JPMorgan Chase is still having issues processing the thousands of Paycheck Protection Program (PPP) applications it received through the online portal that went live Friday, according to an executive familiar with the process.
The problem isn’t tied to JPM’s system—it stems from the lack of clear guidance from the government about the program’s requirements and the lack of a streamlined way to transfer information from the bank’s customers to the Small Business Administration (SBA) on day one, said the person.
“The biggest struggle so far has been in locking down the SBA on what information we need to send them in order to get a loan number,” said the person. “And that loan number is the most important thing because that’s what allows us to then fund the customer.”
It’s becoming clear that the government didn’t plan this out well and that the volume is greater than it expected, the person said.
Officials at the Treasury Department and SBA pushed back on the criticism, citing the fact that smaller lenders have been able to process the application.
“Billions of dollars in loans have been registered on the very first day of activity. We are continuing to update guidance and work with lenders to ensure that all eligible borrowers and lenders are able to participate in this critical program to provide much-needed relief to hardworking Americans and businesses,” said a Treasury spokesman.
But it appears the administration rolled out the program before providing the larger lenders the tools they need to process large volumes, said the person familiar with JP Morgan Chase’s progress in processing the PPP applications.
A bottleneck: Right now, on the front end, the bank’s online portals are taking thousands of applications, but the applications are getting stuck because the back-end requires bank representatives to call each applicant for more information.
That’s because the front-end online application has been streamlined to the most basic questions, which don’t give the bank enough information to complete the SBA form. As a result, a bank rep has to call each applicant.
“The volume is going to be small in the beginning,” said the person.