WASHINGTON—NAFCU has joined with several other financial services trade organizations in a response to the recently proposed Continuing Small Business Recovery and Paycheck Protection Act. The legislation was introduced by Senate Small Business Committee Chairman Marco Rubio (R-FL) and is under consideration as part of the Senate’s Phase 4 relief package.
The legislation would make changes to the Small Business Administration’s (SBA) Paycheck Protection Program, including an expansion of hold harmless protections for lenders and a simplified forgiveness process for the borrowers.
In the letter sent to Rubio and Ranking Member Ben Cardin (D-MD), the trade groups called for additional clarity on aspects, such as borrower calculations or documentation, that would be necessary to help streamline any future rules “so they do not impair lenders’ ability to provide access to credit by constraining operating resources.”
“In addition, we believe such clarity would provide significant benefits to borrowers and lenders if changes made in your legislation, are fully implemented at one time, to ensure consistency and reliable rules that all parties can depend on when the loan process restarts,” the letter states. “Additional FAQs are to be expected, but the continuous changes like we have seen during the first two phases of PPP—where close to two dozen IFRs and a number of FAQs were issued, even just days before the program is set to expire—have only made the program more complicated for small businesses who do not have the resources to constantly update or amend applications.”
Additional Requests
The groups also called for the inclusion of a provision permitting lenders to rely on an attestation by a small business certifying their eligibility based upon the revenue or receipt reduction thresholds for the programs in order to simplify the process for struggling small businesses. Additionally, the provision allows lenders to swiftly provide small businesses with the assistance they need, added the trade groups.
Last week, the Senate began releasing details of its Phase 4 package – the HEALS Act (Health; Economic Assistance; Liability Protection; and Schools Act) – which includes several items related to small business lending.
Among those provisions are improvements to the PPP, including a simplification of the forgiveness application process for smaller loans.