Business Loan Program Temporary Changes; Paycheck Protection Program — Requirements — Corporate Groups and Non-Bank and Non-Insured Depository Institution…

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Summary

An interim final rule issued by the U.S. Small Business Administration on Paycheck Protection Program requirements for corporate groups and non-bank lenders, published in the Federal Register of May 4, 2020 (Vol. 85, No. 86) under Docket Number SBA-2020-0023. The rule states that businesses in a single corporate group shall in no event receive more than $20,000,000 of PPP loans in the aggregate, applied to any loan not fully disbursed as of April 30, 2020. It also states that a non-bank or non-insured depository institution lender may qualify by performing any one of originating, maintaining or servicing more than $50 million in business loans or other commercial receivables in a 12-month period in the past 36 months. A $10 million threshold applies instead to community development financial institutions and to certain minority-, women- or veteran-owned lenders, using SBA Form 3507.

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26324 
Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 
regulatory flexibility analysis, when 
among other things the agency for good 
cause finds that notice and public 
procedure are impracticable, 
unnecessary, or contrary to the public 
interest. SBA Office of Advocacy guide: 
How to Comply with the Regulatory 
Flexibility Act, Ch.1. p.9. Accordingly, 
SBA is not required to conduct a 
regulatory flexibility analysis. 
Jovita Carranza, 
Administrator. 
[FR Doc. 2020–09398 Filed 5–1–20; 8:45 am] 
BILLING CODE P 
SMALL BUSINESS ADMINISTRATION 
13 CFR Part 120 
[Docket Number SBA–2020–0023] 
RIN 3245–AH39 
Business Loan Program Temporary 
Changes; Paycheck Protection 
Program—Requirements—Corporate 
Groups and Non-Bank and Non- 
Insured Depository Institution Lenders 
AGENCY: U. S. Small Business 
Administration. 
ACTION: Interim final rule. 
SUMMARY: On April 2, 2020, the U.S. 
Small Business Administration (SBA) 
posted an interim final rule announcing 
the implementation of the Coronavirus 
Aid, Relief, and Economic Security Act 
(CARES Act). The CARES Act 
temporarily adds a new program, titled 
the ‘‘Paycheck Protection Program,’’ to 
the SBA’s 7(a) Loan Program. The 
CARES Act also provides for forgiveness 
of up to the full principal amount of 
qualifying loans guaranteed under the 
Paycheck Protection Program (PPP). The 
PPP is intended to provide economic 
relief to small businesses nationwide 
adversely impacted by the Coronavirus 
Disease 2019 (COVID–19). SBA posted 
additional interim final rules on April 3, 
2020, April 14, 2020, April 24, 2020, 
and April 28, 2020, and the Department 
of the Treasury posted an additional 
interim final rule on April 28, 2020. 
This interim final rule supplements the 
previously posted interim final rules by 
limiting the amount of PPP loans that 
any single corporate group may receive 
and provides additional guidance on the 
criteria for non-bank lender 
participation in the PPP, and requests 
public comment. 
DATES: 
Effective date: This rule is effective 
May 4, 2020. 
Applicability date: This interim final 
rule applies to applications submitted 
under the Paycheck Protection Program 
through June 30, 2020, or until funds 
made available for this purpose are 
exhausted. 
Comment date: Comments must be 
received on or before June 3, 2020. 
ADDRESSES: You may submit comments, 
identified by number SBA–2020–0023 
through the Federal eRulemaking Portal: 
http://www.regulations.gov. Follow the 
instructions for submitting comments. 
SBA will post all comments on 
www.regulations.gov. If you wish to 
submit confidential business 
information (CBI) as defined in the User 
Notice at www.regulations.gov, please 
send an email to ppp-ifr@sba.gov. 
Highlight the information that you 
consider to be CBI and explain why you 
believe SBA should hold this 
information as confidential. SBA will 
review the information and make the 
final determination whether it will 
publish the information. 
FOR FURTHER INFORMATION CONTACT: A 
Call Center Representative at 833–572– 
0502, or the local SBA Field Office; the 
list of offices can be found at https://
www.sba.gov/tools/local-assistance/ 
districtoffices. 
