#2021-11, March 26, 2021

Congress Passes PPP Extension Bill; MBA Joins State Associations in Raising Concerns on PPP Forgiveness Delays

The House and Senate approved legislation this week to extend the application deadline for the Small Business Administration’s Paycheck Protection Program (PPP) from March 31 until May 31, 2021.  The bill also provides 30 additional days for the SBA to process loan applications made by the new deadline.  President Biden is expected to sign the measure.

In related news, the Association joined state banking trade associations from around the nation on a letter to SBA urging the agency to provide clarity about the status of PPP loans that have surpassed the 90-day period when the SBA is required to provide a decision on loan forgiveness.  The letter notes that “our members across the country [report] that SBA has exceeded this regulatory deadline, sometimes by weeks or months. This lack of information leaves the small business borrowers in a state of uncertainty and without the ability to fully utilize their capital resources while they wait for a decision from SBA.”

To read the letter, click here.

Bankers Urged to Oppose CUSO Proposal

MBA is urging all member bankers to send letters opposing a recent National Credit Union Administration (NCUA) proposal expanding the range of permissible lending activity for credit union service organizations (CUSOs).  Specifically, the proposed rule allows CUSOs to originate any type of loan a federal credit union may originate, including auto loans and payday loans.

In addition, the NCUA proposal asks for public comment on broadening federal credit unions’ investment authority in CUSOs. As CUSOs are allowed serve people who are not members of a credit union, the expanded authority undermine current field-of membership restrictions.  The proposal also creates safety and soundness and consumer protection risks, as NCUA has no examination or oversight authority over CUSOs, so there is no mechanism to hold them accountable for unsafe and unsound practices or violations of federal consumer financial protection laws.

Comments are due by Monday, March 29, and the Association plans to file a letter next week. The American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) have provided sample letters for bankers to send to the NCUA opposing this proposal.  To access the ABA letter, click here.  To access the ICBA letter, click here.