The "Paycheck Protection Program" is one of the key programs right now with unemployment claims at 6.6 million last week. That will provide government-backed loans to small businesses that can be forgiven if the borrowers keep paying their employees. Banks don't know at this point how that program is supposed to work on their end, how much of the verification burden is their responsibility, and whether they're going to be held liable if business renege. As of now, the administration says that they'll have to verify that a business was operating as Feb. 15, had been paying its employees, and confirm payroll costs at that point. Banks are saying that going through this process is going to end up delaying loans.

They've told Treasury as much in a memo sent Tuesday: "The choice in administering the program is binary: If the primary goal is to make many loans in a short period of time, then the process must be automated, and the lender must be able to rely on a borrower attestation," the banks told Treasury. "If the primary goal is for the loans to be underwritten to ensure on the front end that all program requirements are met, then lenders will need to establish a process—which will necessarily be manual —to ensure that payroll calculations and other requirements are met. This in turn will entail a delay of weeks or months as lenders establish the necessary policies and procedures and train their personnel."

Another surprise from the administration was the decision to set a 0.5% interest rate on the loans, while Congress had set a cap at 4%. This interest rate, the Independent Community Bankers told Treasury and the Small Business Administration in a separate letter, is too low for many smaller banks and "it will not be economic or feasible to participate in the program." The administration also set a required loan period at just two years, which they argue is too short a term for most small businesses that are struggling. The legislation from Congress allows loan terms as long as 10 years.

They don't seem to have a lot of faith in this administration, in other words, and don't want to be left holding the bag if this process gets messy and there's fraud.