COVID-19 UPDATES / GOVERNMENT RELATIONS
SBA Streamlines PPP Forgiveness Application for Many PPP Borrowers
As reported on Wednesday, the Small Business Administration released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:
• Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
• Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
• Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.
The streamlined forgiveness form is expected to smooth the forgiveness application process for a substantial portion of PPP borrowers. SBA also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act and issued a new interim final rule that implements changes made by the PPPFA
Download the instructions for Form 3508EZ
Download the revised Form 3508
Download the instructions for Form 3508
OCC Releases Bulletin on Preemption
The Office of the Comptroller of the Currency on Wednesday sent a bulletin stating that while the OCC recognizes that a wide range of stakeholders, including state and local governments, have an important role to play in the country’s COVID-19 response, the agency reminds stakeholders that banks are governed primarily by uniform federal standards. The bulletin stated that while state and local action are well-intended, the OCC is concerned that the proliferation of a multitude of competing requirements will conflict with banks’ ability to operate effectively and efficiently, potentially increasing the risk to banks’ safety and soundness and ultimately harming consumers. The OCC encourages states and localities to expressly exempt federally chartered banks from their laws and invites states and localities to reach out to the OCC with any concerns.
FHFA, FHA Extend Foreclosure, Eviction Moratoriums
The Federal Housing Finance Agency announced Wednesday that it would extend – through Aug. 31 at a minimum – a moratorium on foreclosures and evictions for single-family mortgages backed by Fannie Mae or Freddie Mac. The current moratorium was expected to expire on June 30.
“To protect borrowers and renters during the pandemic we are extending the Enterprises’ foreclosure and eviction moratorium,” said FHFA Director Mark Calabria. “During this national health emergency no one should worry about losing their home.”
The Federal Housing Administration similarly extended through Aug. 31 its foreclosure and eviction moratorium for homeowners with FHA-insured single-family mortgages
Powell: Main Street Lending Facility to Open ‘Within a Week or So’
After officially opening the Main Street Lending Program for lender registration on Monday, Federal Reserve Chairman Jerome Powell said Wednesday that its corresponding Main Street Lending Facility will begin receiving MSLP loans “within a week or so.” The Fed will purchase 95% of each eligible loan submitted to the MSLP, provided that those transactions are consistent with the facility’s requirements.
Responding to concerns about the take-up rate for the program, Powell assured members of the Senate Banking Committee that “we feel there’s substantial interest on the part of bankers for this,” adding that the Fed has made several changes to the program in recent days to facilitate participation by more small and midsize firms.
“As we have been since the very beginning, we are very open to learning and adapting,” he said. “We have made repeated changes to these facilities to make them better structured to achieve their goals, and we’ll continue to do that.” Powell also noted that in the days ahead, “if we’re hearing about companies for whom a loan is the right answer who do not for some reason qualify for the Main Street loan facilities and should, then we’ll be adapting to that.”
Read Powell's written testimony
Sen. Moran Introduces Industry-Backed Brokered Deposit Modernization Bill
Sen. Jerry Moran (R-Kan.) on Monday introduced a bill to replace current restrictions on brokered deposits with an asset growth restriction that better reflects today’s financial services environment. S. 3962 – which would replace Section 29 of the Federal Deposit Insurance Act with limitations on asset growth, removing brokered deposit restrictions.
SBA’s Carranza: Prioritize Underserved Businesses in Remaining Days of PPP
With just two weeks left before the Small Business Administration’s Paycheck Protection Program expires, SBA Administrator Jovita Carranza urged lenders to prioritize PPP loans for underserved and rural markets. These market segments include veterans, businesses owned by low-to-moderate-income individuals, women and firms in business for less than two years.
“The SBA is asking you to redouble your efforts to assist eligible borrowers in underserved and disadvantaged communities, allowing us to expand economic opportunity, before the upcoming deadline of June 30, 2020, to obtain a loan number for a PPP loan,” Carranza said. Carranza also recognized the work of community development financial institutions, minority depository institutions and other PPP lenders in “leading the way to serve individual entrepreneurs and small businesses in underserved communities.”
ICYMI - Main Street Lending Program Lender Portal Now Open
On Monday, the Federal Reserve Bank of Boston announced that the Main Street Lending Program Lender Portal is open. The program is to operate through three facilities: the Main Street New Loan Facility; the Main Street Priority Loan Facility; and the Main Street Expanded Loan Facility.
U.S. Treasury Secretary Steven T. Mnuchin issued a statement indicating: “As announced last week, the portion of the loans retained by the originating bank has been lowered to five percent for all eligible loans submitted to the program, creating additional balance sheet capacity for participating lenders. I encourage all eligible lenders to register in order to provide loans to eligible borrowers as soon as possible.”
For more information, visit www.bostonfed.org/mslp.
Access the Main Street Lending Program Lender Portal
ICYMI - New Applications Being Accepted for COVID-19 EIDL Advance
The U.S. Small Business Administration has announced that new applications are being accepted for the COVID-19 Economic Injury Disaster Loans (EIDL) Advance program. The advance of up to $10,000 is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. The loan advance will not have to be repaid. SBA resumed processing EIDL applications that were submitted before the portal stopped accepting new applications on April 15 and will be processing those applications on a first-come, first-served basis. On June 15, SBA began accepting new EIDL and EIDL Advance applications from qualified small businesses and U.S. agricultural businesses.
The new eligibility for agricultural businesses is a result of additional funding appropriated by Congress in response to the COVID-19 pandemic. Agricultural businesses include those engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)). SBA is encouraging all eligible agricultural businesses with 500 or fewer employees wishing to apply to begin preparing their business financial information needed for their application.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.