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Nevada Dept. of Business and Industry extends work from home guidance
On March 15, the Nevada Department of Business of Industry, Division of Mortgage Lending extended its provisional guidance allowing licensed mortgage loan originators to work from home (previously covered here, here, and here) until June 30, 2021.
Michigan regulator urges institutions to protect stimulus payments from overdrafts, fees
On March 15, the Michigan Department of Insurance and Financial Services issued a bulletin “strongly” encouraging financial institutions to protect payments made to customers under the American Rescue Plan from overdrafts and fees. The bulletin further instructs that if a financial institution’s system automatically applies such a payment to a preexisting overdraft, the institution should reverse the application of the direct payment as promptly as possible.
Michigan regulators, business associations urge underserved businesses to apply for PPP loans
On March 15, the Michigan Department of Insurance and Financial Services, the Michigan Bankers Association, Community Bankers of Michigan, the Michigan Credit Union League and the National Business League urged minority-owned and other underserved businesses in Michigan to apply for forgivable loans through the Paycheck Protection Program (PPP) prior to the March 31, 2021 deadline. The announcement highlighted that community development financial institutions offer specialized support to underserved communities and can assist customers with limited or no credit history to obtain a PPP Loan.
Colorado governor extends suspension of regulatory statutes
On March 15, the Colorado governor issued an executive order extending numerous previous executive orders for 30 days. Among other things, the previous orders suspended certain aspects of Colorado statutes concerning foreign entity qualifications to conduct business in Colorado.
California delays implementation of tax treatment law for forgiven PPP loans
On March 12, California Governor Gavin Newsom issued a joint statement along with the California Senate president pro tempore and Assembly speaker related to the tax treatment of Paycheck Protection Program (PPP) loans. California intends to delay those portions of Assembly Bill 1577 that was signed into law on September 9, 2020 relating to forgiven PPP loans, pending detailed guidance from the U.S. Treasury Department regarding certain provisions in the American Rescue Plan Act.
SBA defers all disaster and EIDL loans until 2022
On March 12, the Small Business Administration (SBA) extended the deferment period for all disaster loans, including the Covid-19 Economic Injury Disaster Loan (EIDL) program, until 2022. Specifically, the first payment due date for SBA disaster loans made in calendar year 2020 is extended from 12-months to 24-months from the date of the note. SBA disaster loans made in calendar year 2021 will have their first payment due date extended from 12-months to 18-months from the date of the note. SBA notes that existing SBA disaster loans approved before 2020 that were in regular servicing status of March 1, 2020 (and that previously had received an extended initial deferment period through March 31), will automatically be granted an additional 12-month deferment of principal and interest payments. SBA stresses, however, that interest will continue to accrue on outstanding loan balances through the duration of the deferment.
Biden extends Covid-19 regulatory relief
On March 11, President Biden signed the American Rescue Plan Act of 2021 (the Act), which will, among other things, extend certain emergency authorities and temporary regulatory relief contained in the CARES Act to address the continued impact of the Covid-19 pandemic. Under a section titled, “Committee on Small Business and Entrepreneurship,” the Act will provide an additional $7.25 billion for the Paycheck Protection Program (PPP), extend the eligibility of certain nonprofit entities for covered loans under the PPP, and amend certain aspects of the program allowing for certain businesses to take second loans. However, the Act does not actually extend the PPP, which is currently set to expire on March 31 (covered by InfoBytes here). The Act also allocates nearly $10 billion through the Homeowner Assistance Fund to allow eligible entities to provide direct assistance for mortgage payments, property insurance, utilities, and other housing-related costs to help prevent delinquencies, defaults, and foreclosures. Moreover, a provision related to fair housing activities provides $20 million “to ensure fair housing organizations have additional resources to address fair housing inquiries, complaints, investigations, and education and outreach activities, and costs of delivering or adapting services, during or relating to the coronavirus pandemic.” Additionally, the Act provides $15 billion for Economic Injury Disaster Loan (EIDL) advance payments, including $5 billion for supplemental targeted EIDL advance payments for the hardest hit.
In addition to providing Covid-19 relief, the Act also includes, among other things, a section that modifies the treatment of student loan forgiveness. Specifically, Section 9675 will exclude from gross income any amount of student loan debt that is modified or discharged (in whole or in part) after December 31, 2020, and before January 1, 2026. The tax exemption will include federal, private, and institutional loans. According to a press release issued by Senators Bob Menendez (D-NJ) and Elizabeth Warren (D-MA), the provision is intended to “ensur[e] borrowers whose debt is fully or partially forgiven are not saddled with thousands of dollars in surprise taxes.”
SBA changes income calculations for self-employed PPP applicants
On March 12, the Small Business Administration (SBA) updated its Paycheck Protection Program (PPP) frequently asked questions to reflect recent changes allowing self-employed, Schedule C filers to use gross income to calculate PPP loan amounts. As previously covered by InfoBytes, SBA issued an interim final rule earlier this month implementing the calculation change for loans approved after March 4, 2021. The new FAQ includes options for lenders assisting filers who already applied for a PPP loan but who now want to use gross income to calculate their loan amount. Although some filers may update their calculation, SBA’s guidance states that if a lender “has disbursed the loan and filed the related Form 1502 Report reporting disbursement of the loan, no changes can be made to the loan amount calculation.” Additionally, SBA issued updated guidance on maximum loan amount calculations for First Draw PPP loans, as well as revenue reduction and maximum loan amount calculations for Second Draw PPP loans.
Virginia issues new guidance for electronic notaries
On March 11, the Virginia secretary of state will require every electronic notarial certificate to include: (i) county/city within Virginia where the electronic notary public was physically located at the time the notarization was performed; and (ii) whether the notarization was done in person or by remote notarization. The requirement follows the passage of HB2064, which amends and reenacts certain provisions of the Virginia Code, relating to electronic notary and remote notarization. HB2604 is effective March 11, 2021.
FHFA extends Covid-19 flexibilities until April 30
On March 11, the FHFA announced the extension of several loan origination guidelines put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA extended until April 30 existing guidelines related to: (i) alternative appraisal requirements on purchase and rate term refinance loans; (ii) alternative methods for documenting income and verifying employment before loan closing; and (iii) the expanded use of power of attorney to assist with loan closings. The extensions are implemented in updates to Fannie Mae Lender Letters LL-2021-03 and LL-2021-04, and Freddie Mac Guide Bulletin 2021-10 and Selling FAQs.