As business owners shut their doors, many are finding their insurance plans don't cover pandemics, leading to claims against business interruption policies. Now regulators and lawmakers are stepping in to help Americans get the cash they need to survive. Eric Dinallo, chair of the Insurance Regulatory Practice at Debevoise & Plimpton LLP, joins "Squawk Box" to discuss. Bank of America said that about half way through its first day administering a small business relief program, more than 58,000 customers applied for $6 billion in loans.
The bank was the first major lender to get its web portal for the Paycheck Protection Program up and running, and it was soon inundated with requests.
“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 Bank of America manager told staff in an email.
As of mid-afternoon Friday, among the largest U.S. lenders, only Bank of America and JPMorgan Chase were accepting applications for the program, which was supposed to go live shortly after midnight. JPMorgan’s site went live with a temporary version of its portal after 1 p.m. Further, Wells Fargo announced that it will be unable to accept applications on Friday.
The chaotic launch heightened fears among business owners that they could miss out on the historic program if lenders manage to disburse all $350 billion of the money. Treasury Secretary Steven Mnuchin has said he would request more money if that happened, but that would require Congressional approval.
The U.S. government has asked banks to help it dole out at least $350 billion in loans to small businesses, part of the $2 trillion coronavirus stimulus bill signed last week. But banks and industry groups have complained that they lacked the guidance to get online systems up and running until just hours before the deadline. That guidance was finally issued by Treasury around 7 p.m. Thursday, leaving banks scrambling to get their systems to accept loan applications.
“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, said late Thursday. He added that the organization’s members would “move heaven and earth to get a system in place and running to help America’s small businesses and the millions of men and women who work at them.
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