SUPPLEMENTARY INFORMATION: 
I. Background Information 
On March 13, 2020, President Trump 
declared the ongoing Coronavirus 
Disease 2019 (COVID–19) pandemic of 
sufficient severity and magnitude to 
warrant an emergency declaration for all 
States, territories, and the District of 
Columbia. With the COVID–19 
emergency, many small businesses 
nationwide are experiencing economic 
hardship as a direct result of the 
Federal, State, tribal, and local public 
health measures that are being taken to 
minimize the public’s exposure to the 
virus. These measures, some of which 
are government-mandated, are being 
implemented nationwide and include 
the closures of restaurants, bars, and 
gyms. In addition, based on the advice 
of public health officials, other 
measures, such as keeping a safe 
distance from others or even stay-at- 
home orders, are being implemented, 
resulting in a dramatic decrease in 
economic activity as the public avoids 
malls, retail stores, and other 
businesses. 
On March 27, 2020, the President 
signed the Coronavirus Aid, Relief, and 
Economic Security Act (the CARES Act) 
(Pub. L. 116–136) to provide emergency 
assistance and health care response for 
individuals, families, and businesses 
affected by the coronavirus pandemic. 
The Small Business Administration 
(SBA) received funding and authority 
through the CARES Act to modify 
existing loan programs and establish a 
new loan program to assist small 
businesses nationwide adversely 
impacted by the COVID–19 emergency. 
Section 1102 of the CARES Act 
temporarily permits SBA to guarantee 
100 percent of 7(a) loans under a new 
program titled the ‘‘Paycheck Protection 
Program.’’ Section 1106 of the CARES 
Act provides for forgiveness of up to the 
full principal amount of qualifying 
loans guaranteed under the Paycheck 
Protection Program. On April 24, 2020, 
the President signed the Paycheck 
Protection Program and Health Care 
Enhancement Act (Pub. L. 116–139), 
which provided additional funding and 
authority for the Paycheck Protection 
Program. 
As described below, to preserve the 
limited resources available to the PPP 
program, this interim final rule limits 
the aggregate amount of PPP loans that 
any single corporate group may receive. 
This interim final rule also provides 
additional guidance regarding lenders 
eligible to make PPP loans. 
II. Comments and Immediate Effective 
Date 
The intent of the CARES Act is that 
SBA provide relief to America’s small 
businesses expeditiously. This intent, 
along with the dramatic decrease in 
economic activity nationwide, provides 
good cause for SBA to dispense with the 
30-day delayed effective date provided 
in the Administrative Procedure Act. 
Specifically, it is critical to meet 
lenders’ and borrowers’ need for clarity 
concerning program requirements as 
rapidly as possible because the last day 
eligible borrowers can apply for and 
receive a loan is June 30, 2020. 
This interim final rule supplements 
previous regulations and guidance on 
certain important, discrete issues. The 
immediate effective date of this interim 
final rule will benefit lenders so that 
they can swiftly close and disburse 
loans to small businesses. This interim 
final rule is effective without advance 
notice and public comment because 
section 1114 of the CARES Act 
authorizes SBA to issue regulations to 
implement Title I of the CARES Act 
without regard to notice requirements. 
This rule is being issued to allow for 
immediate implementation of this 
program. Although this interim final 
rule is effective immediately, comments 
are solicited from interested members of 
the public on all aspects of this interim 
final rule, including section III below. 
These comments must be submitted on 
or before June 3, 2020. SBA will 
consider these comments and the need 
for making any revisions as a result of 
these comments. 
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26325 
Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 
1 The Administrator has authority to issue ‘‘such 
rules and regulations as [the Administrator] deems 
necessary to carry out the authority vested in him 
by or pursuant to’’ 15 U.S.C. Chapter 14A, 
including authorities established under section 
1102 of the CARES Act. Section 1102 provides that 
the Administrator ‘‘may’’ guarantee loans under the 
terms and conditions set forth in section 7(a) of the 
Small Business Act, and those conditions specify a 
‘‘maximum’’—but not a minimum—loan amount. 
See 15 U.S.C. 636(a)(36)(B), (E); see also CARES Act 
section 1106(k) (authorizing SBA to issue 
regulations to govern loan forgiveness). To preserve 
finite appropriations for PPP loans and ensure 
broad access for eligible borrowers, the 
Administrator, in consultation with the Secretary, 
has determined that an aggregate limitation on 
loans to a single corporate group is necessary and 
appropriate. 
