FDATA asks Treasury/SBA to allow digital records for Paycheck Protection Program

FDATA asks Treasury/SBA to allow digital records for Paycheck Protection Program
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FDATA Asks Treasury/SBA to Allow Digital Records for Paycheck Protection Program

The Financial Data and Technology Association (FDATA) and its members are dedicated to ensuring Americans have access to the financial tools they need to navigate their everyday lives–and this crisis. To that end, yesterday FDATA sent this letter to the U.S. Department of the Treasury and the U.S. Small Business Administration requesting that borrowers and lenders be able to use digital financial records to qualify for the Paycheck Protection Program established by Congress as part of the third COVID19 stimulus package.

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FDATA's Letter Treasury/SBA To Allow Digital Records

April 1, 2020

The Honorable Steven T. Mnuchin


Department of the Treasury

1500 Pennsylvania Avenue, N.W.

Washington, D.C. 20220

The Honorable Jovita Carranza


Small Business Administration

409 3rd Street, S.W.

Washington, D.C. 20416

Dear Secretary Mnuchin and Administrator Carranza:

On behalf of the Financial Data and Technology Association of North America (“FDATA North America”), please accept our gratitude for the work you and your teams are doing to provide vital assistance to the United States’ small business community during the COVID-19 pandemic.

As you both are acutely aware, small businesses across the country are in dire need of immediate financial support at what would have been an unimaginable scale just several weeks ago. It is precisely for this reason that allowing borrowers and lenders to use digital financial records to qualify under the recently-enacted Paycheck Protection Program (“the Program”) will be critical.

The use of digital records under the Program will enable two essential functions:

  1. Streamlined application and approval processes, leading to faster disbursement of Program aid to small businesses, and, by extension, their employees, while quickly while ensuring borrowers meet the underwriting requirements provided under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “the Act”); and
  2. Simplified validation processes for expenses borrowers make during the covered period that qualify for loan forgiveness under the law.

FDATA North America is the leading trade association advocating for customerpermissioned, third-party access to financial data. Our members include financial technology (“fintech”) lenders, aggregation, and financial services firms, which collectively provide digitally-enabled financial products and services to approximately 100 million American consumer and small business customers.

We are concerned that the existing Small Business Administration (“SBA”) lending process and apparatus lack the speed and capacity required to support the unprecedented and growing demand that exists for small business assistance. Because very few large existing SBA lenders have digital application processes in place today, the success of the Program could be hampered by the amount of time required for businesses to have their applications considered and approved.

Allowing small businesses to share their digital records with lenders by enabling a customer-permissioned data access application environment, however, would provide the institution or fintech making the loan with real-time access to the applicant’s financial transaction data, facilitating the ability to validate, immediately, the applicant’s eligibility under the Program. Customer-permissioned data access could therefore significantly reduce the amount of time required for lenders to consider applications, which in turn would increase the number of applications that any individual lender could consider.

The full letter is here.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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