New legislation introduced by Sen. Mike Lee (R-Utah) is designed to protect borrowers and lenders from regulatory penalties associated with the Paycheck Protection Program after ICBA raised the issue with policymakers.
The Protections for Good Faith PPP Borrowers and Lenders Act (S. 4875) would remove PPP loans from asset calculations to prevent lenders from crossing asset-size thresholds and incurring additional regulatory burdens. It also would protect lenders from various penalties and enforcement actions and remove PPP loans from the CFPB's purview.
The Senate bill follows the release of ICBA-advocated House legislation directing regulators to exclude PPP loan balances from bank and bank holding company regulatory thresholds within 30 days. That bill—the Preventing Regulatory Penalties for PPP Lenders Act (H.R. 8675) from Reps. Barry Loudermilk (R-Ga.) and David Scott (D-Ga.)—applies to community banks with $15 billion or less in total assets.
Additionally, the FDIC last week released an interim final rule that allows community banks to use their 2019 asset sizes for 2021 auditing and reporting requirements under Part 363, which will help up to 290 community banks avoid new regulatory costs caused by PPP lending.
In a letter to Loudermilk responding to calls for agencies to act on the issue, Comptroller of the Currency Brian Brooks cited his support for the FDIC rule as a member of the board and said the agencies are working to address other regulatory thresholds not covered by the Part 363 rule.
ICBA has repeatedly told Congress and federal regulators that the surge of PPP loans has swelled the balance sheets of community banks, inadvertently subjecting them to additional supervision, regulations, and costs.
