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U.S. Treasury urged PPP lenders to focus on existing customers: Congress report By Reuters

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© Reuters. FILE PHOTO: FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C.

By Michelle Price

WASHINGTON (Reuters) – The U.S. Treasury Department encouraged banks to prioritize existing customers when dishing out Paycheck Protection Program pandemic loans, disadvantaging smaller businesses against the intent of lawmakers, a Congressional panel said on Friday.

“The Trump Administration and many big banks failed to prioritize small businesses in underserved markets, including minority and women-owned businesses,” the Select Subcommittee on the Coronavirus Crisis wrote in its report. 

Congress in March passed legislation creating the program to help small companies weather the economic shutdown caused by COVID-19, leading banks to dish out more than $520 billion in forgivable government-guaranteed loans.

Under the program, banks can waive normal underwriting standards, but must include anti-money laundering paperwork, which can take weeks to assemble. That documentation was already in place for existing customers, banks have said.

Typically, larger, wealthier companies tend to have pre-existing banking relationships, federal data show.

According to an American Bankers Association (ABA) email obtained by the committee, the Treasury encouraged banks on a call to prioritize existing customers.

“Treasury would like for banks to go to their existing customer base as lenders will have all of the business information,” ABA Chief Executive Rob Nichols told the trade group’s board in the March 28 email, the report said.

A Treasury spokeswoman did not immediately respond to a request for comment. But the agency denied it had addressed the issue of prioritizing existing customers when asked by the committee staff, the report said.

Banks were urged to start processing loans as quickly as possible to support the deteriorating economy, Nichols said in an emailed statement on Friday.

“To achieve that goal, many banks processed applications from existing borrowers first since they already had the necessary borrower information needed to meet regulatory requirements,” he said. “Over time, as the Treasury and (Small Business Administration) provided more clarity, it became easier to gather information to process new customers.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Economy

UK’s Sunak stumps up more help for COVID-hit businesses By Reuters

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© Reuters. FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak is seen at Downing Street in London

By David Milliken and William James

LONDON (Reuters) – British finance minister Rishi Sunak was forced to offer more financial help on Thursday to businesses grappling with a resurgence of the COVID-19 pandemic, which looks increasingly likely to derail the economic recovery.

Sunak told parliament that the government would shoulder more of the burden for paying employees’ wages for businesses that are still open but experiencing difficulties, and offer more money to hospitality companies.

The move — Sunak’s third major announcement in the space of a month — marks a further turnaround after he resisted calls to expand the generosity of government support schemes.

Opponents have said it was obvious that more help would be needed and that it should have come sooner.

Britain – the worst-hit European nation during the COVID-19 pandemic with more than 44,000 related deaths – is now seeing a second wave of the virus, recording 26,688 new cases and 191 deaths on Wednesday.

“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs,” Sunak said.

He told lawmakers the economy was under “enormous strain” and that more jobs would still be lost.

Sunak did not give the cost of the new measures. Government borrowing in the first half of the financial year is already more than six times higher than before the COVID pandemic.

Some sectors are now in dire straits. An official survey published earlier on Thursday showed more than a third of hospitality companies say they are at risk of going bust.

Sunak said he would offer a new grant to hospitality businesses worth up to 2,100 pounds ($2,750) per month that can be claimed retrospectively to August.

He also tweaked the Job Support Scheme designed to dissuade businesses from making people redundant and instead keep workers on reduced hours.

Businesses will now have to pay 5% of the cost of wages for unworked hours, compared with 33% previously, and only need to employ staff for one day a week — 20% of normal hours, rather than a third before.

Following criticism that the government had done too little to help self-employed people, Sunak said he would double the next grants for the self-employed from 20% to 40% of their previous incomes.

His Labour Party opposition counterpart Anneliese Dodds said Sunak had failed to get ahead of the crisis.

“This is becoming like a long-running television show — ‘The Winter Economy Plan: Series 3’. But you know the twist is, it didn’t last the winter, it didn’t do enough to help the economy, and it wasn’t a plan,” she said.

The head of the Resolution Foundation think-tank, Torsten Bell, said Sunak had done the right thing by expanding help for companies.

“Doing it earlier, given the obvious flaws, would have saved more jobs, but at least we’ve got to the right place 10 days ahead of the Job Support Scheme coming into effect,” Bell said.





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Chinese U.S. homebuying sinks By Reuters

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© Reuters.

By Ankit Ajmera and Sanjana Shivdas

(Reuters) – U.S. home sales to Chinese buyers may plunge as much as 60% this year, according to a U.S. real estate industry body, as the travel curbs imposed to thwart the coronavirus counter the impact of a surge in the yuan against the dollar.

Rich Chinese buyers seeking to put away years of export-earned dollars have become the biggest foreign contributor to the U.S. housing market over the past decade.

Deal numbers, however, dropped sank a total of 62% over the last two years to $11.5 billion in the year to last March, as President Trump’s trade war and nerves over whether buyers and their families would be guaranteed visas in future weighed.

The National Association of Realtors now estimates that number could fall further, to between $5 billion and $7 billion in the current year, depending on whether existing travel restrictions on arrivals from China are lifted earlier.

“Chinese investment in U.S. homes is likely to continue to decline,” says Gay Cororaton, NAR director of housing and commercial research.

“There is still a U.S. travel ban on foreign nationals entering the U.S. from China, and Chinese nationals may also be hesitant to travel to the United States with coronavirus cases still on the rise.”

While agents say the Trump administration’s tussles with Beijing has cooled appetite over the past four years, U.S. mortgage rates are at rock bottom and, crucially, the dollar has sunk over 7% against the yuan since May.

Enquiries about U.S. properties with Chinese international property firm Juwai IQI are up 12% this year.

“There is still a great deal of pent-up demand,” Executive Chairman Georg Chmiel says. “Chinese buyers have money and they still value American real estate and the American lifestyle.”

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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BoE’s Haldane says UK spending ‘remarkably resilient’ By Reuters

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© Reuters. FILE PHOTO: The Chief Economist of the Bank of England, Andy Haldane, listens from the audience at an event at the Bank of England in the City of London

By David Milliken

LONDON (Reuters) – British household spending has been “remarkably resilient” through the coronavirus pandemic, Bank of England Chief Economist Andy Haldane said on Thursday.

Haldane noted that U.S. household spending had suffered relatively little from a second wave of cases there over the summer, which might also prove the case in Britain.

Haldane, who has taken a more upbeat view of Britain’s recovery than many of his colleagues at the BoE, was speaking at a conference on economics hosted by the National Institute of Economic and Social Research.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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