Business Loan Program Temporary Changes; Paycheck Protection Program-Extension of Lender Records Retention Requirements (rule, 89 FR 68090, August 23, 2024)
Summary
Federal Register pages from Friday, August 23, 2024 (89 FR 68090) carrying an SBA interim final rule, Docket Number SBA–2024–0006, that lengthens the required records retention for lenders that made Paycheck Protection Program loans to ten years. It ties the change to the PPP and Bank Fraud Enforcement Harmonization Act of 2022 (Pub. L. 117–166) and the COVID–19 EIDL Fraud Statute of Limitations Act of 2022, under which fraud charges and civil enforcement actions must be filed not later than 10 years after the offense was committed. The rule counts approximately 11.8 million loans guaranteed by SBA, a guaranteed amount that exceeds $806 billion, and approximately 5,000 PPP lenders, of which approximately 4,900 were federally regulated. The pages open with the end of a CFPB advisory opinion on contract for deed sales under TILA and Regulation Z.
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“Business Loan Program Temporary Changes; Paycheck Protection Program-Extension of Lender Records Retention Requirements (rule, 89 FR 68090, August 23, 2024).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/business-loan-program-temporary-changes-paycheck-protection-program-ex-fbb14d1263/
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68090 Federal Register / Vol. 89, No. 164 / Friday, August 23, 2024 / Rules and Regulations
amount financed, any finance charge, ability to repay, and prohibitions on SMALL BUSINESS ADMINISTRATION
and the annual percentage rate.51 certain fees, among others.61
If the contract for deed is considered 13 CFR Part 120
to be secured by a dwelling by the Regulatory Matters
[Docket Number SBA–2024–0006]
applicable law in the relevant This advisory opinion is an
jurisdiction but is not a high-cost RIN 3245–AI17
interpretive rule issued under the
mortgage loan, the seller will qualify as CFPB’s authority to interpret TILA and Business Loan Program Temporary
a creditor if the seller has extended
Regulation Z, including under section Changes; Paycheck Protection
credit secured by a dwelling more than
1022(b)(1) of the Consumer Financial Program—Extension of Lender
five times in the preceding or current
Protection Act of 2010, which Records Retention Requirements
calendar year and all other elements of
the ‘‘creditor’’ definition are met.52 In authorizes guidance as may be AGENCY: U.S. Small Business
such a case, the seller is subject to TILA necessary or appropriate to enable the Administration.
and Regulation Z’s general disclosure CFPB to administer and carry out the
ACTION: Interim final rule.
requirements, as well as additional purposes and objectives of Federal
mortgage disclosure requirements.53 consumer financial laws.62 SUMMARY: This interim final rule
The transaction would generally also By operation of TILA section 130(f), lengthens the required records retention
qualify as a residential mortgage loan.54 no provision of TILA sections 130, for lenders that made loans under the
These transactions are subject to 108(b), 108(c), 108(e), or section 112 Paycheck Protection Program (PPP) to
important additional requirements, ten years. PPP was established under
imposing any liability applies to any act
including the requirement that a the Coronavirus Aid, Relief, and
done or omitted in good faith in
creditor make a reasonable, good faith Economic Security Act as a temporary
conformity with this interpretive rule, emergency guaranteed loan program to
determination of the consumer’s ability notwithstanding that after such act or
to repay the loan as well as the provide economic relief to small
omission has occurred, the interpretive businesses nationwide adversely
prohibition on mandatory arbitration rule is amended, rescinded, or
clauses.55 These transactions may also impacted by the Coronavirus Disease
determined by judicial or other 2019 (COVID–19), as amended. SBA has
be subject to rules regarding servicing,
authority to be invalid for any reason.63 issued a number of final rules
origination, and fees under TILA.56
If the contract for deed is secured by Pursuant to the Congressional Review implementing the PPP Program. This
a dwelling and qualifies as a high-cost Act,64 the CFPB will submit a report interim final rule harmonizes the PPP
mortgage,57 a seller who extends credit containing this advisory opinion and lender records retention requirements
more than once in any 12-month period other required information to the United with subsequent legislation extending
can qualify as a creditor.58 A seller who States Senate, the United States House the statute of limitations for criminal
originates one or more such credit of Representatives, and the Comptroller charges and civil enforcement actions
extensions through a mortgage broker General of the United States prior to the for alleged PPP borrower fraud to ten
can also qualify as a creditor.59 rule’s published effective date. The years after the offense.