2 For loans that have been partially disbursed, 
this limitation applies to any additional 
disbursement that would cause the total PPP loans 
to a single corporate group to exceed $20 million. 
3 See Section 7(a)(36)(D)(iv) of the Small Business 
Act (15 U.S.C. 636(a)(36)(D)(iv), as added by the 
CARES Act; 13 CFR 121.103(b). 
III. Paycheck Protection Program 
Requirements for Corporate Groups 
and Non-Bank and Non-Insured 
Depository Institution Lenders 
Overview 
The CARES Act was enacted to 
provide immediate assistance to 
individuals, families, and organizations 
affected by the COVID–19 emergency. 
Among the provisions contained in the 
CARES Act are provisions authorizing 
SBA to temporarily guarantee loans 
under the Paycheck Protection Program 
(PPP). Loans under the PPP will be 100 
percent guaranteed by SBA, and the full 
principal amount of the loans and any 
accrued interest may qualify for loan 
forgiveness. Additional information 
about the PPP is available in SBA’s first 
PPP interim final rule (85 FR 20811) 
(the First Interim Final Rule), second 
interim final rule (85 FR 20817), third 
interim final rule (85 FR 21747), and 
fourth interim final rule (85 FR 23450), 
in an interim final rule issued by the 
Department of the Treasury, which was 
posted on April 28, 2020, and in SBA’s 
fifth interim final rule, which was 
posted on April 28, 2020. 
1. Can a single corporate group receive 
unlimited PPP loans? 
No. To preserve the limited resources 
available to the PPP program, and in 
light of the previous lapse of PPP 
appropriations and the high demand for 
PPP loans, businesses that are part of a 
single corporate group shall in no event 
receive more than $20,000,000 of PPP 
loans in the aggregate.1 For purposes of 
this limit, businesses are part of a single 
corporate group if they are majority 
owned, directly or indirectly, by a 
common parent. This limitation shall be 
immediately effective with respect to 
any loan that has not yet been fully 
disbursed as of April 30, 2020.2 
It is the responsibility of an applicant 
for a PPP loan to notify the lender if the 
applicant has applied for or received 
PPP loans in excess of the amount 
permitted by this interim final rule and 
withdraw or request cancellation of any 
pending PPP loan application or 
approved PPP loan not in compliance 
with the limitation set forth in this rule. 
Failure by the applicant to do so will be 
regarded as a use of PPP funds for 
unauthorized purposes, and the loan 
will not be eligible for forgiveness. A 
lender may rely on an applicant’s 
representation concerning the 
applicant’s compliance with this 
limitation. 
The Administrator, in consultation 
with the Secretary, determined that 
limiting the amount of PPP loans that a 
single corporate group may receive will 
promote the availability of PPP loans to 
the largest possible number of 
borrowers, consistent with the CARES 
Act. The Administrator has concluded 
that a limitation of $20,000,000 strikes 
an appropriate balance between broad 
availability of PPP loans and program 
resource constraints. 
SBA’s affiliation rules, which relate to 
an applicant’s eligibility for PPP loans, 
and any waiver of those rules under the 
CARES Act, continue to apply 
independent of this limitation. 
Businesses are subject to this limitation 
even if the businesses are eligible for the 
waiver-of-affiliation provision under the 
CARES Act or are otherwise not 
considered to be affiliates under SBA’s 
affiliation rules.3 
This rule has no effect on lender 
obligations required to obtain an SBA 
guarantee for PPP loans. 
2. Non-Bank and Non-Insured 
Depository Institution Lenders 
a. Can a non-bank lender or non- 
insured depository institution be 
approved to be a lender in the PPP if it 
has originated, maintained, or 
serviced—but not performed all three of 
these functions for—more than $50 
million in business loans or other 
commercial financial receivables during 
a 12-month period in the past 36 
months? 
Yes. The First Interim Final Rule 
provides that a non-bank lender or non- 
insured depository institution may be 
eligible to be a lender in the PPP if the 
lender has originated, maintained, and 
serviced more than $50 million in 
business loans or other commercial 
financial receivables during a 12-month 
period in the past 36 months, in 
addition to satisfying certain other 
requirements. To ensure broad and 
diverse lender participation, SBA and 
the Department of the Treasury have 
also determined that such lenders may 
be approved to make PPP loans if the 
lender has performed the required 
volume of any one of these three 
functions (originating, maintaining, or 
servicing). 
b. Can a non-bank lender that does 
not meet the $50 million threshold in 
the First Interim Final Rule for 
originating, maintaining, and servicing 
loans or receivables apply to be a lender 
in the PPP? 
