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Louisiana governor encourages Louisiana banks and small businesses to continue to be diligent as federal Paycheck Protection Program is implemented
On April 4, the Louisiana governor issued a statement encouraging Louisiana banks and small businesses to continue to be diligent as the federal Paycheck Protection Program is rolled out. Banks are encouraged to continue pursuing access to federal funding and to be patient as the program moves forward. The statement also reiterated additional help for small businesses is available through the previously-announced Louisiana Loan Portfolio Guaranty Program.
Arkansas issues executive order closing nonessential businesses
On April 4, the governor of Arkansas issued an executive order directing certain businesses (which do not include financial services) to close, and offering guidance on how open businesses need to conduct themselves during the Covid-19 crisis.
California counties announce waiver of penalties and charges for late filing of property taxes for inability to pay caused by Covid-19
On April 4, the California State Association of Counties and the California Association of County Treasurers and Tax Collectors announced that California counties will use their existing authority to cancel penalties and other charges for homeowners, small businesses, and other property owners that are unable to pay their property taxes due to circumstances caused by Covid-19 on a case-by-case basis. The statement emphasizes that property owners who can pay or have not been directly affected by Covid-19 should still pay on time to keep critical government services running.
Lawsuit alleges bank is prioritizing lending clients for access to the PPP
On April 4, a group of plaintiffs filed an action against a national bank, alleging that prioritizing existing lending clients and limiting access to the Paycheck Protection Program (PPP) to depository clients and other small firms violates the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Small Business Administration’s (SBA) 7(a) loan program. As previously covered by Buckley Special Alerts (see here and here), the PPP expands 7(a) eligibility for SBA-guaranteed loans that will provide loan forgiveness of up to eight weeks of payroll (based on employee retention and salary levels), as well as additional relief for eligible borrowers. (See Buckley’s dedicated SBA page for additional information.) The plaintiffs contend that the bank declined initially to accept PPP loan applications for small businesses that were not lending clients of the bank. According to the amended complaint, the bank updated its policy on April 4 to allow customers with depository relationships only to apply for PPP loans, provided they do not have a credit card or loan with another financial institution. The plaintiffs argue that the bank has “no legal authority under the CARES Act to deny access, restrict or otherwise impede” small business access, notwithstanding that there is no such prohibition in the CARES Act.
Alaska promotes SBA Paycheck Protection Program
On April 3, the Alaska commissioner of Commerce, Community, and Economic Development released a memorandum to community leaders and small business owners in the state promoting the CARES Act’s Paycheck Protection Program for small businesses and encouraging interested borrowers to participate in the program.
Iowa Division of Credit Unions issues regulatory bulletin on the Paycheck Protection Program
On April 3, the Iowa Division of Credit Unions issued a regulatory advisory bulletin pertaining to small business lending during the Covid-19 crisis. The bulletin provides details on the new Paycheck Protection Program offered through the Small Business Administration as part of the broader CARES Act. The guidelines provide application details for credit unions seeking to participate in the PPP, and specify that SBA-approved 7(a) lenders already qualify to issue PPP loans. The regulatory changes apply only PPP loans, and do not impact or otherwise change traditional 7(a) loans.
Wisconsin Department of Financial Institutions issues guidance for conducting annual meetings
On April 3, the Wisconsin Department of Financial Institutions issued emergency guidance for annual meetings of members and shareholders as a result of Covid-19 emergency measures. The guidance provides that all annual meetings may be conducted virtually, provided the meeting adheres to standard record-keeping obligations.
New York Department of Financial Services encourages participation in Small Business Administration’s paycheck protection loan program
On April 3, the New York Department of Financial Services Superintendent published a letter to state-regulated entities informing them about the Paycheck Protection Loan Program established by the CARES Act. The letter encouraged eligible institutions to participate in the program and urged those not currently eligible to obtain eligibility.
Montana Department of Administration provides information regarding technology-based notarization
The Montana Department of Administration has posted information about technology-based notarizations available to Montana notaries. The guidance describes the mechanics of remote and remote online notarization, the registration requirements for performing technology-based notarization, and the methods of identification for remote and remote online notarizations. A list of Montana Secretary of State approved providers of remote and remote online notarization is included.
Freddie Mac issues guidance to seller/servicers on business continuity plans, borrower relief
On April 3, Freddie Mac issued guidance reminding seller/servicers to maintain a business continuity plan in accordance with the requirements of the Freddie Mac Single Family Seller/Servicer Guide. Sellers and servicers are expected to maintain the business continuity plan and to follow the plan during the Covid-19 pandemic. The guidance noted that Freddie Mac communicated with document custodians at four banks to confirm their business continuity plans are in place, and urged sellers using other document custodians to inquire with those custodians about their business continuity plans. Finally, the guidance summarized the relief that servicers should provide to borrowers impacted by Covid-19, including mortgage forbearance, waiving penalties and fees, halting foreclosure sales and evictions, suspending credit bureau reporting for delinquency related to forbearance, and offering loan modifications after the forbearance period.