Dodd-Frank News Center

Members of Congress offer help to investigate PPP loan fraud

This story appeared in Bank Digest.

A bipartisan group of 23 members of Congress have sent a letter to the Small Business Administration and the Treasury Department asking what tools and resources SBA may need, that Congress could provide through appropriations and statutory authority, to be able to fully investigate PPP loan fraud. The letter follows a report published by the SBA Inspector General in July 2020 that stated there are “strong indicators of widespread potential fraud” within two of the fiscal relief programs enacted and expanded by Congress to provide relief to small businesses as they face the economic crisis brought upon by the COVID-19 pandemic.

Treasury and SBA questioned about PPP loan forgiveness applications

This story appeared in Bank Digest.

Four Democratic members of Congress have sent a letter to the Department of Treasury and the Small Business Administration (SBA) urging them to provide an update on Paycheck Protection Program (PPP) loan forgiveness applications. The Treasury Department and the SBA have received nearly 100,000 applications for PPP loan forgiveness. The letter expresses disappointment in the lack of PPP loan forgiveness approvals and requested more information about the delays, stating “this is far too long for borrowers and lenders to be sitting waiting on updated information—and leaves them in an unnecessarily difficult position.”

Treasury’s Crowley issues statement marking CARES Act anniversary

This story appeared in Bank Digest.

Assistant Secretary of the Treasury for Public Affairs Monica Crowley has released a statement on the sixth month anniversary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, noting, “In record time, Treasury helped to launch the Paycheck Protection Program by the Small Business Administration, which supported over 5.2 million small businesses and an estimated 51 million jobs with more than $525 billion in critical funds; issued 160 million Economic Impact Payments to the American people; and disbursed $150 billion to state, local and tribal governments to assist with COVID-19-related expenses.”

 

FDIC acts to mitigate effects of participating in PPP and lending facilities

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has issued a final rule that mitigates the deposit insurance assessment effects of participating in the Small Business Administration’s Paycheck Protection Program as well as the Paycheck Protection Program Liquidity Facility and Money Market Mutual Fund Liquidity Facility established by the Federal Reserve Board. To ensure that the changes are applied to assessments starting in the second quarter of 2020, the final rule will be effective immediately upon publication in the Federal Register with an application date of April 1, 2020.

 

Treasury and SBA agree to make additional PPP data available

This story appeared in Bank Digest.

The Treasury Department and Small Business Administration have agreed to make public additional data regarding the SBA’s Paycheck Protection Program. The agreement with bipartisan leaders of the Senate Small Business Committee is intended to ensure that the interests of both transparency and protections for small businesses are served. Representative James E. Clyburn (D-SC) issued a statement on the agreement in which he said he was pleased that “Treasury and SBA took a step in the right direction by announcing they will release the recipients of ‘nearly 75 percent of the loan dollars approved.’ However, this is far from the full transparency that American taxpayers deserve.” The SBA has also issued a report providing PPP data disclosed through June 20, 2020, including total dollars approved, loan sizes, lender sizes and types, loans approved by state, top lenders, loans by industry sector, and funds remaining.

Mnuchin and Carranza issue joint statement on Paycheck Protection Program Flexibility Act

This story appeared in Bank Digest.

Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza have issued a joint statement on the enactment of the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010). They thanked President Donald Trump and congressional leaders, as well as other Congress members, and said the bill would “provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.”

The release containing the joint statement also noted that the SBA, in consultation with Treasury, will promptly issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the legislative amendments to the Paycheck Protection Program.

FDIC proposed rule would mitigate deposit insurance assessment effects of participating in COVID-19 programs

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has approved a notice of proposed rulemaking that would mitigate the deposit insurance assessment effects of participating in the Small Business Administration’s Paycheck Protection Program and the Federal Reserve Board’s Paycheck Protection Program Lending Facility and Money Market Mutual Fund Liquidity Facility. The proposed rule would ensure that banks will not be subject to significantly higher deposit insurance assessments for participating in these programs. The FDIC is proposing an effective date by June 30, 2020, and an application date of April 1, 2020. Comments on the proposed rule will be accepted for seven days after publication in the Federal Register.

Beatty introduces bill to expand access to PPP

This story appeared in Bank Digest.

Representative Joyce Beatty (D-Ohio) is introducing the Making Opportunities a Reality for Entrepreneurs (MORE) PPP Act, which is intended to ensure that the nation’s small businesses, including minority-owned businesses, independent contractors, and 1099 workers, will have fairer access to participation in the Paycheck Protection Program.

Beatty said, “Since the very beginning of this public health crisis, I have consistently fought to get desperately-needed funding into the hands of small business owners like cosmetologists, barbers, nail technicians, family restaurants, those working from gig to gig, sole proprietors, and self-employed individuals.” She said her bill “will do just that by injecting additional resources into the PPP, setting aside targeted funding for entities with 25 or fewer employees, and instituting safeguards to make sure small businesses—not big, publicly traded companies—can obtain the support they need to weather the virus’ financial fallout and ultimately keep their doors open.”

 

Fed expands access to PPP Liquidity Facility and collateral that can be pledged

This story appeared in Bank Digest.

The Federal Reserve Board has expanded access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders and expanded the collateral that can be pledged. The changes are intended to facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program. As a result of the changes, the Fed said, all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. In addition, eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral to the PPPLF.