Morning Update - May 22
PPP fixes still in negotiations, Unemployment identity fraud is an issue
Good morning,
Just a few quick updates for your Friday. The information below is accurate to the best of my understanding as of Friday, May 22.
Senator King Introduces PPP Fix Bill, Senate Adjourns without Passage, Negotiations Continue
Yesterday, U.S. Senators Angus King (I-Maine) and Steve Daines (R-Mont.) introduced the Paycheck Protection Flexibility Act, a bipartisan bill that would make necessary changes to the Paycheck Protection Program (PPP). The legislation would adjust PPP rules which have prevented some businesses from fully utilizing the funds to address the severe economic impacts of the coronavirus pandemic. The legislation would roll back the 75/25 rule regarding what PPP funds have to be spent on, would extend the 8 week measuring period out to 24 weeks, and would push off the date by which all employees have to be hired back. Additionally, the legislation would extend the payback terms for any non-forgivable portions of the PPP that remain a loan. In addition to Senators King and Daines, Senators Tim Kaine (D-Va.), Thom Tillis (R-N.C.), Debbie Stabenow (D-Mich.), and Cory Gardner (R-Colo.), are original cosponsors of the legislation. Another, similar bill was also introduced in the Senate yesterday. Similar legislation has also been introduced in the House of Representatives by Reps. Dean Phillips (D-Minn.) and Chip Roy (R-Tex.).
The Senate adjourned last night without taking up the bill, but negotiations continue. Senator Marco Rubio (R-Fl.) stated that he did not think that consensus could be reached on a 24 week extension but he thought 16 weeks was more likely. Treasury Secretary Mnuchin has agreed that a longer period of time is needed for spending the PPP funds, but he has so far refused to budge with regard to the 75/25 rule that Treasury imposed (it was not in the originally CARES Act) that requires businesses to spend 75% of their PPP money on payroll costs, even if paying back rent or other overhead bills is a more pressing need for businesses that have been shuttered for months.
Unemployment Identity Fraud Scheme Trickles into Maine
Last week, the U.S. Secret Service (which investigates financial fraud) issued an alert about a potentially enormous financial fraud scheme involving false claims for unemployment benefits. While the scheme initially seems to have been focused in the State of Washington, we’re now receiving some reports of Mainers being targeted. A substantial number fraudulent benefits submitted have used personally identifiable information (PII) from first responders, government personnel, and school employees. It is assumed the fraud ring behind this scheme holds a substantial PII database because of the volume of applications submitted thus far. According to the Secret Service, the scheme has targeted financial institutions of all sizes and is believed to involve hundreds if not thousands of money mules with potential losses of hundreds of millions of dollars. If you receive a notice from the Department of Labor regarding an unemployment claim you did not file or you become suspicious that your identity is being used fraudulently in this manner, you can contact me and we’ll connect you with the law enforcement folks who are investigating this issue in Maine.
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Memorial Day Weekend marks the beginning of summer. Unfortunately, this summer is going unlike any we’ve ever lived through before, and probably not in a good way. But, earlier in this pandemic, we (myself included) spent a lot of time complaining about how the terrible April weather was a metaphor for the terrible crisis that was keeping us at home. If that’s the case, then perhaps we should similarly take the beautiful weather on tap for this weekend as a hopeful sign of things to come, a positive omen or something like that. In any case, it’s certainly a lot better than if the forecast was full of rain (or snow!). Get outside and enjoy it.
Be well and soak in the sunshine.
With love,
Heather
P.S. You can reach me at heather.sanborn@legislature.maine.gov.
P.P.S. You can subscribe to these updates at heathersanborn.substack.com.