Yes. As described in the First Interim 
Final Rule, a non-bank lender may be 
eligible to be a lender in the PPP if the 
lender has originated, maintained, and 
serviced more than $50 million in 
business loans or other commercial 
financial receivables during a 12-month 
period in the past 36 months, in 
addition to satisfying certain other 
requirements. In addition, SBA and the 
Department of the Treasury have 
determined that a non-bank lender 
meets the criteria to be a PPP lender and 
may be approved to make PPP loans if 
it has originated, maintained, or 
serviced more than $10 million in 
business loans or other commercial 
financial receivables during a 12-month 
period in the past 36 months, if the non- 
bank lender is (1) a community 
development financial institution (other 
than a federally insured bank or 
federally insured credit union) or (2) a 
majority minority-, women-, or veteran/ 
military-owned lender. Consistent with 
the First Interim Final Rule, a lender is 
ineligible if it currently is designated in 
Troubled Condition by its primary 
federal regulator or is subject to a formal 
enforcement action with its primary 
federal regulator that addresses unsafe 
or unsound lending practices. An 
applicant that meets this $10 million 
threshold but does not meet the $50 
million threshold that is otherwise 
applicable should leave blank the 
attestation on CARES Act Section 1102 
Lender Agreement—Non-Bank and Non- 
Insured Depository Institution Lenders 
(SBA Form 3507) related to the $50 
million threshold and instead include 
with its application an attestation 
stating: ‘‘Lender attests that it has 
originated, maintained, or serviced more 
than $10 million in business loans or 
other commercial financial receivables 
during a consecutive 12 month period 
in the past 36 months.’’ 
3. Additional Information 
SBA may provide further guidance, if 
needed, through SBA notices that will 
be posted on SBA’s website at 
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26326 
Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 
www.sba.gov. Questions on the 
Paycheck Protection Program may be 
directed to the Lender Relations 
Specialist in the local SBA Field Office. 
The local SBA Field Office may be 
found at https://www.sba.gov/tools/ 
local-assistance/districtoffices. 
Compliance With Executive Orders 
12866, 12988, 13132, 13563, and 13771, 
the Paperwork Reduction Act (44 
U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601–612) 
Executive Orders 12866, 13563, and 
13771 
This interim final rule is 
economically significant for the 
purposes of Executive Orders 12866 and 
13563, and is considered a major rule 
under the Congressional Review Act. 
SBA, however, is proceeding under the 
emergency provision at Executive Order 
12866 Section 6(a)(3)(D) based on the 
need to move expeditiously to mitigate 
the current economic conditions arising 
from the COVID–19 emergency. This 
rule’s designation under Executive 
Order 13771 will be informed by public 
comment. 
Executive Order 12988 
SBA has drafted this rule, to the 
extent practicable, in accordance with 
the standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, to 
minimize litigation, eliminate 
ambiguity, and reduce burden. The rule 
has no preemptive or retroactive effect. 
Executive Order 13132 
SBA has determined that this rule 
will not have substantial direct effects 
on the States, on the relationship 
between the National Government and 
the States, or on the distribution of 
power and responsibilities among the 
various layers of government. Therefore, 
SBA has determined that this rule has 
no federalism implications warranting 
preparation of a federalism assessment. 
Paperwork Reduction Act, 44 U.S.C. 
Chapter 35 
SBA has determined that this rule 
will not impose new or modify existing 
recordkeeping or reporting requirements 
under the Paperwork Reduction Act. 
