Featured Product

    FED Extends Certain Relief Under Paycheck Protection Program to March

    February 09, 2021

    FED is temporarily modifying its rules with respect to the Paycheck Protection Program (PPP) to extend the date for allowing certain bank directors and shareholders to apply to their banks for PPP loans for their small businesses. FED, in April 2020 and July 2020, had issued two interim final rules to except such loans made through June 30, 2020 and August 8, 2020, respectively, from the existing requirements of section 22(h) of the Federal Reserve Act and FED's Regulation O. FED is now issuing this interim final rule to further extend this relief to PPP loans, including PPP second-draw loans, made through March 31, 2021. The rule change will be effective on the date of publication in the Federal Register while comments will be accepted for 45 days after its publication in the Federal Register.

    This is the second FED-announced extension of the rule to bolster the effectiveness of the Paycheck Protection Program of SBA. Like the earlier extensions, this one will temporarily modify the FED rules so that certain bank directors and shareholders can apply to their banks for PPP loans for their small businesses. To prevent favoritism, FED limits the types and quantity of loans that bank directors, shareholders, officers, and businesses owned by these persons can receive from their affiliated banks. However, these limits have prevented some small business owners from accessing PPP loans—especially in rural areas. SBA had clarified last year that PPP lenders can make PPP loans to businesses owned by their directors and certain shareholders, subject to certain limits, and without favoritism. This rule extension will allow those individuals to apply for PPP loans, consistent with the rules and restrictions of SBA. The extension only applies to PPP loans. SBA has explicitly prohibited banks from prioritizing or providing favorable processing time to PPP loan applications from a director or equity holder and FED will administer the rule extension accordingly.


    Related Links

    Comment Due Date: FR + 45 Days

    Effective Date: Date of Publication in FR

    Keywords: Americas, US, Banking, COVID-19, Paycheck Protection Program, Small Business Administration, Credit Risk, Loan Guarantee, Regulatory Capital, Basel, FED

    Featured Experts
    Related Articles

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806