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NAFCU's Thaler pushes for simplified PPP forgiveness process
Ahead of today's House Small Business Committee oversight hearing of the Small Business Administration (SBA) and Treasury Department's programs created to help mitigate the effects of the coronavirus pandemic, NAFCU's Brad Thaler reiterated the association's call to simplify the forgiveness application processes for paycheck protection program (PPP) loans.
"While credit unions are working with their members to assist them with the current loan form, the complexity of the forgiveness rules and application is posing challenges for many small businesses who may not have the staff or expertise for such a complex application, especially with the current economic challenges," wrote Thaler, NAFCU's vice president of legislative affairs.
"We were pleased to see the SBA take steps to address this with the creation of the 3508EZ form, but NAFCU members report that they do not see a huge difference in terms of processing the application as they still need to verify expenses and supporting documentation to ensure that they are meeting the lender requirements," Thaler added.
Thaler also shared NAFCU's support for bipartisan legislation – the Paycheck Protection Small Business Forgiveness Act – that would ease the forgiveness process for loans under $150,000.
"A smaller PPP loan is less likely to pose a high risk of fraud so the benefits to small businesses and lenders of providing this automatic or simplified forgiveness significantly outweigh the potential risks," noted Thaler. "Moreover, such a simplified forgiveness process frees up human capital at a time when credit unions and small businesses may be short-staffed due to ramifications of COVID-19."
The association has previously called on the SBA to support automatic forgiveness for these loans and most recently joined with more than 140 other trade groups to urge Congress to pass the pending legislation is the senate.
Additionally, Thaler asked the committee to push the SBA and Treasury to publish a comprehensive procedural notice explaining how lenders can upload and submit loan forgiveness applications, as well as guidance on the appeal and denial process.
Since the creation of the PPP, NAFCU has consistently worked with Congress, the SBA and Treasury to ensure credit unions can lend effectively through the program and lenders and ensure lenders and borrowers are not overly burdened by the application or forgiveness process. access NAFCU’s regularly updated FAQs here.