The Senate last night unanimously passed a bipartisan bill that would provide greater flexibility for Paycheck Protection Program borrowers. Having cleared the House last week, the Paycheck Protection Program Flexibility Act now goes to the president to be signed.
The bill extends the maturity period for unforgiven PPP loans made after the date of enactment to five years; the maturity on previous PPP loans is not automatically extended but may be extended by mutual agreement of the lender and the borrower. The bill also extends the forgiveness period for all PPP loans to 24 weeks from the date of origination.The bill would also reduce the minimum amount that businesses must devote to maintaining payroll from 75% to 60% in order to receive forgiveness. ABA and the state bankers associations continue to advocate for a more streamlined approach to loan forgiveness.
“ABA appreciates the Senate and House both approving changes to the PPP to make it more flexible for small businesses,” the association noted on Twitter. “Banks of all sizes will continue to support small businesses in need using this important financial lifeline.” FHFA Finalizes Changes to FHLB
Housing Goals [app.response.aba.com]
The Federal Housing Finance Agency yesterday finalized several changes to the housing goals for the Federal Home Loan Banks. The changes affect all FHLBs that purchase mortgages through the Acquired Member Asset Program and will be phased in over a three-year period.
Under the existing framework, FHLBs whose AMA purchases exceed $2.5 billion in a given year are subject to the housing goals. Goals performance is evaluated by comparing the proportion of an FHLB’s purchases that were affordable with the proportion originated in its district reported as affordable in Home Mortgage Disclosure Act data.
The final rule eliminates the $2.5 billion volume threshold and the retrospective evaluation using HMDA data and instead sets a single prospective mortgage purchase housing goal as a share of each FHLB’s total AMA purchases. It also establishes a process through which FHLBs could propose alternative goals to the prospective goals set in the regulation and simplifies and expands the eligibility criteria to allow government-backed loans to count for goals purposes. Read the final rule [app.response.aba.com].