On May 21, 2020, the U.S. Small Business Administration (“SBA”) released a notice informing lenders of how they may collect loan processing fees for eligible loans issued under the Paycheck Protection Program (“PPP”).

Pursuant to the CARES Act and the Interim Rule, issued by the SBA on April 2, 2020, the SBA will pay fees to lenders for processing eligible PPP loans at the following rates, based on the balance of the loan outstanding at the time of full disbursement:

  • 5% for loans under $350,000;
  • 3% for loans between $350,000 and $2 million; and
  • 1% for loans over $2 million.

However, in order to collect the processing fee on a PPP loan, a lender must first report to the SBA that a loan has been fully disbursed using SBA Form 1502.  The SBA will begin accepting these reports on fully disbursed PPP loans on May 22, 2020.  Once the report is received, the SBA will initiate the process of paying the PPP processing fee for which the lender is eligible.


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On April 9, 2020, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and the Office of the Comptroller of the Currency (collectively, the “federal banking agencies”) issued an interim rule that permits banks to neutralize the regulatory capital effects of participating in the Federal Reserve’s Paycheck Protection Program Lending Facility (the “PPPL Facility”).

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CalculatorOn April 6, 2020, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System (collectively, the “federal banking agencies”) announced the issuance of two interim final rules to provide temporary relief to community banks.  The federal banking agencies acted to implement Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which requires the federal banking agencies to temporarily lower the community bank leverage ratio (“CBLR”) to eight percent (8%).

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On March 24, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued a statement on its supervisory activities (“Statement”) during the unprecedented COVID-19 pandemic.  As part of that Statement, the Federal Reserve indicated that “to minimize disruption and burden on financial institutions, the Federal Reserve is reducing its focus on examinations and inspections at this time.”  In its effort to minimize the regulatory burdens placed on financial institutions, the Federal Reserve made the following pronouncements:


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On March 14, 2020, the U.S. House of Representatives, with the support of the President, overwhelmingly approved a bill known as the Families First Coronavirus Response Act (H.R. 6201).  The legislation is scheduled to be taken up by the U.S. Senate during the week of March 16th, and is expected to be signed into law promptly by the President once the legislation is finalized.

This bulletin focuses on those aspects of the legislation approved by the House that address (1) emergency paid sick leave and paid leave under the Family and Medical Leave Act (“FMLA”) and (2) zero cost coverage for COVID-19 testing.

Important Note: Changes may be made to the legislation approved by the House before it is signed into law, as a technical correction bill is expected in the House, and the Senate has indicated that it may make changes.  This bulletin summarizes the provisions of the bill initially approved by the House on March 14th.

Employer Provided Paid Sick Leave

The legislation affects private employers employing fewer than 500 employees and government employers (“Covered Employers”), and provides for (1) two weeks of emergency paid sick leave and (2) additional paid sick leave under the FMLA.  Private employers employing 500 or more employees are not Covered Employers and the legislation does not require such employers to provide paid sick leave to their employees.


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