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On July 15, 2020, the Federal Reserve Bank of Boston issued new guidance expressly permitting tribal businesses that are borrowers under the Main Street Lending Program (“MSLP”) to pay dividends to their tribal government owners.  In its amended Frequently Asked Questions (the “July 15th FAQs”), available here, the Federal Reserve announced that the Treasury Secretary exercised his authority under the CARES Act to waive the prohibition against the payment of dividends in the MSLP, permitting tribal businesses that are wholly or majority-owned by one or more tribal governments to make distributions to their tribal government owners.  See July 15th FAQ H.15 and H.2.  Tribal businesses and organizations seeking financial relief and Lenders seeking to extend credit under the MSLP have advocated for this important clarification so that tribal businesses may gain access to much-needed capital during the economic strain of the COVID-19 pandemic.  For example, Sheppard Mullin sought this important clarification with respect to tribal distributions in comments it submitted to the Federal Reserve on April 16, 2020.
Continue Reading Federal Reserve Clarifies that Distributions to Tribal Governments are Permitted Under the Main Street Lending Program

Below please find a link to a newly-updated version of the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
Continue Reading Paycheck Protection Program: Updated Loan Forgiveness Estimator Workbook

On July 4, 2020, President Trump signed into law a bill passed by the U.S. Congress that extends the application deadline for the Paycheck Protection Program (PPP)[1] from June 30, 2020 to August 8, 2020.  The extension of the PPP application deadline comes on the heels of the latest PPP report issued by the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) stating that, as of June 30, 2020, approximately $131 billion of the allocated $670 billion remains unspent.  In their report the SBA and Treasury added that, as of June 30, 2020, the average PPP loan size was $107,000, and that the PPP has supported approximately 51 million jobs, or roughly 84% of all employees working at small businesses.
Continue Reading PPP Updates: Extension of the Application Deadline, Disclosure of PPP Borrowers Receiving Greater than $150,000 in PPP Loans, and the “Owner-Employee” Dilemma

The $600 billion Main Street Loan program has been highly anticipated to provide financial support in the form of loans to small and medium-sized U.S. businesses affected by the COVID-19 pandemic. The Federal Reserve Bank of Boston that is administering the Main Street Loan program has released term sheets and various other program documents for the three types of loans, “New,” “Priority” and “Expanded,” as well as over 70 pages of Frequently Asked Questions (FAQs). As a result, the contours of the Main Street Loan program are now substantially settled[1] as the Fed announced publicly on Monday, July 6, that the Main Street Lending Program is now fully operational and ready to purchase participations in eligible loans that are submitted to the program by registered lenders (Eligible Lenders).
Continue Reading Interplay of Main Street Lending Program Documents (the Rights and Role of the Main Street SPV)

On June 16, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) published an updated Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program (PPP)[1] to conform with the changes to the PPP pursuant to the Paycheck Protection Program Flexibility Act (PPPFA).  The Loan Forgiveness Application is composed of a loan forgiveness calculation form, a related Schedule A worksheet, a representations and certifications form, and an optional PPP borrower demographic information form.  The application is further supplemented by a Loan Forgiveness Application Instructions for Borrowers sheet
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Continue Reading Updates to the PPP Loan Forgiveness Application Form

[Update: This is an updated version of an article published on June 5, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The PPP Flexibility Act has been further supplemented by the (i) Joint Statement, issued on June 8, 2020 by U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza (the Joint Statement) and (ii) Seventeenth Interim Final Rule[1], issued by the SBA on June 11, 2020.
Continue Reading [UPDATED] Paycheck Protection Program Flexibility Act: Major Changes to the PPP

On June 8, 2020, the Federal Reserve Bank of Boston, the administrator of the Federal Reserve’s Main Street Lending Program, released updated term sheets for the three types of loans, “New,” “Priority” and “Expanded,” that will be available under Main Street as well as an updated extensive Frequently Asked Questions (FAQ) (https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm). The Main Street Lending Program is a $600 billion loan program to provide support to small and medium-sized businesses established, with the approval of the Treasury Secretary, by the Federal Reserve using its emergency authority under Section 13(3) of the Federal Reserve Act, with $75 billion in equity provided by the Treasury Department under the $454 billion appropriation of Section 4003(b)(4) of Title IV of the Cares Act.
Continue Reading Fed Provides Further Updates to Main Street Lending Program, Expanding Availability in Advance of Program Launch

UPDATE (June 22, 2020): COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020”, last Thursday the bill failed in Assembly.  Many mortgage loan market participants breathed a sigh of relief as the bill would have enacted sweeping new forbearance standards beyond federal CARES Act mandates for residential and multifamily mortgages.

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A proposed piece of COVID-19 relief legislation could have major implications for California lenders and servicers, particularly in the mortgage lending industry, if passed into law. The assembly bill, entitled “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020,” (“AB 2501”) is intended to provide relief to residential and multifamily mortgage borrowers, as well as borrowers under loans secured by a mobile home or motor vehicle, by requiring the loan servicers to provide forbearance to borrowers experiencing a financial hardship during the Covid-19 emergency.   It is also notable that borrowers under certain payday loans, known as deferred deposit transactions, would also benefit from AB 2501 although the specified relief is not forbearance but fee restrictions and a requirement for payment plan options in accordance with specified procedures.
Continue Reading AB 2501 – COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020

[Update: An updated version of this article was published on June 12, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act). …
Continue Reading Paycheck Protection Program Flexibility Act: Major Changes to the PPP

*This post was updated on July 10, 2020.

Below please find a link to the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
Continue Reading Paycheck Protection Program: Loan Forgiveness Estimator Workbook