Regulatory Flexibility Act (RFA) 
The Regulatory Flexibility Act (RFA) 
generally requires that when an agency 
issues a proposed rule, or a final rule 
pursuant to section 553(b) of the APA or 
another law, the agency must prepare a 
regulatory flexibility analysis that meets 
the requirements of the RFA and 
publish such analysis in the Federal 
Register. 5 U.S.C. 603, 604. Specifically, 
the RFA normally requires agencies to 
describe the impact of a rulemaking on 
small entities by providing a regulatory 
impact analysis. Such analysis must 
address the consideration of regulatory 
options that would lessen the economic 
effect of the rule on small entities. The 
RFA defines a ‘‘small entity’’ as (1) a 
proprietary firm meeting the size 
standards of the Small Business 
Administration (SBA); (2) a nonprofit 
organization that is not dominant in its 
field; or (3) a small government 
jurisdiction with a population of less 
than 50,000. 5 U.S.C. 601(3)–(6). Except 
for such small government jurisdictions, 
neither State nor local governments are 
‘‘small entities.’’ Similarly, for purposes 
of the RFA, individual persons are not 
small entities. The requirement to 
conduct a regulatory impact analysis 
does not apply if the head of the agency 
‘‘certifies that the rule will not, if 
promulgated, have a significant 
economic impact on a substantial 
number of small entities.’’ 5 U.S.C. 
605(b). The agency must, however, 
publish the certification in the Federal 
Register at the time of publication of the 
rule, ‘‘along with a statement providing 
the factual basis for such certification.’’ 
If the agency head has not waived the 
requirements for a regulatory flexibility 
analysis in accordance with the RFA’s 
waiver provision, and no other RFA 
exception applies, the agency must 
prepare the regulatory flexibility 
analysis and publish it in the Federal 
Register at the time of promulgation or, 
if the rule is promulgated in response to 
an emergency that makes timely 
compliance impracticable, within 180 
days of publication of the final rule. 5 
U.S.C. 604(a), 608(b). Rules that are 
exempt from notice and comment are 
also exempt from the RFA requirements, 
including conducting a regulatory 
flexibility analysis, when among other 
things the agency for good cause finds 
that notice and public procedure are 
impracticable, unnecessary, or contrary 
to the public interest. SBA Office of 
Advocacy guide: How to Comply with 
the Regulatory Flexibility Act, Ch.1. p.9. 
Accordingly, SBA is not required to 
conduct a regulatory flexibility analysis. 
Jovita Carranza, 
Administrator. 
[FR Doc. 2020–09576 Filed 5–1–20; 8:45 am] 
BILLING CODE P 
DEPARTMENT OF TRANSPORTATION 
Federal Aviation Administration 
14 CFR Parts 21, 61, 63, 65, 91, 107, 
125, and 141 
[Docket No.: FAA–2020–0446; Amdt. No(s). 
Amendment numbers 21–102, 61–145, 63– 
43, 65–60, 91–357, 107–3, 125–69, and 141– 
21] 
RIN 2120–AL63 
Relief for Certain Persons and 
Operations During the Coronavirus 
Disease 2019 (COVID–19) Outbreak 
AGENCY: Federal Aviation 
Administration (FAA), Department of 
Transportation (DOT). 
ACTION: Final rule. 
SUMMARY: This Special Federal Aviation 
Regulation (SFAR) provides regulatory 
relief to persons who have been unable 
to comply with certain training, recent 
experience, testing, and checking 
requirements due to the Coronavirus 
Disease 2019 (COVID–19) outbreak. This 
relief allows operators to continue to 
use pilots and other crewmembers in 
support of essential operations during 
this period. Additionally, this SFAR 
provides regulatory relief to certain 
persons and pilot schools unable to 
meet duration and renewal 
requirements due to the outbreak. This 
rule also allows certain air carriers and 
operators to fly temporary overflow 
aircraft, a need resulting from the 
outbreak, to a point of storage pursuant 
to a special flight permit with a 
continuing authorization. 
DATES: Effective April 30, 2020 through 
March 31, 2021. 
ADDRESSES: For information on where to 
obtain copies of rulemaking documents 
and other information related to this 
final rule, see ‘‘How to Obtain 
Additional Information’’ in the 
SUPPLEMENTARY INFORMATION section of 
this document. 
FOR FURTHER INFORMATION CONTACT: For 
technical questions concerning this 
action for pilots, contact Craig Holmes, 
General Aviation and Commercial 
Division; Federal Aviation 
Administration, 800 Independence 
Avenue SW, Washington, DC 20591; 
telephone (202) 267–1100; email 9-AVS- 
AFS800-COVID19-Correspondence@
faa.gov. For technical questions 
concerning this action for mechanics 
and special flight permits, contact Kevin 
Morgan, Aircraft Maintenance Division; 
Federal Aviation Administration, 800 
Independence Avenue SW, Washington, 
DC 20591; telephone (202) 267–1675; 
email Kevin.Morgan@faa.gov. For 
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