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On January 29, the Small Business Administration (SBA) updated its Paycheck Protection Program (PPP) frequently asked questions to further address borrower and lender questions. Among other things, the updated FAQs clarify that FinCEN’s April 2020 PPP FAQs are applicable to Second Draw PPP loans. In addition, for purposes of Bank Secrecy Act (BSA)/anti-money laundering compliance, SBA states that PPP lenders can rely on the same information received from a borrower during a First Draw loan application for a Second Draw PPP loan provided the borrower is an existing customer. Accordingly, FinCEN, as administrator of the BSA, published updates to its FAQs to include SBA’s newest clarifications. Additionally, SBA notes that FAQs 1-53 are currently being revised and do not reflect changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act enacted on December 27, 2020 (covered by InfoBytes here).
Recently, the Small Business Administration (SBA) issued a procedural notice informing lenders that the Paycheck Protection Program (PPP) platform will begin processing new Second Draw PPP loan guarantee applications for borrowers who still have unresolved issues related to their First Draw loans. Second Draw submissions for unresolved borrowers will automatically be moved to a “research status,” providing opportunities for lenders to submit necessary documentation to support the resolution of outstanding First Draw issues. Information concerning the unresolved issues and resolution assistance will also be provided by SBA. Once outstanding First Draw issues are resolved, Second Draw loan applications will automatically be submitted into the next processing stage and will not require re-entry by the lender. However, if an outstanding First Draw issue cannot be resolved, lenders should withdraw a borrower’s Second Draw application from the platform. SBA notes that if a Second Draw application submitted before January 27 was rejected due to an unresolved First Draw issue, the lender should resubmit the application. SBA also issued several other procedural notices related to provisions under the Economic Aid Act (covered by InfoBytes here) that address, among other things, modifications to SBA’s 7(a) loan program, the elimination of certain 504 loan program fees, and a notice to lenders that SBA has informed eligible borrowers of available Section 1112 CARES Act assistance.
On January 13, the Small Business Administration (SBA) announced that the Paycheck Protection Program (PPP) loan portal will open to all eligible lenders with $1 billion or less in assets for First and Second Draw applications on January 15, with the portal fully opening on January 19 to all participating lenders. As previously covered by InfoBytes, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) provides an additional $284 billion for the PPP, extending the authority to make PPP loans through March 31, amending certain aspects of the program, and allowing for certain businesses to take second loans. The PPP portal initially reopened on January 11 to community financial institutions only in order to reach underserved and minority small businesses.
- Jonice Gray Tucker to join CFPB panel at CBA’s Washington Forum
- Jonice Gray Tucker to moderate “Pandemic relief response and lasting impacts on access, credit, banking, and equality” at the American Bar Association Business Law Section Spring Meeting
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference