Bank of America Inc (BAC.N), the second-largest U.S. lender, has asked the Trump administration to correct data meant to offer public accountability on the recipients of $520 billion in pandemic aid, and a group of U.S. Democratic lawmakers has written to demand action before more funds are allocated.
The 30 lawmakers outlined a series of “grave concerns” about errors in the data for the Paycheck Protection Program (PPP) in a letter on Monday to the Small Business Administration (SBA), asking that the agency “rectify these issues promptly.”
Bank of America, which the SBA said was the largest PPP lender by volume as of June 30, has asked the SBA to pull the data, clean it up and re-issue it, according to the person with direct knowledge of the discussions. A spokesman for the bank, which processed 334,761 PPP loans through June, declined to comment.
The requests, not previously reported, will likely raise pressure on the SBA and the Treasury to explain how they put together lending data on the program, which was designed to help businesses keep workers on their payrolls with forgivable loans.
Numerous red flags throughout the massive data set that suggest the number of jobs salvaged by PPP aid has been overstated.
President Donald Trump’s re-election campaign has said the data shows that his administration protected 51 million jobs after the coronavirus pandemic ruptured the economy.
Released on July 6 after some initial resistance by the administration, the data was meant to let Americans see who got cash — boosting transparency and allowing policymakers to assess the program’s success.
“We have found much of the released data to be grossly incorrect,” the lawmakers, who included the chair of the House of Representatives Committee on Small Business, wrote in a letter sent to SBA administrator Jovita Carranza on Monday.
“Data covering the number of jobs retained per loan and the borrower’s congressional district has proved to be largely erroneous, casting shadows on the veracity, quality, and reliability of other loan data,” they wrote.
The lawmakers asked the SBA to address a series of items — including how it arrived at the “jobs retained” figure and whether the SBA made efforts to independently verify data.Errors previously identified by Reuters in the data included loans which lenders and borrowers say were neither sought nor approved; loans which had been canceled; and incorrect loan amounts.
A spokesman for the SBA declined to comment, but Carranza said during a hearing this month that she was willing to address errors.
The 51 million jobs figure touted by the administration is much larger than the estimates of some independent observers.
Beth Ann Bovino, U.S. chief economist at S&P Global Ratings, said she calculated that the 5.018 million PPP loans approved through July 27 could have saved around 13.6 million jobs, based on the SBA’s average size of small businesses.
“While the first round of loans moved quickly to address the situation created by COVID-19, it didn’t reach its objective, in terms of geography, industries served and size,” she said, adding that a second tranche of PPP funding “began to make necessary adjustments for improvement.”
Democratic Representative Jason Crow, who led the drafting of the letter, said that he was seeking a meeting with SBA staff to discuss their process and timeframe for cleaning up the data.
“Time is of the essence,” he added, noting that Congress was aiming to authorize more PPP funding in coming weeks.