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NAFCU, trades call for additional clarity on PPP proposal
NAFCU joined with several other financial services trade organizations yesterday to respond to recently proposed legislation, the Continuing Small Business Recovery and Paycheck Protection Act, introduced by Senate Small Business Committee Chairman Marco Rubio, R-Fla., under consideration for the Senate’s Phase 4 relief package. The legislation would make changes to the Small Business Administration’s (SBA) paycheck protection program, including an expansion of hold harmless protections for lenders and a simplified forgiveness process for the borrowers.
In the letter sent to Rubio and Ranking Member Ben Cardin, D-Md., the trades called for additional clarity on aspects, such as borrower calculations or documentation, that would be necessary to help streamline any future rules “so they do not impair lenders’ ability to provide access to credit by constraining operating resources.”
“In addition, we believe such clarity would provide significant benefits to borrowers and lenders if changes made in your legislation, are fully implemented at one time, to ensure consistency and reliable rules that all parties can depend on when the loan process restarts,” wrote the trade groups. “Additional FAQs are to be expected, but the continuous changes like we have seen during the first two phases of PPP—where close to two dozen IFRs and a number of FAQs were issued, even just days before the program is set to expire—have only made the program more complicated for small businesses who do not have the resources to constantly update or amend applications.”
The groups also called for the inclusion of a provision permitting lenders to rely on an attestation by a small business certifying their eligibility based upon the revenue or receipt reduction thresholds for the programs in order to simplify the process for struggling small businesses. Additionally, the provision allows lenders to swiftly provide small businesses with the assistance they need, added the trade groups.
Last week, the Senate began releasing details of its Phase 4 package – the HEALS Act (Health; Economic Assistance; Liability Protection; and Schools Act) – which includes several NAFCU-supported items related to small business lending.
Among those provisions are improvements to the PPP, including a simplification of the forgiveness application process for smaller loans, something NAFCU has advocated for as part of the Paycheck Protection Small Business Forgiveness Act for loans under $150,000 as well as other changes for loans between $150,000 and $2 million.
NAFCU will continue its aggressive advocacy efforts to ensure credit unions' needs are included in any final legislation; stay tuned to NAFCU Today for the latest developments. Access NAFCU's PPP FAQs here.