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Dear Community Banker:
There are many late-breaking developments from the Treasury Department and Small Business Administration on the Paycheck Protection Program, and we want you to be fully up to speed.
After ICBA expressed serious concerns yesterday, Treasury and SBA just issued an interim final rule on the Paycheck Protection Program. According to the new rule, the agencies increased the PPP interest rate to 1 percent from 0.5 percent and have provided additional clarity on lender due diligence responsibilities.
These updates are reflected in the information pages and borrower application posted to Treasury's landing page. The lender agreement and lender application for guarantee forms have not yet been released but are expected soon, so continue checking back to that page for additional information and resources.
The update follows yesterday's ICBA letter expressing concerns that the interest rate is below break-even for community banks, the two-year loan terms are unreasonably short, guidelines on the use of loan proceeds are excessively restrictive, and the lack of detailed guidance shifts too much liability to the lender.
In a press conference this evening with President Trump, Treasury Secretary Mnuchin said this program will go live tomorrow. While ICBA combs through this new rule, rest assured we hear your concerns about this new program and its rollout loud and clear—and we still have a seat at the table here in Washington to shape this program so it works for you and your customers. Meanwhile, we encourage all community bankers interested in participating in this program to work with current and potential customers as you see fit.
We understand this emergency program remains unclear at this late hour, and there are many outstanding questions and concerns. ICBA is with you, will keep you informed of the latest developments, and is working on your behalf just as you are working on behalf of your communities.
Thank you again for your continued commitment to your communities as we persevere through this challenging time.