CUNA and the Leagues wrote a letter to the Small Business Administration (SBA) and the Treasury Friday to seek clarity on Paycheck Protection Program (PPP) loan forgiveness. Credit unions and other lenders need detailed guidance on loan forgiveness as conflicting processes are likely to create problems and lead to litigation.
“Credit unions are concerned that the recently published application for loan forgiveness is overly complex for most businesses. The complexity of the forgiveness process presents an even greater challenge for small business as they have fewer resources to deploy on an overly complex application process,” the letter reads. "Creating an overly complex forgiveness process would seem to be the antithesis to the spirit of a program designed to rapidly deploy resources to small business especially when the expectation is that the funds appropriated to PPP were never expected to be repaid.”
In the letter, CUNA and the Leagues call on the SBA and Treasury to revamp the forgiveness application process for loans under $350,000; simplify or make automatic for the smallest of borrowers requiring nothing more than a good faith certification that the funds were spent on forgivable expenses.
Earlier this month, with support from the Leagues, CUNA wrote to the Senate Banking Committee to express concerns that credit unions have over the PPP process, including credit union liability regarding forgiveness of these loans.