Featured Product

    US Treasury Issues Rule on Revisions to Paycheck Protection Program

    January 14, 2021

    The U.S. Treasury and the Small Business Administration, or SBA (also US Agencies) published an interim final rule that incorporates amendments, made by Economic Aid Act, to the requirements of the Paycheck Protection Program (PPP). For ease of borrower and lender reference, this interim final rule also consolidates the interim final rules (and important guidance) issued to date to govern borrower eligibility, lender eligibility, application process for PPP, and origination requirements for new PPP loans. The interim final rule also sets out general rules on loan increases and loan forgiveness. This rule is not intended to substantively alter or affect the PPP rules that were not amended by the Economic Aid Act. Unless otherwise specified in this interim final rule, the provisions of this interim final rule became effective from January 12, 2021. However, the comment period on this interim final rule ends on February 16, 2021.

    The PPP is intended to provide economic relief to small businesses adversely impacted by COVID-19 pandemic. The Economic Aid Act reauthorizes lending under the PPP through March 31, 2021 and revises certain PPP requirements. The interim rule outlines the key provisions of the PPP related to eligibility of applicants for PPP loans, which lenders are authorized to make PPP loans, the process for making PPP loans, loan increases, and loan forgiveness, as revised by the Economic Aid Act. Additional rules related to the second-draw PPP loans will be published separately. While this interim final rule fully implements the Economic Aid Act's changes to loan forgiveness, SBA intends to issue a consolidated rule governing all aspects of loan forgiveness and loan review and to provide a single reference point for lenders and borrowers.

    This interim final rule is intended to govern the new PPP loans made under the Economic Aid Act. The rule is also intended to govern applications for loan forgiveness on existing PPP loans where the loan forgiveness payment has not been remitted and should not be construed to alter or affect the requirements applicable to PPP loans closed prior to its enactment, unless the provisions apply retroactively consistent with specific applicability provisions of the Economic Aid Act as identified in this rule. In addition, in this interim final rule, the Treasury exercises its authority under section 1109 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to allow borrowers of first-draw PPP loans to use 2019 or 2020 as the base period to calculate their maximum loan amount. This interim final rule applies to loan applications, including requests for increases, and applications for loan forgiveness submitted under PPP, following an enactment of the Economic Aid Act. This interim final rule also applies to loan forgiveness applications submitted under PPP before enactment of the Economic Aid Act where SBA has not remitted the forgiveness payment.

     

    Related Link: Federal Register Notice

    Comment Due Date: February 16, 2021

    Effective Date: January 12, 2021

    Keywords: Americas, US, Banking, COVID-19, Paycheck Protection Program, Economic Aid Act, Credit Risk, Loan Origination, CARES Act, US Agencies

    Featured Experts
    Related Articles
    News

    PRA Proposes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    PRA proposed rules (in CP12/21) for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies that have been approved or designated in accordance with Part 12B of the Financial Services and Markets Act 2000 (FSMA).

    June 21, 2021 WebPage Regulatory News
    News

    ECB Extends Leverage Ratio Relief for Banks Until March 2022

    ECB Banking Supervision announced that euro area banks it directly supervises may continue to exclude certain central bank exposures from the leverage ratio until March 2022.

    June 18, 2021 WebPage Regulatory News
    News

    OSFI Consults on Treatment of Credit Valuation Adjustments

    OSFI decided to increase the Domestic Stability Buffer from 1.00% to 2.50% of total risk-weighted assets, with effect from October 31, 2021.

    June 18, 2021 WebPage Regulatory News
    News

    HKMA Requires Banks to Submit Plans for Fintech Adoption

    HKMA is requesting banks to participate in a tech baseline assessment, which forms part of the HKMA Fintech 2025 strategy.

    June 18, 2021 WebPage Regulatory News
    News

    OSFI Consults on Operational Risk Capital Data Management Expectations

    OSFI published two documents to consult on the management of operational risk capital data for institutions required, or for those applying, to use the Basel III standardized approach for operational risk capital in Canada.

    June 18, 2021 WebPage Regulatory News
    News

    NGFS on Addressing Financial Stability Issues from Biodiversity Loss

    The NGFS Study Group on Biodiversity and Financial Stability published a Vision paper exploring the case for action in addressing the financial stability concerns arising from biodiversity loss.

    June 18, 2021 WebPage Regulatory News
    News

    ACPR Publishes CREDITIMMO Version 2.3.0 Taxonomy for Banks

    ACPR published the final version of CREDITIMMO 2.3.0 taxonomy for the decree of October 31, 2021.

    June 18, 2021 WebPage Regulatory News
    News

    EC Prolongs Italian Guarantee Scheme for Non-Performing Loans

    EC, has approved, under the EU State Aid rules, the fourth prolongation of the Italian guarantee scheme to facilitate the securitization of non-performing loans.

    June 18, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7128