Top U.S. banks may shun small-business rescue plan on liability worries
Big banks in the U.S. may not be fully on board with the federal government’s rescue program for small businesses, citing concerns about financial and legal risk.
According to Reuters, large banks have reservations about participating in the Paycheck Protection Program, which includes $350 billion in loans for small businesses to cover the costs of salaries, bonuses, retirement benefits, parental leave and health care benefits.
On a conference call Wednesday the lenders voiced concerns about verifying borrower eligibility in an effort to prevent fraud. The banks expressed doubts that they could perform due diligence as they rushed to get loans approved.
Reuters could not verify which banks expressed reservations on the call or might boycott the program. The Bank Policy Institute, which hosted the call, includes member lenders such as JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co and Citigroup.