April 16, 2020

PPP Funds Exhausted; SBA No Longer Accepting Loan Applications

The $349 billion authorized for Paycheck Protection Program loans has been exhausted, the Small Business Administration said today, and the SBA is no longer accepting applications for PPP loans. Loan applications received by banks but not yet submitted to SBA will not be able to be completed, and the agency will not maintain a queue for PPP applications once additional funds are authorized. Any loan applications that have received an SBA authorization number will receive an SBA guaranty.
MBA and the American Bankers Association are strongly advocating for Congress immediately to authorize new PPP funding to meet the payroll needs of small businesses struggling during the coronavirus pandemic. Bankers and their small business customers can contact their lawmakers at 202-224-3121 to emphasize that more funding is needed right away.

Fed’s Paycheck Protection Program Facility Is Up And Running

The Federal Reserve announced today that its Paycheck Protection Program Liquidity Facility is fully operational and available for institutions to use. Through the facility, the Fed will extend non-recourse loans to institutions eligible to make PPP loans. PPP loans guaranteed by the SBA that are originated by eligible banks may be pledged as collateral to the Federal Reserve Banks.

The Small Business Administration's Paycheck Protection Program guarantees loans extended by qualified lenders to small businesses so that those businesses can keep workers employed. The Federal Reserve's facility will support the effectiveness of the PPP by extending credit to financial institutions that make PPP loans, using such loans as collateral. Supplying financial institutions with additional liquidity will help increase their capacity to make PPP loans.

Information about PPPLF, including term sheet, borrowing documentation and operational documentation, is available here.

St. Louis Fed To Host Call On Paycheck Protection Program Facility

The Federal Reserve Bank of St. Louis will host a teleconference tomorrow from 11:30 a.m. to noon to discuss the Paycheck Protection Program Liquidity Facility. Federal Reserve Bank of St. Louis Economist Bill Emmons, St. Louis Fed General Counsel Francois Henriquez and Vice President Jim Fuchs will lead discussions during the call.

To participate, call 1-888-625-5230 and enter participant code 754 730 45#. You may want to add the invitation to your calendar. To submit questions in advance, email conversations@stls.frb.org. Questions will be taken during the live call but questions submitted in advance will receive priority.

The call is part of the Conversations with the St. Louis Fed series. All calls will be archived as downloadable audio files on the Conversations website.

ABA, Groups Call On Congress To Shield EIPs From Garnishment

Congress should protect CARES Act economic impact payments from being garnished to pay creditors, the American Bankers Association and several other financial groups have said. “America’s banks stand ready to provide full access to funds appropriated for the explicit purpose of helping families make ends meet” in response to the coronavirus pandemic, they explained.

In a letter to congressional leaders joined by the Bank Policy Institute, the Clearing House, the Consumer Bankers Association and the Financial Services Forum, ABA emphasized that the CARES Act exempted EIPs, which are currently being processed, from offsets for debts to government agencies (except for child support) but not from court-ordered garnishments to pay creditors.

“As a result, banks are obligated to treat them accordingly, which will impose a significant burden for some families facing unprecedented circumstances,” the groups said. “We believe it is imperative that Congress make it clear that these payments are treated as benefits subject to the federal exemption from garnishment.” The groups added that direct deposit payments are easier to protect from garnishment than paper checks.

FAQs Address Consumers' Questions On Economic Impact Payments; Check Payments To Follow Direct Deposits

As previously shared, the IRS has launched an online tool that enables consumers who have previously filed a tax return to check the status of their economic impact payment. Using the Get My Payment tool available at IRS.gov, consumers can see the date their payment is scheduled to be deposited in their bank accounts or mailed to them and provide their bank account information to receive direct deposit if it is not currently on file with the IRS.

Recipients will be mailed a check if the IRS does not have your information on file. Check payments will follow weeks or possibly months after the direct deposits are sent. The American Bankers Association has published FAQs to share with bank customers about Economic Impact Payments.

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