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NAFCU-rep Payne shares CU experience on PPP loan forgiveness
Leslie Payne, AVP of Commercial Lending at Affinity Credit Union, Wednesday afternoon testified on behalf of NAFCU to discuss the experience of credit unions under the Small Business Administration’s (SBA) paycheck protection program (PPP) loan forgiveness process.
During her testimony before the House Small Business Committee, Payne emphasized that credit unions have gone above and beyond during this time and “borrowers have come to rely on their credit unions to assist them through every phase of the PPP process, including forgiveness.” However, Payne noted that “credit unions continue to grapple with simultaneously processing loan forgiveness applications while meeting the routine needs of their small business members.”
During the hearing, committee members and witnesses discussed the challenges associated with PPP loan forgiveness, including the recently-launched Direct Forgiveness Portal. Witnesses shared the difficulties they’ve had in communicating with SBA and conveyed both lender and borrower experiences with the Direct Forgiveness Portal.
During questioning, Payne noted Affinity's experience with setting up an in-house forgiveness process and challenges posed by the SBA's review process. In addition, Payne voiced support for forgiveness for errors made in "good-faith" by borrowers while they worked to adapt to changing guidance from the administration; the topic of good-faith forgiveness was touched on by several witnesses and committee members.
Ranking Member Blaine Luetkemeyer, R-Mo., noted his concerns with fraudulent PPP loans, specifically noting the higher incidence in loans originated by financial technology companies (fintechs). He urged the committee that further action was needed to look deeper into fraudulent lending and discouraged the adoption of automatic forgiveness for that reason.
NAFCU will continue to advocate for improvements and transparent guidance to ensure credit unions can lend effectively through the SBA’s programs. Stay tuned to NAFCU Today for the latest from the SBA, Treasury, the Fed, and the administration. Access the association's PPP FAQs here.