High-cost mortgage transactions will Office of Information and Regulatory DATES:
also trigger HOEPA requirements and Effective date: The provisions of this
Affairs has designated this interpretive
protections, including required interim final rule are effective August
rule as not a ‘‘major rule’’ as defined by
disclosures.60 Specific prohibitions also 22, 2024.
5 U.S.C. 804(2). Applicability date: This interim final
apply to high-cost mortgages, including
The CFPB has determined that this rule applies to all PPP lender loan
a prohibition on extending high-cost
mortgages without written certification advisory opinion does not impose any records. This includes PPP loan
that a consumer has obtained new or revise any existing applications that were withdrawn,
counseling, a prohibition on opening a recordkeeping, reporting, or disclosure approved, denied or cancelled, and all
plan without regarding a consumer’s requirements on covered entities or other PPP lender loan records for PPP
members of the public that would be loans with an outstanding balance, PPP
51 What specific protections and requirement collections of information requiring loans that have been forgiven, and PPP
apply will depend on the particular loan. See 15 approval by the Office of Management loans that are in repayment or have been
U.S.C. 1631, 1632; see also 12 CFR 1026.17–.18. and Budget under the Paperwork paid in full by the borrower as of the
52 12 CFR 1026.2(a)(17)(v) (the person must
Reduction Act.65 effective date of this rule.1
regularly extend credit ‘‘more than 5 times for Comment date: Comments must be
transactions secured by a dwelling’’). Rohit Chopra, received on or before September 23,
53 15 U.S.C. 1631, 1632; 12 CFR 1026.17–.18; see
also 15 U.S.C. 1638; 12 CFR 1026.19(e), 1026.37, Director, Consumer Financial Protection 2024.
1026.38. Specific disclosure requirements will Bureau. ADDRESSES: You may submit comments,
depend on whether the dwelling-secured credit is [FR Doc. 2024–18620 Filed 8–22–24; 8:45 am]
also secured by real property.
identified by docket number SBA–
54 15 U.S.C. 1602(dd)(5). BILLING CODE 4810–AM–P 2024–0006 through the Federal
55 12 CFR 1026.43(c); 12 CFR 1026.36(h)(1). eRulemaking Portal: http://
56 See generally 12 CFR 1026.36; 15 U.S.C. 1639a, www.regulations.gov. Follow the
1639b, 1639e, 1639c(a)–(h). Some provisions only instructions for submitting comments.
apply if the loan is secured by the consumers’ 61 12 CFR 1026.34(a)(4) (open-end, high-cost
principal dwelling. See, e.g., 12 CFR 1026.23.
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mortgage repayment prohibitions), 1026.34(a)(5) 1 To the extent that a federally regulated PPP
57 A high-cost mortgage is any consumer credit
(pre-loan counseling requirements), 1026.34(a)(7)– lender destroyed any PPP loan records before the
transaction secured by a principal dwelling and (8), 1026.34(a)(10) (requirements and prohibitions effective date of this rule in accordance with a
which meets certain conditions as described in 12 general internal records retention policy that was
related to fees).
CFR 1026.32. 15 U.S.C. 1602(bb), 1639; see also 12 acceptable to the PPP lender’s federal regulator,
62 12 U.S.C. 5512(b)(1).
CFR 1026.31, 1026.32, 1026.34. SBA will not enforce compliance by that federally
58 12 CFR 1026.2(a)(17)(v). 63 15 U.S.C. 1640(f).
regulated PPP lender with respect to the PPP loan
59 Id. 64 5 U.S.C. 801 et seq.
records that were destroyed before the effective date
60 12 CFR 1026.32, 1026.34. 65 44 U.S.C. 3501 through 3521. of this rule.
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Federal Register / Vol. 89, No. 164 / Friday, August 23, 2024 / Rules and Regulations 68091
SBA will post all comments on On June 5, the Paycheck Protection responsible for obtaining loan
www.regulations.gov. If you wish to Program Flexibility Act of 2020 (PPP applications and supporting
submit confidential business Flexibility Act) (Pub. L. 116–142) was documentation and preparing the loan
information (CBI) as defined in the User enacted, which changed provisions of note and other closing documentation.
