ARLINGTON, Va.—Additional guidance is needed by credit unions as they begin to process applications and address tax implications related to first draw and second draw Paycheck Protection Program (PPP) loans, NAFCU told the Small Business Administration in a comment letters.
The SBA’s two IFR’s implementing the Economic Aid Act became effective Jan. 6, while it issued an IFR on loan forgiveness which became effective Jan. 19.
“NAFCU has continued to support legislative efforts to fund the PPP and appreciates the agency’s dedicated processing window for credit unions under $1 billion,” wrote Senior Regulatory Affairs Counsel Kaley Schafer. “NAFCU urges the SBA to reduce loan forgiveness review times, focus reviews on larger and riskier loans, and provide consistent processing, as this is a continued source of frustration for both credit unions and borrowers.”
Schafer also called on the SBA to provide clarification on the timing of supporting documentation for second draw revenue reductions, as well as guidance on remediating errors. Generally, Schafer stated, “additional guidance on PPP loan increases is necessary” so that credit unions may start to process applications and tax implications.
“NAFCU asks that the SBA quickly respond to credit unions requests for help in moving second draw PPP loan applications through the process through the other resolution methods that require SBA assistance,” stated Schafer. “NAFCU asks that the SBA provide second draw PPP loans efficiently while also balancing the need for accuracy.”