Title: Business Borrowers Protection Act
Policy area: Commerce

Summary:
Business Borrowers Protection Act
This bill prohibits a lender from requiring a borrower to repay on an accelerated basis any loan received under a governmental program responding to COVID-19 (i.e., coronavirus disease 2019). Further, a lender may not consider such a loan for purposes of determining whether the lender has the right to accelerate the due date of any loan agreement.
In addition, until two years after the termination of the COVID-19 national emergency, the bill (1) declares it to be U.S. policy that lenders should not accelerate due dates for any business loans or curtail any lines of credit, and (2) releases from liability a trustee that decides not to enforce a loan covenant that accelerates repayment under a loan agreement or reduces the availability of funds under a line of credit.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6549 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6549

 To prevent the acceleration of the due date of business loans during 
        the COVID-19 national emergency, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 17, 2020

 Mr. Sherman introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To prevent the acceleration of the due date of business loans during 
        the COVID-19 national emergency, 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 ``Business Borrowers Protection Act''.

SEC. 2. CONSTRUCTION OF LOAN COVENANTS.

    In determining whether any borrower is in violation of any loan 
covenant or is required to repay a loan on an accelerated basis, any 
loan received under any governmental program to deal with the COVID-19 
virus shall be excluded. Any loan received from any governmental entity 
under any program to deal with the COVID-19 virus shall not be taken 
into account in determining the debts or liabilities of the borrower 
for purposes of determining whether the borrower is in conformity with 
any loan agreement, or whether the lender has the right to accelerate 
the due date of any loan agreement.

SEC. 3. LOAN COVENANT EFORCEMENT NOT REQUIRED.

    From the date of enactment until the date two years after the 
termination of the national emergency declared by the President on 
March 13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et 
seq.) it is the policy of the United States that lenders should not 
accelerate the due date of any business loan or curtail any line of 
credit. Federal regulatory entities shall adopt policies or regulations 
so that no lender is held to be in violation of any regulation due to 
the lender's adherence to the policy set forth in the preceding 
sentence.

SEC. 4. TRUSTEES NOT REQUIRED TO ENFORCE LOAN COVENANTS.

    From the date of enactment until the date two years after the 
termination of the national emergency declared by the President on 
March 13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et 
seq.) no trustee or other person with a fiduciary duty to the holders 
of any debt security shall be liable for any decision made not to 
enforce a loan covenant.

SEC. 5. DEFINITIONS.

    (a) Governmental Program To Deal With the COVID-19 Virus.--The term 
``governmental program to deal with the COVID-19 virus'' means any 
program created by the Coronavirus Preparedness and Response 
Supplemental Appropriations Act, 2020 (Public Law 116-123), the 
Families First Coronavirus Response Act (Public Law 116-127), or the 
Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136) 
and any program established by the Federal Government or any State, 
local, tribal, or territorial government for the purpose of reducing 
the economic dislocation caused by the spread of COVID-19.
    (b) Loan Covenant.--The term ``loan covenant'' means any provision 
which allows or requires the acceleration of repayments due under any 
loan agreement, or which reduces the availability of funds under a line 
of credit, due to any act or omission of the borrower or any entity 
related to the borrower. ``Loan covenant'' includes any provision which 
accelerates repayment under a loan, or reduces the amount that may be 
borrowed under a line of credit, because the borrower's total 
liabilities or current liabilities exceed any benchmark, or any 
percentage of the borrower's assets, revenues, equity, or other 
benchmark.
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