Banks were supposed to start taking applications for the Paycheck Protection Program (PPP) on Friday (April 3), but among the bigger U.S. lenders, only Bank of America (BoA) and JPMorgan Chase were able to launch — and were swamped by applicants, according to a report by CNBC.
Over 85,000 people applied for $22.2 billion in loans at BoA, prompting the lender to limit applications to customers only. People took to Twitter to complain about how they were turned away from BoA and how other banks weren’t accepting applications yet. BoA was the first bank to go live with the program. JPMorgan Chase was up and running by 1 p.m.
“That is an astounding number of applications to take in such a short period of time and considering we just launched the site this morning at 8:45 a.m.,” a BoA manager told staff in an email on Friday.
BoA is now giving precedence to current digital customers who are active borrowers as of last month.
U.S. Treasury Secretary Steven Mnuchin had announced on Thursday (April 2) that the PPP would go live first thing Friday morning. He said on Twitter that more banks will be ready on Monday (April 6) and praised community banks for processing over $875 million in applications.
The Small Business Administration (SBA) and the U.S. Treasury are administering the $350 billion loan program but have asked banks to handle the applications and distribution. The PPP is part of a $2 trillion economic stimulus package that President Donald Trump signed on March 27 to help offset losses caused by the coronavirus pandemic.
Banks said they didn’t get guidance on setting up the program until 7 p.m. on Thursday (April 2), which gave them little time to be ready the next morning.
“Having just received guidance outlining how to implement a $349 billion program literally hours before it starts, we would ask for everyone to be patient,” Richard Hunt, head of the Consumer Bankers Association, told CNBC.