Notice at www.regulations.gov, please the PPP relating to the maturity of PPP The PPP lenders were not required to
send an email to ppp-ifr@sba.gov. All loans, the deferral of PPP loan provide SBA with copies of the loan
other comments must be submitted payments, and the forgiveness of PPP origination and closing documentation,
through the Federal eRulemaking Portal loans. On July 4, 2020, Public Law 116– but instead when the PPP lenders
described above. Highlight the 147 extended SBA’s authority to applied to SBA for the issuance of a PPP
information that you consider to be CBI guarantee PPP loans to August 8, 2020. loan number, the PPP lenders were
and explain why you believe SBA On December 27, 2020, the Economic required to certify that they would
should hold this information as Aid to Hard-Hit Small Businesses, retain those documents in their files.
confidential. SBA will review the Nonprofits and Venues Act (Economic See, SBA Form 2484 (Lender’s
information and make the final Aid Act) (Pub. L. 116–260) was enacted. Application—Paycheck Protection
determination whether it will publish The Economic Aid Act reauthorized Program Loan Guaranty) and SBA Form
the information. lending under the PPP through March 2484–SD (Lender’s Application—
FOR FURTHER INFORMATION CONTACT: A 31, 2021. The Economic Aid Act added Second Draw Loan Guaranty). The
Call Center Representative at 833–572– a new temporary section 7(a)(37) to the forms did not specify the length of time
0502 or the local SBA Field Office; the Small Business Act, which authorized required to retain documents in their
list of offices can be found at https:// SBA to guarantee additional PPP loans files.
www.sba.gov/tools/local-assistance/ (Second Draw PPP Loans) to certain SBA posted the first interim final rule
districtoffices. If you use a eligible borrowers that previously implementing the PPP on SBA’s website
telecommunications device for the deaf received a First Draw PPP Loan under on April 2, 2020, and published the rule
(TDD) or a text telephone (TTY), call the generally the same terms and conditions in the Federal Register on April 15,
Federal Relay Service (FRS), toll free, at available under section 7(a)(36) of the 2020 (85 FR 20811). SBA subsequently
1–800–877–8339. Individuals with Small Business Act. The Economic Aid issued numerous additional interim
disabilities can obtain this document in Act also redesignated section 1106 of final rules. In particular, on February 5,
an accessible format that may be the CARES Act as section 7A of the 2021, SBA published an interim final
provided in Rich Text Format (RTF) or Small Business Act, to appear after rule implementing Economic Aid Act
text format (txt), a thumb drive, an mp3 section 7 of the Small Business Act. changes related to the forgiveness and
On March 11, 2021, the American review of PPP loans (86 FR 8283)
file, Braille, large print, audiotape, or
Rescue Plan Act (ARPA) (Pub. L. 117– (Consolidated Forgiveness and Loan
compact disc, or other accessible
2) was enacted, and among other things, Review IFR).
formats. expanded eligibility for First Draw PPP On August 5, 2022, President Biden
SUPPLEMENTARY INFORMATION: Loans and Second Draw PPP Loans. On signed the PPP and Bank Fraud
I. Background Information March 30, 2021, the PPP Extension Act Enforcement Harmonization Act of 2022
of 2021 (Pub. L. 117–6) was enacted, (Harmonization Act) (Pub. L. 117–166).
On March 27, 2020, the Coronavirus extending SBA’s PPP program authority The Harmonization Act amends section
Aid, Relief, and Economic Security Act through June 30, 2021. 7(a) of the Small Business Act to
(CARES Act) (Pub. L. 116–136) was From April 3, 2020, through August 8, provide, for both First Draw PPP Loans
enacted to provide emergency assistance 2020, when the 2020 round of PPP and Second Draw PPP Loans, that
and health care response for expired, SBA guaranteed over 5.2 notwithstanding any other provision of
individuals, families, and businesses million PPP loans made by over 5,000 law, any criminal charge or civil
affected by the Coronavirus Disease PPP lenders under delegated authority. enforcement action alleging that a
2019 (COVID–19) pandemic. Section Of the approximately 5,000 lenders that borrower engaged in fraud with respect
1102 of the CARES Act temporarily participated in the PPP Program, to a PPP loan guaranteed by SBA shall
permitted the Small Business approximately 4,900 were federally be filed not later than 10 years after the
