CUNA, NAFCU Say PPP Rules Needed Before Loans Are Made
In a letter to the SBA and Treasury, the groups ask for quick loan guidance to help implement loans smoothly.
Financial and industry trade groups, including CUNA and NAFCU, are urging the Small Business Administration and Treasury Department to issue guidance and rules for the resurrected Paycheck Protection Program before any loans are issued.
“It is imperative that SBA, Treasury and other agencies involved provide comprehensive and timely guidance fully detailing the programs’ new rules to minimize any program delays or last-minute changes that would force businesses and lenders to alter loans that are in process of fulfillment,” the groups, including the American Bankers Association and industry groups such as the National Retail Federation, whose members might apply for loans under the PPP, wrote in a letter to the agencies.
Even though he grumbled about some of the bill’s provisions, President Trump on Sunday evening signed the economic stimulus-omnibus funding bill that renewed the PPP, provided for economic impact payments to individuals, and funded much of the federal government through the end of FY21.
Trump did not level complaints about the PPP but said that the $600-per person economic impact payments were too low and that some of the foreign aid, which his administration had agreed to, was wasteful.
When the PPP was created earlier this year, the SBA and the Treasury Department tried to get loan money to businesses as quickly as possible. That meant that during the first several months of the program, the Trump Administration was constantly updating rules and guidance.
The GAO reported in September that the rulemaking process was so confusing and contradictory that financial institutions were reporting “lender fatigue.” And the SBA Inspector General has reported that the program was rolled out so quickly that fraudsters were able to capitalize on the confusion to obtain loans.
In their letter, the groups said that providing guidance in an expeditious manner would save time for borrowers and allow lenders to smoothly implement the program. They said the implementation of the original PPP hit major roadblocks that took weeks to recover.
Nonetheless, some online lenders already are pre-registering potential PPP borrowers.