Title: Protections for Good Faith PPP Borrowers and Lenders Act
Policy area: Finance and Financial Sector

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4875 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 4875

 To provide protections for good faith borrowers and lenders under the 
          paycheck protection program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             October 26 (legislative day, October 19), 2020

    Mr. Lee introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To provide protections for good faith borrowers and lenders under the 
          paycheck protection program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protections for Good Faith PPP 
Borrowers and Lenders Act''.

SEC. 2. HOLDING HARMLESS GOOD FAITH BORROWERS AND LENDERS.

    Section 1106 of the CARES Act (15 U.S.C. 9005) is amended--
            (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 
                        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.''; 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)).''.

SEC. 3. EXCLUSION OF PPP LOANS FROM THE CALCULATION OF LENDING 
              INSTITUTION ASSETS.

    (a) Definitions.--In this section--
            (1) 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);
            (2) the term ``credit union'' includes--
                    (A) an insured credit union, as that term is 
                defined in section 101 of the Federal Credit Union Act 
                (12 U.S.C. 1752); and
                    (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); and
            (3) the term ``lending institution'' includes a bank, a 
        bank holding company, and a credit union.
    (b) 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--
            (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)); and
            (4) any regulation promulgated under a section described in 
        paragraph (1), (2), or (3).

SEC. 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)); or
            (2) levy fees or fines against a lender due to any action 
        of the lender under the program described in paragraph (1).
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