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- Saturday, Apr. 4, 2020
Bank of America Changes Policy After Customer Pushback On Its Initial Handling of Payroll Protection Program Applications
Small business owners who have a business deposit relationship with Bank of America can now apply for a Paycheck Protection Program through the bank. This was after their applications were initially rejected on Friday (4/3), day one of the coronavirus relief program. At that time, BofA stated that application processing priority was being given to those who have credit lines or business loans with the bank; in other words, those that owe money to BofA were being put first in line, some conclude so that they could make good on their debt to the bank. This was interpreted by a number of customers as serving the bank’s interest through federal money that’s been earmarked to help qualifying small businesses across the board.
Pushback on that policy was strong as rejected BofA applicants, many of them long-time customers, took to social media. BofA’s denial of those applicants even elicited criticism from Florida Sen. Marco Rubio who pointed out that it wasn’t a federal government requirement that customers have loans in order to be approved for the Paycheck Protection Program, part of the $2 trillion relief package (the Coronavirus Aid, Relief and Economic Security Act, aka CARES Act) recently signed into federal law.
Now that these customers are having their applications processed after first being rejected, their prime concern is whether the delay could cost them as a flood of applicants had already filed to stake their claims to tap into the government’s $350 billion small business relief program fund. BofA processed 80,000-plus applications in the first day.
The relief program could be key to the U.S. economy’s recovery. Small businesses employ nearly half of the workers in the private sector. By some estimates, as many as 20 million people could lose their jobs by the end of April.