ABA President and CEO Rob Nichols recently shared an update and info to all bank CEOs on the Paycheck Protection Program.
To all bank CEOs –
I’m writing to provide a quick update on the SBA’s Paycheck Protection Program, which both expired and was revived last week.
Data Released. In response to calls from Congress for greater transparency, the SBA this morning posted data on all PPP loans, except those that were canceled. The data include city, state, number of employees who benefited, lender name and congressional district. While Congress is expected to have access to the full data, including the names of all borrowers, today’s public release excludes some specifics. Data for loans $150K or greater, for example, include the borrower name but not the precise loan amount; loans under $150K exclude the borrower name but indicate precise loan amount. We know there will be intense media coverage of this data, likely focusing on specific borrowers rather than the program as a whole. We encourage you to consider proactively sharing whatever data you have showing the positive impact of your PPP lending. If you need any help in handling media inquiries, feel free to call on ABA Chief Communications Officer Peter Cook; he and the ABA public relations team will be glad to help.
Program Extended. While the program technically expired June 30, the Senate in a surprise move passed legislation extending the PPP to Aug. 8. The House followed suit, and the president signed it into law this weekend. The extension gives borrowers and lenders an additional five weeks to spend down the approximately $130 billion in funds that remain. The SBA and Treasury will no doubt be encouraging lenders to continue to offer PPP loans and to reach out to eligible small businesses that have yet to take part in the program.
Auto-Forgiveness. The extension makes it that much more important that the PPP loan forgiveness process be streamlined. The intention from the start was always that the PPP loans would be forgiven, but the process and forms borrowers must fill out make that forgiveness process particularly cumbersome.
That’s why I was pleased to see a bipartisan bill introduced last week—by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.)—that would require all PPP loans of $150,000 or less to be automatically forgiven with just a one-page form and a self-certification by the borrower.
ABA supports this auto-forgiveness bill and will be urging Congress to enact the measure. The threshold would apply to some 85% of loans, bringing tremendous relief to borrowers and lenders alike.
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Recognizing the challenges for lenders participating in the PPP—from its chaotic launch to frequent changes in policy—there’s no disputing the program has been a lifeline for millions of America’s small businesses and their employees. The strong June jobs report released last week would appear to be yet another validation of that.
Not only have your efforts had a direct impact on the economy, policymakers have recognized this. Everyone from Federal Reserve Chairman Jay Powell to House Financial Services Committee Chairwoman Maxine Waters have acknowledged that banks have been part of the solution to the economic dislocation caused by the pandemic. So thank you for all you, your bank and its employees have done—and will continue to do—to help the nation through these extraordinary times.
President and CEO
American Bankers Association