Loans – Auto forgiveness of PPP loans less expensive for govt, lenders | 2020-11-23
CUNA joined greater than 100 consumer-focused organizations to name on Congressional management to rapidly move Paycheck Safety Program (PPP) forgiveness.
“Bipartisan and bicameral legislation introduced earlier this Congress and would reduce compliance costs by streamlining the forgiveness process for mom-and-pop businesses who received PPP loans during these unprecedented times,” the letter reads. “Additionally, passing such legislation that would expand the hold harmless protections for lenders will provide financial institutions that originated and currently service PPP loans the opportunity to focus their time and energy on providing much-needed credit and financial services to individuals and businesses by creating regulatory certainty for PPP loans in the future.”
The Paycheck Safety Program Small Enterprise Forgiveness Act (S. 4117) is sponsored by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.).The Home model, H.R. 7777, is sponsored by Reps. Chrissy Houlahan (D-Pa.) and Fred Upton (R-Mich.).
The letter cites an impartial evaluation displaying an efficient value of $2,000-$4,000 for every enterprise that applies for forgiveness, requiring 20-100 hours of centered time from key leaders of those companies.
“With an average loan size of less than $19,000 for the smallest 60% of loans, this estimate would represent 10-20% of the loan amount itself, which is otherwise intended to support payroll, rent, and other obligations necessary to keep businesses alive and ready to restart,” the letter reads.
CUNA has made quite a few calls to Congress to incorporate PPP forgiveness laws in any upcoming reduction package deal, together with a letter from all state credit score union Leagues, and signed onto an analogous letter in September.