CFPB issues guidance to small business PPP loan applicants, including timelines related to loans

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The Consumer Financial Protection Bureau issued responses this week to frequently asked questions from small businesses that have applied for SBA Paycheck Protection Program loans, including clarification regarding timelines related to the completion of loans.

Where a creditor has submitted a PPP loan application, the 30-day timeline to notify the applicant of the action taken on a completed application under Regulation B does not begin until a creditor has received a loan number from the SBA or a response about the availability of funds, according to the guidance.

The guidance also states that:

  • creditors must provide adverse action notifications within 30 days after denying a PPP application;
  • when an application is missing information, but provides sufficient data for a credit decision, the creditor may evaluate the application, make its credit decision and notify the applicant;
  • if credit is denied, the applicant must be given the specific reasons for the credit denial (or notice of the right to receive the reasons);
  • an application may be denied for incompleteness only if an application is incomplete regarding information that the applicant can provide and the creditor lacks sufficient data for a credit decision;
  • if an application is incomplete regarding matters that an applicant can complete, a creditor has the option of providing a notice of incompleteness under section 1002.9(c)(1)(ii); and
  • if a creditor has not received a loan number or a response about the availability of funds from the SBA, but the PPP application is otherwise complete, the creditor cannot deny the application based on incompleteness or provide a notice of incompleteness because a loan number or response from the SBA is not information that an applicant can provide to the creditor.

The FAQs can be accessed on CFPB’s website.

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