PPP Lenders: Be Ready to Apply Monday; Funds Will Go Fast

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Paycheck Protection Program (PPP) loan applications will be accepted at 7:30 a.m. (Pacific) this Monday, according to a statement by Treasury Department Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza.

Credit unions that are PPP lenders should be ready to apply for this new round of funding as President Donald Trump signed the latest congressional funding package this morning.

This round of funding — facilitated by the U.S. Small Business Administration (SBA) — includes $30 billion for community-based lenders under $10 billion in assets to issue PPP loans, and a second tranche of $30 billion for lenders under $50 billion in assets. The remaining $250 billion is for all lenders.

It is expected these funds will go fast. Click here to view the joint statement.

PPP and Large Companies
The Treasury Department has published guidance intended to stop federal Paycheck Protection Program (PPP) loans from going to large companies. The Treasury says it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith that its PPP loan request is necessary. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.

See the updated Treasury PPP FAQs, new question No. 31.

FRB Deletes Reg D Six-Transfer Limit
This morning the Federal Reserve Board announced an interim final rule (IFR) to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the “savings deposit” definition.

The interim final rule allows depository institutions to immediately suspend enforcement of the six-transfer limit and allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the Coronavirus pandemic have made such access more urgent. There are no mandatory changes to deposit reporting associated with the amendments. The IFR includes several FAQs to consider as well. You can read the announcement here.

This change would not have happened without the Leagues/CUNA letter that was sent by Rep. Brad Sherman (D-CA) to the Federal Reserve Board on April 8. Sherman, as chairman of the House Subcommittee on Capital Markets, petitioned the FRB at the request of the California and Nevada Credit Union Leagues. The Leagues thank him again for his leadership on this issue.

CUs Continue Stepping Up for Members
From late March to today, more than 432,000 credit union members have been provided financial relief; nearly 429,000 extensions made on $10.8 billion in loans; and $37.6 million provided in emergency loans, according to weekly survey data collected by the Leagues.

While credit union data in both states is still being gathered every week, the Leagues' ongoing COVID-19 Impact Survey continues to track how credit unions are assisting consumers during the economic fallout from the Coronavirus pandemic and which ones are participating in the SBA’s Paycheck Protection Program (PPP).

The data represents a great majority of credit unions in California and Nevada, but not all. The Leagues are encouraging credit unions every Monday to complete the survey by sending CEOs a link. The numbers continue helping the Leagues tell a powerful, compelling story about the impact credit unions are making in their communities.

Webinar Series: Economy and Balance Sheets
CUNA Mutual is co-hosting a two-part webinar series entitled “The COVID-19 Recession and its Impact on Credit Unions”, with the second part airing on Thursday, April 30. The first webinar this past week gave credit unions insight into how the Coronavirus pandemic will impact the economy, financial sector, labor market, interest rates, and balance sheets. The upcoming second webinar will give practical guidance to help credit unions control their balance sheets, manage income statements, and minimize losses.

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