Removing Barriers Blog

Letter sent prior to hearing on Title I of the CARES Act
Posted June 11, 2020 by CUNA Advocacy

CUNA wrote to the Senate Small Business Committee prior to their hearing on Title I of the Cares Act -- which includes PPP language.  Credit unions are a vital component to the delivery of financial services to many Americans and credit union members should have equal access to the Paycheck Protection Program (PPP).

Although the pace of PPP lending has slowed, CUNA notes operational challenges remain and should be addressed if additional funding is provided. These include:

  • Lack of support from the SBA to provide timely feedback on issues
  • Lack of updating guidance and forms to reflect privately insured state-chartered credit unions are eligible to be PPP lenders;
  • Lender prioritization guidance;
  • Official guidance formalizing the use of SBA forms; and
  • Lack of guidance on the purchasing process of loans.

The letter also calls for Congressional action to relieve borrowers that carried out the PPP in good faith from any liability stemming from the structure and design of the PPP, as well as clarity on loan forgiveness, as the recently published loan forgiveness application is overly complex.

“The complexity of the forgiveness process presents an even greater challenge for small business as they have fewer resources to deploy on an overly complex application process. Moreover, feedback from our members indicates that the forms will likely require help from outside accountants and even attorneys for most businesses,” the letter reads. “This is an expense many of the smallest businesses cannot afford. Creating an overly complex forgiveness process would seem to be the antithesis to the spirit of a program designed to rapidly deploy resources to small business especially when the expectation is that the funds appropriated to PPP were never expected to be repaid.”

CUNA recommends Treasury and the SBA simplify the forgiveness application process for loans under $350,000, and should consider “making forgiveness of these loans automatic or require a simply good faith certification that the funds were spent on forgivable expenses.”

CUNA also included in its letter to the committee a copy of its May 15 letter to SBA Administrator Jovita Carranza and a May 29 letter to Carranza and Treasury Secretary Steven Mnuchin.