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Joint BPI and CBA Comment Letter re Implementing the Paycheck Protection Program
Dear Acting Administrator Perriello,
We appreciate the SBA’s interest in views on additional guidance that would be helpful to borrowers and lenders. As you are well aware, in accordance with the Economic Aid Act, commitment authority for the Paycheck Protection Program is set to end on March 31, 2021. Despite this fast approaching date, numerous issues related to loan origination remain in need of further guidance from the SBA;1 program rules continue to be issued or changed, including relating to the potential eligibility of Schedule C filers based on the SBA’s forthcoming guidance. Further, once the exclusive application period for borrowers with fewer than 20 employees expires on March 10th, there may be a flood of applications from a wider pool of borrowers – all just three weeks before the end of the loan origination phase of the program.
In light of the above, and in order to provide for an orderly end to loan originations under the program while maximizing borrower access, we respectfully request that the SBA allow loan applications that are subject to SBA compliance check error messages, hold codes, API fails or other administrative holds as of March 31st to continue to be processed to completion by lenders and the SBA, at least until June 30, 2021. Doing so would assist thousands of eligible borrowers whose applications are or will be subject to administrative delays through no fault of their own. The SBA could conditionally commit program funds to such applications by March 31st, subject to the successful resolution of the administrative holds. Thousands of borrower applications are currently subject to compliance check error messages, hold codes, API fails or other administrative holds, and we believe a 90-day period would provide lenders and the SBA sufficient time to resolve SBA-driven or other administrative holds, including by gathering and submitting necessary documents. Indeed, in our members’ experience, many of the smallest borrowers, and thus those generally most in need of PPP loans, are generally subject to a greater number of SBA holds than larger borrowers. As such, smaller borrowers, which the Administration and the SBA have identified as needing greater and more streamlined access to funds, may be most at risk of losing access to funds.
If the SBA is unable or unwilling to provide such guidance, we believe, at a minimum, that the SBA should provide clear guidance to borrowers and lenders as to the final date that lenders may submit applications via the SBA PPP Platform and relatedly, the final date by which lenders may accept applications to meet that deadline. This would provide clarity to applicants in need of funds that they must submit their applications to lenders in advance of the March 31 deadline – which in some cases may take up to three weeks to process – so that their applications may be processed appropriately, and their ability to access funds is not foreclosed.
The Bank Policy Institute2 and The Consumer Bankers Association3 would appreciate the opportunity to discuss the above-referenced matters with you if you have any questions. If so, please contact Paige Paridon at 703-887-5229.
Paige Pidano Paridon
Senior Vice President, Associate General Counsel
Bank Policy Institute
General Counsel, Senior Vice President
Consumer Bankers Association