WASHINGTON—NAFCU wrote to the Small Business Administration (SBA) concerning its interim final rule (IFR) to make changes to the Paycheck Protection Program (PPP) forgiveness process.
According to the SBA, the IFR – which became effective July 28 – makes three key changes, including:
- It allows lenders to use a COVID Revenue Reduction Score at the time of forgiveness to document the revenue reduction of a second draw PPP loan
- It establishes a Direct Loan Forgiveness Portal
- It extends the loan deferment period for PPP loans where the borrower timely files an appeal of a final SBA loan review decision with the SBA Office of Hearings and Appeals
SBA Urged to Speed Things Up
In the letter, Senior Regulatory Affairs Counsel Kaley Schafer urged the SBA to expedite the issuance of any necessary procedural guidance for lenders and consumer-friendly guidance for borrowers. In addition, she urged the SBA to answer any borrower questions posed because of the changes in a timely manner.
"Credit union PPP lenders have adapted as the SBA updated guidance and technology platforms throughout the process; however, with roughly half of all PPP loans outstanding, lenders need guidance at the outset to ensure a quick and seamless transition to using the Direct Forgiveness Process, should they choose to opt-in," explained Schafer.
CU Exec to Testify
Of note, the House Small Business Committee will meet this week to discuss the SBA’s PPP forgiveness process during a hearing on Wednesday where Leslie Payne, associate vice president of commercial lending at Affinity FCU, is scheduled to testify on behalf of NAFCU.