Gregory W. Meeks, Bill Foster, Al Green, Emmanuel Cleaver: MDI/CDFI-fintech partnerships (April 22, 2020)

Summary

A letter dated April 22, 2020 from Members of Congress Gregory W. Meeks, Bill Foster, Al Green and Emmanuel Cleaver to chief executive officers including Jack Dorsey of Square, Daniel Schulman of PayPal, Sasan Goodarzi of Intuit and Robert Smith of Vista Equity Partners. The letter concerns the Paycheck Protection Program established under the CARES Act and states that minority depository institutions (MDIs) and community development financial institutions (CDFIs) typically lack the capital, personnel and experience to build technology platforms for PPP loans. It says partnerships between fintechs and MDIs or CDFIs could expand the reach of PPP funds to affected communities, and asks the recipients to respond about working with them on the second tranche.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                                          April 22, 2020

Mr. Jack Dorsey                                             Mr. Noah Breslow
Chief Executive Officer                                     Chief Executive Officer
Square                                                      On Deck

Mr. Daniel Schulman                                         Mr. Eyal Lifshitz
Chief Executive Officer                                     Chief Executive Officer
PayPal                                                      BlueVine

Mr. Blake Murray                                            Mr. Eyal Shinar
Chief Executive Officer                                     Chief Executive Officer
Divvy                                                       Fundbox

Mr. Rob Frohwein                                            Mr. Brock Blake
Chief Executive Officer                                     Chief Executive Officer
Kabbage                                                     Lendio

Mr. Jared Hecht                                             Mr. Sasan Goodarzi
Chief Executive Officer                                     Chief Executive Officer
Fundera                                                     Intuit

Mr. Robert Smith
Chief Executive Officer
Vista Equity Partners

We write to you regarding the Paycheck Protection Program (PPP) established by Congress as a
part of the Coronavirus Aid, Relief, and Economic Security (CARES Act). Because of the
necessary shutdowns occurring around the country, small businesses throughout our nation have
been shuttered and millions of Americans have lost their livelihoods.

The PPP serves the dual purpose of providing a necessary financial lifeline to small businesses
without the capital to weather this crisis while also incentivizing these small businesses to
maintain their payroll and preserve the jobs of their employees.

In practice, there have been difficulties disbursing the money efficiently. Because demand for the
program has been so great, both private sector financial institutions and the Small Business
Administration (SBA) suffered through technical problems and found themselves overwhelmed
by the sheer volume of applications. As a result, large banks around the country limited access to
PPP loans to existing customers.

For minority depository institutions (MDI) and community development financial institutions
(CDFI), the rapid rollout and extreme demand for these loans has been particularly burdensome.
MDIs and CDFIs are crucial cogs in our financial system because they help build wealth in low
and moderate income communities and communities of color, and are particularly adept at
reaching underserved customers in neighborhoods often ignored by larger financial institutions.
Because of their limited size, however, these banks typically lack the capital, personnel and the
experience required to speedily build or implement the requisite technology platforms required to
serve small business customers in need of a PPP loan, or other SBA programs.

Fintech companies, like those you run, specialize in building and scaling user-friendly
technology in an abbreviated period of time. A number of you have already built such platforms,
and others are in the process of doing so. Small businesses around the country are fighting to
survive, and I applaud you all for working to build tools that will help them do so.

Given your comparative advantage in building scalable technology and the strengths of MDIs
and CDFIs at reaching underserved communities and working with existing financial regulators,
I believe partnerships between fintechs and MDI/CDFIs could be beneficial for both parties, and
help expand the reach of financial services and government stimulus programs to those
communities most affected by the crisis, and in greatest need of financial support.

Though PPP funds have temporarily expired, more funds ae likely to be allocated this week. For
the second tranche of money, we hope to see a greater number of MDI/CDFI-fintech
partnerships and believe all institutions and small businesses would benefit from such an
arrangement.

Please respond to this letter detailing the possibility of working with MDIs and CDFIs to
expedite and streamline the PPP process for small business owners as well as on other ventures
in the future.

                             Sincerely,




                             Gregory W. Meeks
                             Member of Congress




Bill Foster                          Al Green                      Emmanuel Cleaver
Member of Congress                   Member of Congress            Member of Congress


File and source

File

meeks-foster-green-cleaver-letter-fintech-ceos-mdi-cdfi-ppp-2020-04-22.pdf

Size

185,566 bytes

SHA-256

73da129f9f5d56ff53599198cc139f2f163c49cd7355cbad6d601f9a7b324d28

Our copy

meeks-foster-green-cleaver-letter-fintech-ceos-mdi-cdfi-ppp-2020-04-22.pdf

Original

meeks.house.gov