Many banks also enraged owners at the start by rejecting their applications if they didn’t have multiple accounts including existing loans or lines of credit. And some of the biggest banks in the country took a week or more to start accepting applications. The problems made it more difficult for minority businesses to get loans, according to a report from the Center for Responsible Lending, a research group.
July 4, 2020 | By Annie Nova & Darla Mercado, CFP | CNBC
However, one survey found that just 1 in 10 Black or Latinx small business owners received the assistance they requested under the government stimulus package. The Center for Responsible Lending also found that many Black business owners were shut out of the Paycheck Protection Program, the small business loans designed to keep employees on the payroll throughout the pandemic.
“The customer service of the student loan industry has been terrible,” said Whitney Barkley-Denny, senior policy counsel at the Center for Responsible Lending. “The recession and aftermath of the COVID-19 pandemic will worsen the student loan debt crisis.”
"This is just laying bare all of the cracks and issues that were already there in this foundation and that people of color had been experiencing every single day," said Ashley Harrington, federal advocacy director and a senior counsel at the Center for Responsible Lending.
June 20, 2020 | By Ivette Feliciano & Connie Kargbo | PBS News Hour
The Paycheck Protection Program or PPP provides federally-backed forgivable loans to businesses whose revenues may be impacted by the COVID-19 crisis. According to the Center for Responsible Lending, little of the $659 billion fund has made it to Latino and Black-owned businesses, despite being the communities hit hardest by the crisis. NewsHour Weekend’s Ivette Feliciano reports.
This systemic racism in the credit and wealth-building systems compound the problem, said Ashley Harrington, the federal policy director at the Center for Responsible Lending. For example, in 2012 the Obama administration tightened credit standards for parents to access the PLUS loans, a federal loan program parents can use to pay for their kids’ college.
Listen to an interview with Ellen Harnick on KCBS Radio in San Francisco about the economic fallout of the COVID-19 pandemic. She also offers tips for maintaining and protecting your credit score during the crisis.
Black small-business owners have faced hurdles accessing the Paycheck Protection Program. Here’s how the African-American owners of MahoganyBooks in Washington, D.C., have kept their small business afloat.
The CARES Act provided important temporary relief for student loan borrowers, permitting many with federally held debt to skip payments for 6 months, with borrowers generally given credit towards forgiveness for those payments. The legislation halted collections, though a significant number of borrowers were excluded. However, given the severity of the COVID-19 economic impacts, and the dire circumstances for many student loan borrowers, more comprehensive and long-term student debt relief is required to enable these families to recover.
But the Center for Responsible Lending, a nonprofit group that works to end predatory lending practices aimed at low-income communities, said challenges remain. “This is just a new public health crisis and economic crisis that is coming after so many decades and centuries of structural inequality,” said Ashley Harrington, the center’s federal advocacy director and senior counsel.