Rep. Cisneros Calls for PPP Loan Disclosures as Mnuchin Finally Concedes Need For Transparency

FULLERTON, CA - Today, Representative Gilbert R. Cisneros, Jr. (CA-39) joined 35 of his House colleagues in a letter to Treasury Secretary Steven Mnuchin and Administrator of the Small Business Administration (SBA) Jovita Carranza urging the immediate disclosure of information about Paycheck Protection Program (PPP) loans distributed to businesses with multiple employees and to require the collection of demographic data in all new PPP loan applications and PPP loan forgiveness applications. To view the full letter, click here.

“When PPP first rolled out, many small businesses in the 39th District and across the country were unable to access a loan. It’s troubling to read reports that banks were prioritizing applications from large corporations,” said Rep. Cisneros. “This is exactly why we need immediate disclosure and transparency of PPP. The American people deserve to know where taxpayer-funded coronavirus aid is going and that small business loans are going to who they’re meant for—small businesses.” 

Last week, Secretary Mnuchin announced that the Trump administration would not release the names of the businesses and details of the loans disbursed through PPP, despite ongoing bipartisan and bicameral efforts to provide greater transparency into the program. Mnuchin reversed course on Monday, tweeting an acknowledgement of the need for transparency and oversight.

The letter requests that information about PPP loans be disclosed in as similar a format as possible to existing disclosures of SBA 7(a) loans, the program on which PPP is based. The SBA has previously released detailed information on 7(a) loans dating back to 1991, including borrower and bank information, date of loan approval and loan amount, and status of the loan. Additionally, the PPP loan application informs borrowers that their information is subject to automatic disclosure under the Freedom of Information Act, and therefore businesses owners would not face any unexpected or undue burdens in this disclosure process.

The letter calls for the disclosure of all PPP loans distributed to businesses with multiple employees, not just loans above a specific threshold. Disclosing only loans above $2 million for example, as stipulated in the TRUTH Act, captures just 0.6% of loans and 21% of total PPP funds.

The letter also calls for the immediate collection of demographic data through all new PPP loan applications and applications for PPP loan forgiveness. This information is critical to aiding congressional oversight of the program and ensuring that relief is getting to small businesses in need, particularly those in rural and economically disadvantaged markets and those owned by minorities, women, and veterans.

Since the PPP program began in April, reports have exposed cases of certain businesses receiving preferential treatment from banks and bigger businesses obtaining streamlined access to loans. 

A recent study from the National Bureau of Economic Research shows an alarming and disproportionate impact of the COVID-19 crisis on minority-owned businesses -- with the amount of Black business owners dropping by 41% and Latinx business owners dropping by 32%, compared to a 22% decrease in all active small business owners across the country. Despite this, a vast majority of minority- and women-owned small businesses may be shut out of PPP loans and only a fraction of minority-owned businesses who applied have received the full funding requested.