Deal on PPP extension

This afternoon, Senate leaders announced a deal on a nearly $500 billion relief package that includes a set-aside for Community Financial Institutions, including CDFIs.

The legislation would provide an additional $10 billion for the Emergency Economic Injury Disaster Grants, $50 billion for the SBA Disaster Loans Program, and $321 billion in additional aid for small businesses through the PPP program.

The additional PPP funds include several new set-asides:

• $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion; and
• $30 billion for loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion.

“Community Financial Institutions” includes CDFIs under section 103 of Riegle Act, minority depository institutions defined under 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; an SBA Title V Development Company; an SBA micro loan intermediary; a state or federal credit union defined under section 101 of Federal Credit Union Act.

However, the bill does not deem CDFIs as additional lenders.  More work will be needed with Treasury to amend the PPP interim rule issued on April 3 to facilitate greater CDFI participation in PPP.

The legislation also includes $75 billion in additional funds for hospitals, $25 billion for COVID-19 testing (see attached summary), and $2.1 billion more for salaries and expenses at SBA.

The package is expected to pass by unanimous consent this afternoon when the Senate convenes at 4pm. The House is likely to take up and pass the package by Thursday.