The interim final rule applies to all loans under the PPP.
On May 22, 2020, the United States Department of the Treasury and the U.S. Small Business Administration (SBA) released new guidance concerning the federal government’s Paycheck Protection Program (PPP) implemented under the CARES Act. The interim final rule sets forth responsibilities for both borrowers and lenders with respect to loan forgiveness review procedures and other matters. The interim final rule applies to all loans under the PPP, and, importantly, states that audits may be exercised in the SBA’s sole discretion, regardless of loan amount.
The interim final rule further provides:
- That lenders must issue a loan forgiveness decision to the SBA within 60 days of receiving an application;
- A list of the documents and information a lender must submit to the SBA when approving or denying an application or when submitting loan forgiveness materials;
- An explanation of a borrower’s right to request an SBA review of the lender’s decision, and the proper procedures for submitting decisions and review requests;
- That, with respect to a Loan Forgiveness Application, lenders must confirm receipt of the various borrower certifications and confirm the borrower’s calculations following a “good faith review”;
- A specification of the various documents a lender must provide to the SBA during its review of a borrower’s PPP loan;
- That lenders are not permitted to approve any applications from a borrower during an SBA review of other loans to that borrower;
- That if the SBA determines a borrower was not eligible for a loan under the PPP, its lender cannot recover a processing fee and the SBA may “claw back” any paid processing fees if a lender has not fulfilled its obligations under the applicable rule.
For a more robust analysis of the responsibilities and obligations imposed on lenders pursuant to the interim final rule, as well as a review and summary of those imposed on borrowers, please see our May 26, 2020, Alert.
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