COVID-19 UPDATES
SBA Provides Guidance on Monthly Form 1502 Filings; First Report Due July 17
In a procedural notice last night, the Small Business Administration provided guidance on the monthly Form 1502 reports that lenders must file on unpaid or unforgiven Paycheck Protection Program loans. The report is due on the 15th of each month or on the next business day after the 15th if it falls on a weekend or holiday. For this month only, SBA provided a two-day grace period, making the first monthly filing deadline Friday, July 17.
Lenders should continue filing monthly reports until their PPP loans are forgiven or repaid in full, SBA said. The procedural notice also includes newly added guidance on how lenders should report a canceled PPP loan on Form 1502.
Meanwhile, SBA reported that PPP loans now total 4.9 million amounting to $517.4 billion.
Groups Support Automatic Forgiveness for PPP Loans Under $150K
Last week the American Bankers Association and Independent Community Bankers of America joined a broad coalition of nearly 150 trade associations and advocacy groups in strong support of a bipartisan bill that would expedite the forgiveness process for most borrowers who received loans through the Small Business Administration’s Paycheck Protection Program. Sponsored by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.), the Paycheck Protection Program Small Business Forgiveness Act would allow PPP loans of $150,000 or less to be automatically forgiven once the borrower completes a one-page forgiveness document.
The bill is expected to ease the forgiveness process for approximately 86% of PPP borrowers, in addition to saving an estimated $7 billion and hours of paperwork, according to the groups. “This bipartisan legislation would ensure our nation’s small business owners can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms,” they noted.
Also last week the Indiana Bankers Association joined with a group of 50 other state bankers associations to submit a letter in support of the bill. “Banks of all sizes will continue to support their business customers and do their part to spur the economic recovery to come,” the associations wrote. “In order to help our nation’s smallest small businesses, we urge Congress to quickly pass the Paycheck Protection Program Small Business Forgiveness Act to provide necessary relief to millions of small businesses.”
Action Alert: Ask the Senate to Simplify Forgiveness for PPP Loans $150,000 and Under
The IBA is asking members to contact their senators in an effort to increase support for S. 4117, the Paycheck Protection Program Small Business Forgiveness Act. As referenced in the story above, this bill has broad support from national trade associations and state banking associations across the country. Please contact your senators today and ask for their support to pass this legislation that will expedite the forgiveness process for the majority of borrowers that received loans through the PPP.
Fed Proposes Revisions to Capital Assessments, Stress Testing Reports
The Federal Reserve has announced temporary revisions to its Form FR Y-14A/Q/M, the Capital Assessments and Stress Testing Reports. The temporary revisions, which would collect data pertaining to certain aspects of the CARES Act, information on firm activity associated with various Federal Reserve lending facilities and information regarding emerging risks arising from the COVID-19 pandemic, apply to reports beginning with the July 31, 2020, or Sept. 30, 2020, as-of date.
Additionally, the Fed is seeking comments on a proposal to extend for three years, with revision, the FR Y-14A/Q/M reports to address questions related to the reporting of certain current expected credit loss and capital data, which would be applicable to reports beginning with the Dec. 31, 2020, as-of date. Comments on the proposal are due Sept. 8.
FHFA Extends Loan Processing Flexibilities for GSEs
To continue providing support to mortgage borrowers during the coronavirus pandemic, the Federal Housing Finance Agency indicated it would extend until Aug. 31 certain previously announced loan processing flexibilities. These flexibilities – which were set to expire at the end of this month – include allowing alternative appraisals on purchase and rate term refinance loans, alternative methods for documenting income and verifying employment before loan closing, and expanding the use of power of attorney and remote online notarizations to assist with loan closings.
Fed Publishes Partial State-by-State List of MSLP Lenders
The Federal Reserve last week unveiled an interactive state-by-state map listing lenders participating in the Main Street Lending Program that have chosen to be listed and are currently accepting applications from new customers. MSLP-registered lenders that wish to be added to the Federal Reserve Bank of Boston’s list can email MSLP@bos.frb.org. The Boston Fed will update the listing regularly as new lenders complete the registration process and elect to be included on the map.
Under the MSLP, businesses may apply for funding through a registered lender, which will then determine eligibility using its own underwriting criteria. The Fed will purchase up to 95% of MSLP loans made through its MSLP facility. Lenders will retain the other 5%.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.