1. Short title
This Act may be cited as the “Protections for Good Faith PPP Borrowers and Lenders Act”.
Protections for Good Faith PPP Borrowers and Lenders Act
A BILL
To provide protections for good faith borrowers and lenders under the paycheck protection program, and for other purposes.
2. Holding harmless good faith borrowers and lenders
Section 1106 of the CARES Act (15 U.S.C. 9005) is amended—
by striking subsection (h) and inserting the following:
“(h) Hold harmless
“(1) In general—A lender may rely on all certifications and documentation submitted by an applicant or eligible recipient pursuant to any requirement in statute regarding covered loans, or rules or guidance promulgated to carry out any action relating to covered loans, from an applicant or eligible recipient attesting that the applicant or eligible recipient has accurately verified all documentation provided to the lender.
“(2) No enforcement action—With respect to a lender that relies on the certifications and documentation described in paragraph (1)—
“(A) no enforcement or other action may be taken against the lender relating to loan origination, forgiveness, or guarantee based on such reliance, including claims under—
“(i) the Small Business Act (15 U.S.C. 631 et seq.);
“(ii) sections 3729 through 3733 of title 31, United States Code (commonly known as the “False Claims Act”);
“(iii) the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Public Law 101–73; 101 Stat. 183);
“(iv) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b), chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.), and subchapter II of chapter 53 of title 31, United States Code (collectively known as the “Bank Secrecy Act”); or
“(v) any other Federal, State, or other criminal or civil law or regulation; and
“(B) the lender shall not be subject to any penalties relating to loan origination, forgiveness, or guarantee based on such reliance.”
by adding at the end the following:
“(n) Enforcement action against borrowers—An eligible recipient of a covered loan may only be subject to an enforcement action or penalty relating to loan origination, forgiveness, or guarantee of the covered loan if the eligible recipient commits fraud or expends covered loan proceeds on expenses that are not allowable under section 7(a)(36)(F) of the Small Business Act (15 U.S.C. 636(a)(36)(F)).”
3. Exclusion of PPP loans from the calculation of lending institution assets
Definitions— In this section—
the terms bank and bank holding company have the meanings given those terms in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841);
the term credit union includes—
an insured credit union, as that term is defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752); and
any credit union that is eligible to make application to become an insured credit union pursuant to section 201 of the Federal Credit Union Act (12 U.S.C. 1781); and
the term lending institution includes a bank, a bank holding company, and a credit union.
Prohibition— No loan made under section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) may be included in any asset threshold calculation for any lending institution, including a threshold described in—
section 10(d)(4)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4)(A));
section 809 of the Community Reinvestment Act of 1977 (12 U.S.C. 2908);
section 13(h)(1)(B)(i) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(1)(B)(i)); and
any regulation promulgated under a section described in paragraph (1), (2), or (3).
4. Prohibition on CFPB oversight of lending institutions participating in the PPP
The Bureau of Consumer Financial Protection shall not have the authority to—
assess, audit, review, or examine any part of the participation of a lender in the program established under section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)); or
levy fees or fines against a lender due to any action of the lender under the program described in paragraph (1).