Bureau Issues PPP FAQs; FHFA Extends Processing Flexibility

Outside of Consumer Financial Protection Bureau headquarters

The Consumer Financial Protection Bureau (CFPB) has issued clarifying FAQs (frequently asked questions) to support small businesses that have applied for a loan from their financial institution under the Small Business Administration’s Paycheck Protection Program (PPP).

In its FAQs, the bureau clarifies that a PPP application is only a “completed application” once the creditor has received a loan number from the SBA or a response about the availability of funds. This ensures that the time awaiting this information from the SBA does not count toward the 30-day notice requirement, and that applications will therefore not “time out” during the process.

The FAQs also make clear that if the creditor denies an application without ever sending the application to the SBA, the creditor must give notice of this adverse action within 30 days. It further clarifies that a creditor cannot deny a loan application based on incompleteness where the creditor has enough information for a credit decision but has yet to receive a loan number or response about the availability of funds from the SBA.

FHFA Extends Loan Processing Flexibilities
The Federal Housing Finance Agency (FHFA) is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac designed to help borrowers during the COVID-19 national emergency.

Those flexibilities are extended until at least June 30 and include: alternative appraisals on purchase and rate term refinance loans; alternative methods for verifying employment before loan closing; flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation disbursements (draws); and expanding the use of power of attorney and remote online notarizations to assist with loan closings.

Webinar Series on Operational Risks
Credit unions are invited to join PolicyWorks — the California and Nevada Credit Union Leagues’ compliance services provider and partner — for an upcoming complimentary webinar series on "Pandemic: How to Mitigate 3 Common Operational Risks".

Each webinar in this three-part series — held May 14th, 18th and 21st — will focus on common topics due to the enhanced risk from COVID-19. PolicyWorks will examine three areas where credit unions are experiencing vulnerabilities: branch security risks, elder financial exploitation, and cross training.

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