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A rushed emergency aid program for small companies devastated by the pandemic improperly sent nearly $3.7 billion to recipients prohibited from receiving federal funds, according to a government audit released yesterday, the New York Times reported. The finding adds to a mountain of evidence chronicling what the Small Business Administration’s inspector general, Hannibal Ware, called an “unprecedented amount of fraud” in the agency’s pandemic relief efforts. In October, Ware’s office chastised the agency for improperly doling out billions in relief money to self-employed people who made “flawed or illogical” claims of having additional workers on their payroll. Its Economic Injury Disaster Loan program distributed more than $210 billion last year in loans and grants. The program was organized in a hurry by the Trump administration as millions of businesses temporarily shut down because of the coronavirus and was designed to quickly send out money to help companies keep up on their bills. But the agency failed to do a legally required check of applicants’ identifying details against the Treasury Department’s Do Not Pay system, according to Tuesday’s report from Ware’s office. The Do Not Pay system was set up in 2011 to reduce improper payments to people who are dead, convicted of tax fraud or barred from receiving federal contracts, among other red flags. Ware found 117,135 applicants who got grants and 75,180 recipients who got loans despite matches in the system indicating a “high likelihood” that the payments were improper. Isabella Casillas Guzman, who became the agency’s administrator in March, said at a House hearing this month that she had heightened the agency’s fraud controls over its COVID-19 relief programs. “The guardrails did not exist” last year, under the prior administration, she said. In a response included in Ware’s report, the Small Business Administration said that on April 6, 2021 — more than a year after the disaster loan program began — it started checking Do Not Pay records before sending out funds. The agency also said that it would review the loans and grants previously made to recipients who were flagged as ineligible.

Americans are applying for credit cards at a rate not seen since before the pandemic. Close to 27% of U.S. consumers said in October that they had applied for a credit card in the past 12 months, according to the Federal Reserve Bank of New York, the Wall Street Journal reported. That is the highest level since 2019 and well above the record low of 16% recorded a year ago. The New York Fed data doesn’t account for the new Omicron coronavirus variant, which could set back people’s travel plans and further snarl supply chains. But the rebound in credit-card appetite through the beginning of autumn suggests consumers could continue to drive the U.S. economic recovery. “Many things are slowly returning to more normal times,” said Wilbert van der Klaauw, senior vice president at the New York Fed. “With that, you expect the demand for credit to come back to pre-pandemic levels and continue on the same growth path.” Demand for credit cards and other loans fell during the early months of the pandemic. Americans uncertain about their finances worried about taking on new debt. Restrictions on dining and travel meant that people didn’t have many places to spend money anyway. Things started to change earlier this year after COVID-19 vaccines boosted the U.S. economy. More Americans, after a year of hunkering down, started signing up for new credit cards.

The Treasury Department is redirecting rental-assistance money from some states and localities that haven’t used the bulk of their funds to others facing backlogs of aid requests, according to administration officials, the Wall Street Journal reported. The officials said they couldn’t specify which jurisdictions would lose and gain funds. But they said those with large amounts of unused funds include rural states — like Montana and North Dakota — while local officials in several more populous states — like New York and Texas — are expected to exhaust their rental-assistance money over the coming week and months. Officials said an initial reallocation, set to be unveiled in early December, could exceed $800 million and come at the request of states and localities that acknowledge they have more money than they can spend. Much of that money may be moved within states, rather than from one state to another — for instance, from a state-run program to a city-run program, or vice versa. By the end of the year, the administration expects as much as $20 billion of the $47 billion in rental-assistance funding Congress authorized to be spent. An additional $5 billion to $10 billion will be committed to a specific tenant or landlord but not yet distributed.

While the widespread availability of vaccines is translating into a busier shopping season than last year, businesses of all sizes are grappling with the impact from factory shutdowns overseas, backups at ports, and trucking and other labor shortages, the New York Times reported. For many small businesses, the unpredictability this year has forced them to make buying decisions months or weeks earlier than they normally would and to tie up more of their cash in inventory, which can be risky. “The big thing is you really have to order in advance,” said Dan Quinn, an owner of What We Make, a furniture business in Algonquin, Ill., which sells tables and other wares through Etsy. “I’ve got 14 weeks of projects. I need to get most of that material in house as fast as possible and keep buying it until you have a stockpile basically.”

Federal Reserve Chair Jerome Powell says that the appearance of a new COVID-19 variant could slow the economy and hiring, while also raising uncertainty about inflation, the Associated Press reported. The recent increase in coronavirus cases and the emergence of the omicron variant “pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell says in prepared remarks to be delivered to the Senate Banking Committee on Tuesday. The new variant could also worsen supply chain disruptions, he added. In the past two weeks, other Fed officials have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cite concerns about inflation that has jumped to three-decade highs. Yet Powell’s remarks suggest that the additional uncertainty raised by the omicron variant may complicate the Fed’s next steps.

Airlines are scrambling to limit the impact of the latest coronavirus variant on their networks, while delays in bookings are threatening an already-fragile recovery for global tourism, Reuters reported. Shares in airlines bounced back with the rest of the market on Monday after a sharp sell-off on Friday when the discovery of a new coronavirus mutation took a heavy toll on stocks. The latest outbreak, first reported in southern Africa, dealt a blow to the industry just as it had recovery in its sights, especially following the easing of U.S.-bound travel. Multiple countries including Japan, the United States, Britain and Israel have imposed travel curbs in order to slow the spread of the Omicron coronavirus variant. "The hope for U.S. and European carriers had been that opening the Atlantic would allow them to operate long-haul routes on a cash-positive basis, but border restrictions make it even harder to get the demand in," said James Halstead, managing partner at consultancy Aviation Strategy. A pickup in long-haul traffic is seen critical for many carriers, which have been left with severely strained balance sheets following the plunge in air travel last year. Southern Africa accounts for only a tiny portion of the world's international travel, but sudden border restrictions and route suspensions have left some carriers with an uncertain future.