On January 8, the U.S. Small Business Administration, in consultation with the Treasury Department, announced that the Paycheck Protection Program will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. Release.
Paycheck Protection Program
Treasury and IRS Issue Guidance Clarifying the Deductibility of Expenses Where a Business Received a PPP Loan
On November 18, the U.S. Treasury Department and Internal Revenue Service (IRS) released guidance clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. Release.
SBA and Treasury Announce Simpler PPP Forgiveness for Loans of $50,000 or Less
On October 8, the Small Business Administration (SBA), in consultation with the Treasury Department, released an Interim Final Rule providing for a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. The new rule is intended to ease burdens on small borrowers and PPP lenders in submitting and processing loan forgiveness applications. Treasury Press Release. Interim Final Rule.
Federal Reserve Rule Change Allows Bank Directors and Shareholders to Receive PPP Loans
On July 15, the Federal Reserve Board (FRB) announced it was extending a recent rule change relating to the Small Business Administration’s Paycheck Protection Program. The rule change will allow certain bank directors and shareholders to apply to their banks for PPP loans for their small businesses. The rule change is effective immediately and will remain effective while the PPP is active. Release.
SBA and US Treasury Release PPP Loan Forgiveness Application and Related Guidelines
On May 15, the Small Business Administration (SBA) and the Department of the Treasury (USDT) released the Paycheck Protection Program (PPP) Loan Forgiveness Application and instructions for the application. The form and accompanying instructions include measures intended to reduce compliance burdens and simplify the application process for borrowers. Release.
FDIC Issues Proposed Rule to Address Deposit Insurance Assessment Effect on Participation in the PPP, PPP Lending Facility and MMF Liquidity Facility
On May 12, the FDIC issued a proposed rule to mitigate the deposit insurance assessment effects of participating in the PPP and the PPP and Money Market Fund Liquidity Facilities. The proposed rule would remove certain FDIC assessment impacts on banks as a result of their participation in the PPP and the lending facilities. Release.
Federal Bank Regulatory Agencies Modify Liquidity Coverage Ratio for Banks Participating in Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility
On May 5, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve, and the Office of the Comptroller of the Currency (“OCC”) announced an interim final rule to facilitate the flow of credit to households and businesses from banking organizations participating in the Federal Reserve’s Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility. The rule neutralizes the impact of the Liquidity Coverage Ratio rule associated with the funding provided by these facilities. Release. Rule.
Federal Reserve Announces its Paycheck Protection Program Liquidity Facility is Fully Operational and Available to Provide Liquidity to Eligible Financial Institutions
On April 16, the Federal Reserve announced that its Paycheck Protection Program Liquidity Facility is fully operational and available to provide liquidity to eligible financial institutions, which will help support small businesses. The Small Business Administration’s Paycheck Protection Program, or PPP, guarantees loans extended by qualified lenders to small businesses so that those businesses can keep workers employed. Release.
Federal Bank Regulators Issue Interim Final Rule for Paycheck Protection Program Facility
On April 9, the federal bank regulatory agencies today announced an interim final rule to encourage lending to small businesses through the Small Business Administration’s Paycheck Protection Program (PPP). The interim final rule modifies the agencies’ capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve’s PPP facility because there is no credit or market risk in association with PPP loans pledged to the facility. Consistent with the agencies’ current capital rules and the CARES Act requirements, the interim final rule also clarifies that a zero percent risk weight applies to loans covered by the PPP for capital purposes. The rule is effective immediately. Release.