NAFCU Says This Is A ‘Step In The Right Direction’ For A Simplified PPP Pardon Application
With the prospect of murky new stimulus legislation, the Trump administration on Thursday launched a simplified loan forgiveness request from the Paycheck Protection Program for companies that have borrowed $ 50,000 or less.
“We are committed to doing the PPP forgiveness process as simple as possible while protecting against fraud and embezzlement, ”Treasury Secretary Steven Mnuchin said.
Financial services business groups, including CUNA and NAFCU, have pushed for legislative changes that would allow automatic loan cancellation for all loans under $ 150,000. However, such changes could not be made by the Treasury Department or the Small Business Administration, but would instead require legislation passed by Congress and signed by President Trump.
In recent weeks, Mnuchin and House Speaker Nancy Pelosi have discussed the contents of a comprehensive coronavirus economic stimulus bill. However, the two sides failed to come to an agreement and President Trump delivered mixed messages this week, first kiboshing any legislation ahead of the election and then urging negotiators to continue their efforts.
“We continue to favor additional legislation to further simplify the forgiveness process,” Mnuchin said Thursday.
The administration said the SBA started approving PPP pardon requests and sending payments to PPP lenders on October 2.
In a rule allowing for streamlined application, the Trump administration said it determined the form struck an appropriate balance between the desire for streamlining and the responsibility to protect the integrity of the program.
The administration said it estimated the total value of loans eligible for the Simplified Application to be around $ 49 million, or 9% of the total PPP loan amount.
In the rule, the administration reiterated its statement that providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, not the lender.
NAFCU expressed satisfaction with the new application process.
“We appreciate the SBA and Treasury’s commitment to streamline the process for canceling PPP loans, and the agency’s new cancellation request for loans under $ 50,000 is an important step in the right direction. “said NAFCU President and CEO B. Dan Berger.
NAFCU and CUNA approved legislation introduced in both houses that would allow automatic loan forgiveness for loans of $ 150,000 or less.
“Instead of crossing overwhelming regulatory hurdles, US small business owners and main street financial institutions will be able to focus on serving their communities,” said Jim Nussle, CUNA president and CEO, approving these measures.
However, a government watchdog group, Responsible.US, said there have been enough frauds uncovered in the PPP program to warrant public disclosure of the amount of each loan granted that has been canceled.
“In order to ensure proper oversight of the process, the public deserves to know which companies have had their loans approved for forgiveness and which have been refused,” Kyle Herrig, group chairman, wrote this week in a letter to the company. SBA administrator Jovita Carranza. .