Administration (SBA) to guarantee 100 regulated lenders and several hundred offense was committed. The
percent of 7(a) loans made by were SBA Supervised Lenders (as Harmonization Act was necessitated by
participating lenders under a new defined in 13 CFR 120.10). From the unprecedented volume of PPP loans,
program titled the ‘‘Paycheck Protection January 11, 2021, when the PPP law enforcement estimates of the
Program’’ (PPP), pursuant to section reopened, through June 30, 2021, when amount of fraud associated with these
7(a)(36) of the Small Business Act (15 the PPP program authority expired, SBA
loans, and the tremendous strain on law
U.S.C. 636(a)(36)) (First Draw PPP guaranteed over 6.6 million additional
enforcement resources in dealing not
Loans). Section 1102(F)(ii)(I) of the PPP loans made by PPP lenders under
only with PPP Program fraud, but fraud
CARES Act stated that all PPP lenders delegated authority. Thus, the total
in the other COVID–19 pandemic
were deemed to have been delegated number of PPP loans guaranteed by SBA
assistance programs administered by
authority by the SBA Administrator to exceeds 11.8 million.2 The total dollar
SBA and other Federal agencies.3
make and approve PPP loans (15 U.S.C. amount of the PPP loans guaranteed by SBA, with support from the
636(a)(36)(F)(ii)(I)). Section 1106 of the SBA exceeds $806 billion. Department of Justice (DOJ) and SBA’s
CARES Act provided for forgiveness of Because the approximately 5,000 PPP
Office of Inspector General (OIG), which
up to the full principal amount of lenders processed PPP loans under the
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qualifying loans guaranteed under the delegated authority provided by the 3 On August 5, 2022, President Biden also signed
PPP. On April 24, 2020, the Paycheck CARES Act, the PPP lenders were the COVID–19 EIDL Fraud Statute of Limitations
Protection Program and Health Care Act of 2022 extending the statute of limitations for
Enhancement Act (Pub. L. 116–139) was 2 In addition to the approximately 11.8 million criminal or civil enforcement actions alleging that
loans guaranteed by SBA, there were also loans a borrower engaged in fraud in SBA’s COVID EIDL
enacted, which provided additional where the borrower’s application was withdrawn by disaster loan program, EIDL Advance program and
funding and authority for the PPP the borrower, declined by the PPP lender, or the Targeted EIDL Advance program to not later than
Program. PPP lender cancelled the loan guaranty. ten years after the offense was committed.
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68092 Federal Register / Vol. 89, No. 164 / Friday, August 23, 2024 / Rules and Regulations
are charged with investigating and means compliance with 13 CFR not SBA Supervised Lenders. Instead,
prosecuting PPP fraud, is seeking to 120.461. (86 FR 8283, 8295). These they are federally regulated lenders. The
harmonize the records retention records retention requirements apply to approximately 4,900 federally regulated
requirements applicable to PPP lenders all PPP loan records, including First lenders that participated in the PPP
by extending those requirements so that Draw PPP Loans and Second Draw PPP Program included those PPP lenders
they are consistent with expanded Loans. regulated by the Federal Deposit
statute of limitations in the The records retention requirements in Insurance Corporation, the Federal
Harmonization Act. 13 CFR 120.461 for SBA Supervised Reserve, the Office of the Comptroller of
As of December 31, 2023, U.S. Lenders provide as follows: the Currency, the National Credit Union
Attorneys’ Offices had criminally • Other preservation of records. An Administration, and the Farm Credit
charged approximately 3,500 defendants SBA Supervised Lender must preserve Administration. Many of these federally
in 2,388 pandemic fraud related cases, for at least 6 years following final regulated lenders participated in PPP
of which approximately 2,005 disposition of each individual SBA under their existing SBA Form 750
defendants had pleaded guilty or been loan: (Loan Guaranty Agreement (Deferred
convicted at trial.4 The fraud loss All applications for financing; Participation)). Other federally regulated
associated with these completed cases is Lending, participation, and escrow lenders participated in PPP by signing
more than $1.2 billion. While not all of agreements; an SBA Form 3506 (CARES Act Section
the cases were related to the PPP Financing instruments; and 1102 Lender Agreement).
