Featured Product

    FED Announces Rule Change in Relation to Paycheck Protection Program

    April 17, 2020

    FED announced a change to an interim final rule to bolster the effectiveness of the Paycheck Protection Program (PPP) of the Small Business Administration. The change will temporarily modify the FED rules to allow certain bank directors and shareholders to apply for PPP loans for their small businesses. The rule change becomes effective immediately and will be in place while the PPP is active. Comments on the interim final rule will be accepted for 45 days after publication in the Federal Register.

    To prevent favoritism, FED rules limit the types and quantity of loans that bank directors, shareholders, officers, and businesses owned by these persons can receive from their related banks. These requirements have prevented some small business owners from accessing PPP loans—especially in rural areas. The Small Business Administration recently clarified that PPP lenders can make PPP loans to businesses owned by their directors and certain shareholders, subject to certain limits and without favoritism. This change will allow banks to make PPP loans to a broad range of small businesses within their communities, in line with the rules and restrictions of the Small Business Administration. The change only applies to PPP loans.

    PPP was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to facilitate lending to small businesses affected by COVID-19. Under PPP, qualified lenders, including many depository institutions subject to section 22(h) of the Federal Reserve Act and the Board’s Regulation O, may make loans to small businesses for payroll-related and other purposes specified in the CARES Act. Loans that meet the requirements for the PPP set forth by the Small Business Administration are guaranteed as to the unpaid principal and accrued interest of the loan. The guarantee for PPP loans provided by the Small Business Administration is backed by the full faith and credit of the United States. Only loans made between February 15, 2020 and June 30, 2020 are eligible for the PPP. 


    Related Links

    Keywords: Americas, US, Banking, Small Banking Administration, Paycheck Protection Program, COVID-19, Credit Risk, CARES Act, Regulatory Capital, FED

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582