Page 4 - Bulletin 05_14_20
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aRTiCLeS


        SBA Releases Borrower                                   an adequate basis for the required certification concerning the
        Application, Instructions for PPP                       necessity of the loan request, SBA will seek repayment of the
                                                                outstanding PPP loan balance and will inform the lender that the
        Loan Forgiveness                                        borrower is not eligible for loan forgiveness,” SBA said.

        The SBA and Treasury Department have                    SBA added that borrowers who repay their loans after receiving
        released the application that borrowers must            notification from the SBA will not be subject to administrative
        complete to have their PPP loans forgiven.              enforcement or referrals to other agencies. Additionally, SBA’s
        The form includes detailed information about            determination regarding the necessity of the loan request will not
        the costs that are eligible for forgiveness and         affect the SBA loan guarantee.
        instructions for calculating those costs.               To access the form, visit: https://home.treasury.gov/system/
        SBA announced several measures intended to reduce compliance   files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.
        burden and simplify the forgiveness process for borrowers,   pdf
        including a safe harbor from loan forgiveness reduction for
        borrowers that were able to rehire employees who had previously   FDIC Proposes Rule to Facilitate
        been let go or laid off by June 30, 2020. It also included an   Bank Participation in PPP, Money
        exemption from forgiveness reduction for borrowers who have
        made a good-faith, written offer to rehire workers that was   Market Facilities
        declined.                                               To help provide certainty to banks
        Additionally, SBA provided an option for borrowers to calculate   participating in the Paycheck
        payroll costs using an “alternative payroll covered period” that   Protection Program and its associated
        aligns with their regular payroll cycles, and flexibility to include   lending facility, as well as the Money
        eligible payroll and non-payroll expenses paid or incurred during   Market Mutual Fund Liquidity Facility, the FDIC has proposed a
        the eight-week period after receiving their PPP loan.   rule to ensure that institutions would not be subject to increased
                                                                deposit insurance assessments as a result of their participation.
        SBA noted that it will soon issue regulations and additional
        guidance for borrowers on completing the forgiveness form, as   Specifically, the proposal would remove the effect of participation
        well as guidance for lenders detailing their responsibilities.  in the PPP and PPPLF on various risk measures used to calculate
                                                                a bank’s assessment rate and remove the effect of participation
        To access the form, visit: https://content.sba.gov/sites/default/  in the PPPLF and MMLF programs on certain adjustments to a
        files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20    bank's assessment rate. It would also provide an offset to a bank's
        Forgiveness%20Application.pdf
                                                                assessment for the increase to its assessment base attributable to
        SBA Announces Safe Harbor for                           participation in the MMLF and PPPLF and remove the effect
                                                                of participation in the PPPLF and MMLF programs when
        PPP Borrowers with Loans for                            classifying insured depository institutions as small, large or highly
        Less than $2M                                           complex for assessment purposes.
                                                                If finalized, the rule would take effect June 30, but have an
        Following the recent                                    application date of April 1, ensuring that the changes will be
        announcement that the SBA                               applied to assessments beginning in the second quarter of
        would review any PPP loans                              2020. Comments on the proposed rule are due seven days after
        made in amounts exceeding                               publication in the Federal Register.
        $2 million, the agency issued
        guidance extending an                                   To read the proposed rule  visit: https://www.fdic.gov/news/
        automatic safe harbor to borrowers receiving PPP loans with   board/2020/2020-05-12-notational-fr.pdf
        an original principal amount of less than $2 million. These
        borrowers “will be deemed to have made the required certification  McWilliams: Banks Should Rely
        concerning the necessity of the loan request in good faith,” SBA   on Borrower Certifications When
        said in updates to its PPP FAQ.                         Making PPP Loans
        Borrowers that received PPP loans for amounts over $2 million
        will be subject to review by the SBA for compliance with program   FDIC Chairman Jelena McWilliams confirmed that banks should
        requirements, including the certification of economic need. “If   rely on borrowers’ statements certifying that their economic need
        SBA determines in the course of its review that a borrower lacked   is legitimate when making PPP loans, referencing a recent interim



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