Program, a substantial number were, Æ All other documents and Under the Consolidated Forgiveness
and the U.S. Attorneys’ Offices have a supporting material relating to such and Loan Review IFR, federally
similar number of investigations open loans, including correspondence. regulated lenders that participated in
that are yet to be charged. Further, more Id. the PPP Program are currently required
than $1.4 billion in seizures and As noted previously, several hundred to retain their PPP loan records in
forfeiture orders have been issued to SBA Supervised Lenders participated in accordance with the records retention
recover stolen CARES Act funds. the PPP Program. An SBA Supervised requirements imposed by their federal
To date, the DOJ Civil Frauds Division Lender is defined in 13 CFR 120.10 as financial institution regulator. SBA has
has opened more than 800 new a 7(a) Lender that is either a Small determined that there do not appear to
investigations relating to potential civil Business Lending Company or a NFRL. be any consistent or specific time
fraud enforcement in connection with A 7(a) Lender is defined in 13 CFR requirements imposed by federal
the PPP Program. These include 120.10 as an institution that has financial institution regulators that are
investigations implicating more than executed a participation agreement with applicable to PPP records retention as a
5,000 individuals and entities and SBA under the guaranteed loan whole. Instead, federally regulated PPP
billions of dollars in pandemic relief program.5 A Small Business Lending lenders may implement and follow
funds. To date, DOJ has obtained more Company (SBLC) is defined in 13 CFR general internal records retention
than 450 civil settlements and 120.10 as a non-depository lending policies that are acceptable to their
judgments relating to the PPP Program, institution that is SBA-licensed and is regulators. It is likely that many of these
totaling more than $200 million. The authorized by SBA to make loans general internal records retention
number of civil fraud investigations pursuant to section 7(a) of the Small policies allow for periodic destruction
relating to PPP borrowers has grown in Business Act and loans to of certain records after a loan is paid in
volume every year since 2020, and DOJ full, which for PPP would include
Intermediaries in SBA’s Microloan
believes that trend is likely to continue. payment in full through forgiveness or
program. An NFRL or Non-Federally
Extending the PPP lender records otherwise.7 SBA has been making
Regulated Lender is defined in 13 CFR
retention requirements will ensure that forgiveness payments to lenders on PPP
120.10 as a business concern that is
PPP loan records remain available to loans since late 2020, so there is
authorized by the SBA to make loans
law enforcement while they continue to considerable time sensitivity associated
under section 7(a) and is subject to
investigate and prosecute PPP fraud with the need to extend the current PPP
regulation by a state but whose lending
during the expanded ten-year statute of records retention requirements for
activities are not regulated by a federal
limitations period authorized by the federally regulated lenders.
financial institution regulator. Many of
Harmonization Act. This interim final rule extends the
the several hundred SBA Supervised
records retention requirements for all
II. Current SBA Records Retention Lenders that participated in the PPP
PPP lenders to ten years from the date
Requirements for PPP Lenders Program did so under their existing SBA
of final disposition of each individual
Form 750 (Loan Guaranty Agreement
The Consolidated Forgiveness and PPP loan.
(Deferred Participation)) or SBA Form
Loan Review IFR sets forth the current 750CA (Community Advantage Pilot III. Interim Final Rule With Immediate
SBA records retention requirements for Program Loan Guaranty Agreement Effective Date
PPP lenders as follows: (Deferred Participation)). Other SBA
Lenders must comply with applicable This interim final rule is being issued
Supervised Lenders participated in PPP without advance notice and public
SBA requirements for records retention, by signing an SBA Form 3507 (CARES
which for federally regulated lenders comment because section 1114 of the
Act Section 1102 Lender Agreement— CARES Act and section 303 of the
means compliance with the Non-Bank and Non-Insured Depository
requirements of their federal financial Economic Aid Act authorize SBA to
Institution Lenders).6 issue regulations to implement the PPP
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institution regulator and for SBA The overwhelming majority of lenders
supervised lenders (as defined in 13 Program without regard to notice
that participated in the PPP Program are requirements. Congress designed the
CFR 120.10 and including PPP lenders
with authority under SBA Form 3507) PPP as a temporary emergency program,
5 Because PPP is authorized under section 7(a) of
the Small Business Act, all lenders participating in
and the issuance of this interim final
4 See, COVID–19 Fraud Enforcement Task Force the PPP Program are 7(a) Lenders. rule under the statutory rulemaking
2024 Report (April 2024), https://www.justice.gov/ 6 SBA Form 3507 lenders included numerous
coronavirus/media/1347161/dl?inline. fintechs. 7 See, e.g., 12 CFR part 749, Appendix A.
