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House to consider PPP reforms; SBA, NAFCU update FAQs
The House next week is expected consider a bipartisan plan to ease restrictions on how businesses use the Small Business Administration's (SBA) paycheck protection program (PPP). In addition, the legislation would help ensure businesses' PPP loans are still forgiven with the added flexibility.
Although the $3 trillion HEROES Act, passed by the House last week, has been a large focus of House Speaker Nancy Pelosi’s, D-Calif., recent efforts, a new piece of legislation to help ease the concerns around the PPP could “reduce the sense of urgency some in Congress have to pass another big relief measure,” reported Politico.
The proposed legislation would reportedly give businesses 24 weeks to spend the money from the program and would eliminate a requirement that at least 75 percent of the PPP loan forgivable amount must be used toward payroll. If the legislation were to pass the House next week, the Senate could act on it when it returns from its Memorial Day recess.
Last week, the SBA released an application for paycheck protection program (PPP) loan forgiveness and instructions for borrowers. NAFCU has urged the agency to release guidance on loan forgiveness since shortly after the program launched in April.
NAFCU will continue to monitor the situation and remain in contact with the SBA, Treasury, and Congress to ensure credit unions can lend effectively through the PPP. NAFCU Chief Economist and Vice President of Research Curt Long joined Marketplace Morning Report yesterday to share insights into the SBA’s loan program and the recent drop in the overall PPP loan size.
In addition, the SBA has updated its PPP FAQs extending the timeline for initial 1502 reporting to May 29, or 10 days after disbursement or cancellation of the PPP loan. NAFCU has its own PPP FAQs available – updated yesterday with recent developments – to help credit unions that are providing loans through the program through the process.
Stay tuned to NAFCU Today for the latest on PPP. Access all the association's coronavirus resources here.