The Small Business Administration (SBA) failed to provide lenders, including credit unions, with crucial guidance they needed to help root out fraud in the Paycheck Protection Program (PPP), the agency’s Inspector General (IG) said in a report released late last week.
“SBA should have provided lenders specific guidance from the onset to identify, track, address and resolve potentially fraudulent loans. Establishing strong upfront controls helps ensure lenders know how to effectively handle fraud,” the highly critical assessment stated.
The IG added that working with lenders was essential because they work directly with borrowers and have the authority to process and service loans.
“Because SBA did not provide specific guidance to lenders, they were faced with uncertainty on how to resolve issues they were uncovering,” the IG said.
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