Hacker News Reader

Comment by ta17711771 | Hacker News Reader

> unless some or all is forgiven.

RIPE for favoritism, aka, corruption.

I don't think favoritism is a concern. The forgiveness guidance is not, to my knowledge, finalized. But what we've seen so far is pretty cut and dried. It's possible some people could convince their lender to forgive more than they should - but certainly those meeting the forgiveness criteria will get it.

Corruption and fraud are certainly possible - though the lenders got paid from the government just for originating the loans. That is, they already made their money. There's no extra money in them over-forgiving a loan.

Favoritism on the part of banks was real.

Source - applicant for 4 separate, PPP loans that were eventually awarded.

Banks are not stupid. They awarded funds first to their clients that had outstanding loans with them. That meant the banks' own portfolio was not impaired, thanks to influx of PPP

Huh? There are rules that if followed allow for forgiveness. The rules will presumably be applied fairly and equally to everyone. That's about the exact opposite of favoritism.

Fairly does not entail equally. Chances are there will be a political calculation done by whoever is in power at the time, and loans will be disproportionately forgiven in a way that offers the most political benefit. The approach taken will be touted as "fair" and the recipients "most deserving of forgiveness".

I don't see why @IG_Semmelweiss comment here is dead, it's not wrong...banks were incentivized to provide capital to their highest debtors / longest clients who otherwise were at greater risk of default and loss to the bank shareholders. It's not complicated, they acted in their best interest because there was by design nothing stopping them.

Reply on news.ycombinator.com