In a comment letter filed Monday, WBA stated support for FRB’s latest interim final rule which extends an exception for PPP loans from the requirements of the Federal Reserve Act and the corresponding provisions of Regulation O. WBA first filed support of an initial exception back in April when FRB moved to except PPP loans made on or before June 30, 2020, the initial sunset date of the loan program under the CARES Act. As the Prioritized Paycheck Protection Program Act extended SBA’s loan program to August 8, 2020, FRB extended its initial Regulation O exception for PPP loans to the loan program’s new sunset date of August 8, 2020.
WBA stated support for FRB’s actions as it would provide clarity that PPP loans made by a bank to insider-owned businesses between July 1, 2020 and August 8, 2020, are also excepted from the requirements mentioned above. Without an extension of the exception, WBA stated concern that some auditors and examiners would treat such loans differently than PPP loans made on or before June 30, 2020.
The removal of Regulation O obstacles through the exception has helped allow Wisconsin’s banks to more efficiently address the needs of their insider-owned small businesses. The exception has also helped ensure eligible businesses have timely access to liquidity to help overcome economic hurdles resulting from the effects of COVID-19 and the mitigating efforts in effect throughout Wisconsin.
The letter may be viewed by clicking here.