Protections for Good Faith PPP Borrowers and Lenders Act

To provide protections for good faith borrowers and lenders under the paycheck protection program, and for other purposes. 1. Short title This Act may be cited as the Protections for Good Faith PPP Borrowers and Lenders Act 2. Holding harmless good faith borrowers and lenders Section 1106 of the CARES Act ( 15 U.S.C. 9005 (1) 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 (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 (iv) section 21 of the Federal Deposit Insurance Act ( 12 U.S.C. 1829b Public Law 91–508 12 U.S.C. 1951 chapter 53 Bank Secrecy Act (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. ; and (2) 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 (a) Definitions In this section— (1) the terms bank bank holding company 12 U.S.C. 1841 (2) the term credit union (A) an insured credit union, as that term is defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 (B) 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 (3) the term lending institution (b) Prohibition No loan made under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) (1) section 10(d)(4)(A) of the Federal Deposit Insurance Act ( 12 U.S.C. 1820(d)(4)(A) (2) section 809 of the Community Reinvestment Act of 1977 ( 12 U.S.C. 2908 (3) section 13(h)(1)(B)(i) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1851(h)(1)(B)(i) (4) 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— (1) 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) (2) levy fees or fines against a lender due to any action of the lender under the program described in paragraph (1).

Summary: Protections for Good Faith PPP Borrowers and Lenders Act This bill revises certain provisions of the Paycheck Protection Program established to support small businesses in response to the COVID-19 (i.e., coronavirus disease 2019) pandemic. The bill expands lender protections against enforcement actions based on the lender's reliance on certifications or documentation submitted by a loan applicant or recipient. Lenders are shielded from such enforcement actions brought under any federal, state, or other criminal or civil law or regulation. Borrowers under the program are only subject to a related enforcement action or penalty if the borrower commits fraud or makes certain prohibited expenses with loan proceeds. Loans under the program must be excluded from an asset threshold calculation made by a lending institution. The Consumer Financial Protection Bureau is prohibited from exercising oversight authority over any lender regarding their participation in the program.