NAFCU, the National Association of Federally-Insured Credit Unions, is seeking guidance from the Small Business Administration (SBA) regarding changes to the Paycheck Protection Program (PPP) forgiveness process.
The changes to the interim final rule, which became effective on July 28, touch on three key areas. One, they now allow lenders to use a COVID Revenue Reduction Score at the time of forgiveness to document the revenue reduction of a second draw PPP loan. Two, they establish a Direct Loan Forgiveness Portal. Three, they extend the loan deferment period for PPP loans where the borrower files a timely appeal of a final SBA loan review decision with the SBA Office of Hearings and Appeals.
In an Aug. 27 letter to the SBA, NAFCUʻs Senior Regulatory Affairs Counsel Kaley Schafer urged the SBA to expedite the issuance of any necessary procedural guidance for lenders and consumer-friendly guidance for borrowers. In addition, she urged the SBA to answer any borrower questions posed because of the changes in a timely manner.
“Credit union PPP lenders have adapted as the SBA updated guidance and technology platforms throughout the process; however, with roughly half of all PPP loans outstanding, lenders need guidance at the outset to ensure a quick and seamless transition to using the Direct Forgiveness Process, should they choose to opt-in,” Schafer wrote to SBA leaders.