CUs continue loan forgiveness, liability protection push
CUNA, Leagues and credit unions continue their engagement with policymakers as Congress works on the next phase of pandemic recovery legislation. Both the Senate and House have passed versions of the legislation, and while both contain some positives, CUNA is pushing for the inclusion of Paycheck Protection Program (PPP) forgiveness legislation, among other provisions.
According to data from the Small Business Administration, as of June 30, 934 credit unions have participated in the PPP, extending over 196,000 loans at an average of approximately $49,000 each.
Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.) introduced a bill June 30 to allow for simple forgiveness of PPP loans under $150,000. Reps. Chrissy Houlahan (D-Pa.) and Fred Upton (R-Mich.) introduced a House companion bill July 25.
The Senate Republican recovery bill, the HEALS Act, includes a PPP forgiveness provision, but not to the extent of the above bills, which also provide a lender safe harbor if the borrower’s attestation contains falsehoods. It would also allow eligible businesses to take a second PPP loan.
Without Congressional intervention, the PPP is currently scheduled to expire on August 7. While discussions regarding legislation to extend the program past its expiration continue, CUNA Chief Advocacy Officer Ryan Donovan said that the SBA could use the time during any lapse of funding to refresh the program’s publicly available data.
“A pause in the program would likely give the SBA time to refresh the data they released in early July. There were some issues with the previously released data, which did not always include accurate employee counts and reflected loans approved but not completed to small businesses,” said Donovan. “Now would be a good time for lenders to clean up the data to get the most accurate reflection of the data.”