ready is unacceptable.” |
| The S.B.A. “had weeks to get this figured out, and here we are,” Mr. Bolton said in an interview. “It’s a disaster.” | The S.B.A. “had weeks to get this figured out, and here we are,” Mr. Bolton said in an interview. “It’s a disaster.” |
| In a message sent to lenders on Monday afternoon, the S.B.A. wrote that “unprecedented demand” was slowing the response time of E-Tran. The agency said it had twice as many people trying to access the system that day as it did during the first round of program lending. Despite the technical problems, the S.B.A. said it had processed more than 100,000 loans under the program on Monday from 4,000 lenders. | In a message sent to lenders on Monday afternoon, the S.B.A. wrote that “unprecedented demand” was slowing the response time of E-Tran. The agency said it had twice as many people trying to access the system that day as it did during the first round of program lending. Despite the technical problems, the S.B.A. said it had processed more than 100,000 loans under the program on Monday from 4,000 lenders. |
| Those statistics alarmed Mr. Bolton, who was not able to get a single loan through the system for a six-hour stretch on Monday. | Those statistics alarmed Mr. Bolton, who was not able to get a single loan through the system for a six-hour stretch on Monday. |
| “Who is getting their loans approved?” he said. “They’ve got to fix this, immediately, to give Main Street equitable access to this money.” | “Who is getting their loans approved?” he said. “They’ve got to fix this, immediately, to give Main Street equitable access to this money.” |
| Updated June 16, 2020 | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Just as happened the first time around — when bankers were given technical information by Treasury just hours before they were supposed to begin making loans — last-minute government guidance left banks scrambling. On Sunday, the S.B.A. said that it would allow big lenders — those with at least 15,000 applications — to send in one bulk-submission file each. On Monday, after complaints from smaller banks, it reduced the threshold to 5,000 applications. (The loans would still be allocated in order, with approvals limited to 350 per hour, per bank, the agency said.) | Just as happened the first time around — when bankers were given technical information by Treasury just hours before they were supposed to begin making loans — last-minute government guidance left banks scrambling. On Sunday, the S.B.A. said that it would allow big lenders — those with at least 15,000 applications — to send in one bulk-submission file each. On Monday, after complaints from smaller banks, it reduced the threshold to 5,000 applications. (The loans would still be allocated in order, with approvals limited to 350 per hour, per bank, the agency said.) |
| The S.B.A. and Treasury Department also said on Sunday that individual lenders would be able to parcel out no more than 10 percent of the program’s total funds (excluding the money set aside for community lenders). That capped the big banks’ total lending at $60 billion each covering both rounds. | The S.B.A. and Treasury Department also said on Sunday that individual lenders would be able to parcel out no more than 10 percent of the program’s total funds (excluding the money set aside for community lenders). That capped the big banks’ total lending at $60 billion each covering both rounds. |
| Applicants said that being stuck in limbo was maddening. | Applicants said that being stuck in limbo was maddening. |
| Janet Marinaccio, the chief executive of Meet Each Need With Dignity, a nonprofit that runs a food bank and other relief services in the San Fernando Valley in California, applied for a loan weeks ago through Citi to help keep her organization’s 30 workers employed. It was not approved before the money ran out. Ms. Marinaccio was told on Friday that Citi would submit her application first thing on Monday. But by late afternoon, she was still waiting for word on whether it had made it through. | Janet Marinaccio, the chief executive of Meet Each Need With Dignity, a nonprofit that runs a food bank and other relief services in the San Fernando Valley in California, applied for a loan weeks ago through Citi to help keep her organization’s 30 workers employed. It was not approved before the money ran out. Ms. Marinaccio was told on Friday that Citi would submit her application first thing on Monday. But by late afternoon, she was still waiting for word on whether it had made it through. |
| “We’re really hoping for a happy ending here,” she said. | “We’re really hoping for a happy ending here,” she said. |
| Drew Benson, a Citi spokesman, said the bank started submitting applications to the S.B.A. first thing Monday morning. | Drew Benson, a Citi spokesman, said the bank started submitting applications to the S.B.A. first thing Monday morning. |
| “Our objective is to secure funding for as many small business clients as possible and we are doing our absolute best to make it happen,” Mr. Benson said. | “Our objective is to secure funding for as many small business clients as possible and we are doing our absolute best to make it happen,” Mr. Benson said. |
| Bankers acknowledged that the S.B.A. faced a huge challenge. Last year, it processed loans totaling around $30 billion — less than 5 percent of the volume it was asked to handle for the paycheck program. But the lack of adequate planning for Monday’s onslaught still angered them. | Bankers acknowledged that the S.B.A. faced a huge challenge. Last year, it processed loans totaling around $30 billion — less than 5 percent of the volume it was asked to handle for the paycheck program. But the lack of adequate planning for Monday’s onslaught still angered them. |
| “This is one of the most inefficient days I’ve ever been a part of,” said Craig Street, the chief lending officer at United Midwest Savings Bank in Columbus, Ohio. “We have people sitting in front of computers inputting data over and over again only to be continually timed out of the system and have to start over.” | “This is one of the most inefficient days I’ve ever been a part of,” said Craig Street, the chief lending officer at United Midwest Savings Bank in Columbus, Ohio. “We have people sitting in front of computers inputting data over and over again only to be continually timed out of the system and have to start over.” |
| Alan Rappeport contributed reporting. | Alan Rappeport contributed reporting. |