New National Credit Union Administration Rule on PPP Loans
We have been monitoring the evolving rules and regulations affecting credit unions in connection with the COVID-19 pandemic response. NCUA recently issued an Interim Final Rule regarding the treatment of loans made by credit unions under the SBA’s Paycheck Protection Program (PPP), which was created as part of the stimulus relief under the CARES Act.
In accordance with the Interim Final Rule, because of the guaranty provided by the SBA with regard to the PPP loans, the NCUA considers these loans to be low-risk to credit unions. The Interim Final Rule therefore provides that credit unions participating in the program and extending these loans to members will be able to exclude the amounts of these loans for purposes of calculating their net worth ratio.
Click on the link for NCUA’s letter to credit unions addressing the Interim Final Rule.