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Federal Register / Vol. 89, No. 164 / Friday, August 23, 2024 / Rules and Regulations 68093
authority in the CARES Act and the SBA has determined that it is V. Additional Information
Economic Aid Act is consistent with impractical and not in the public SBA may provide further guidance, if
Congressional intent. interest to provide a delayed effective needed, through SBA notices that will
SBA finds good cause for forgoing the date. An immediate effective date will be posted on SBA’s website at
advance notice-and-public-comment allow PPP lenders to adjust their www.sba.gov. Questions on the PPP
procedure because that procedure systems and processes to prevent the Program may be directed to the Lender
would be impracticable. The earliest loss of PPP loan records that need to be Relations Specialist in the local SBA
PPP loan was made in April 2020 and preserved for law enforcement Field Office. The local SBA Field Office
SBA began forgiving PPP loans in late purposes. In this rule, SBA is not may be found at https://www.sba.gov/
2020, so it is urgent that the PPP lender imposing a new requirement on PPP tools/local-assistance/districtoffices.
records retention requirements be lenders, rather SBA is extending an
extended to prevent the lapse of records existing requirement of records Compliance With Executive Orders
retention requirements for and potential retention. The systems and process that 12866, 12988, 13132 and 13563, the
destruction of PPP records by federally will need to be adjusted are those that Congressional Review Act, the
regulated lenders that could result in prevent the periodic destruction of Administrative Procedure Act, the
the loss of records that need to be records, and SBA believes that PPP Paperwork Reduction Act (44 U.S.C.
preserved for law enforcement lenders do not need a delayed effective Ch. 35), and the Regulatory Flexibility
purposes. As noted previously, the date to make these adjustments. Act (5 U.S.C. 601–612)
overwhelming majority of PPP lenders Although this interim final rule is Executive Orders 12866 and 13563
are federally regulated lenders. Under effective immediately, comments are
the Consolidated Forgiveness and Loan OMB’s Office of Information and
solicited from interested members of the
Review IFR, those approximately 4,900 Regulatory Affairs (OIRA) has
public on all aspects of the interim final
lenders are currently required to follow determined that this interim final rule is
rule. These comments must be
the records retention requirements of significant for the purposes of Executive
submitted on or before September 23,
their federal financial institution Orders 12866 and 13563. SBA, however,
2024. SBA will consider these
regulators. SBA has determined that is proceeding under the emergency
comments and the need for making any
there do not appear to be any consistent provision at Executive Order 12866
revisions as a result of these comments.
or specific time requirements imposed section 6(a)(3)(D) based on the need to
by federal financial institution IV. Revisions to Prior PPP Rule move expeditiously to preserve the PPP
regulators that are applicable to PPP To harmonize the PPP lender records lender records for law enforcement
records retention as a whole. Instead, retention requirements with the ten-year purposes.
federally regulated PPP lenders may PPP fraud statute of limitations in the This rule is necessary to prevent the
implement and follow general internal Harmonization Act, SBA is extending loss of PPP loan records during the
records retention policies that are the records retention requirements for expanded statute of limitations period
acceptable to their regulators. It is likely all PPP lenders to ten years from the under the Harmonization Act. SBA
that many of these general internal date of final disposition of each anticipates that this rule will result in
records retention policies allow for individual PPP loan. The extended substantial benefits to law enforcement.
periodic destruction of certain records records retention requirements apply As discussed above, as of December 31,
after a loan is paid in full, which for PPP equally to federally regulated lenders 2023, DOJ has prosecuted thousands of
would include payment in full through (including lenders that executed an SBA cases of pandemic-related criminal
forgiveness or otherwise. Since SBA Form 3506) and SBA Supervised fraud involving over a billion dollars in
began making forgiveness payments to Lenders (including lenders that fraud loss. DOJ has a similar number of
PPP lenders starting in late 2020, it is executed an SBA Form 3507). investigations that are open and yet to
urgent that the current PPP records Therefore, the following change is be charged. There have also been over
retention requirements be extended to made to the Consolidated Forgiveness a billion dollars in seizures and
prevent the destruction of PPP loan and Loan Review IFR: forfeitures issued in connection with
records. The last paragraph of Part V.1.c. of the stolen CARES Act funds. Further, the
Additionally, advising PPP lenders of Consolidated Forgiveness and Loan DOJ Civil Frauds Division has over 800
the extended records retention Review IFR (86 FR 8283, 8295) is pending investigations for civil fraud
requirement expeditiously will allow revised to read as follows: enforcement actions related to the PPP
those lenders to adjust their systems and 1. SBA Reviews of Individual PPP Program, involving thousands of
processes as soon as possible in order to Loans individuals and entities and billions of
comply with the newly extended * * * dollars in losses. DOJ believes that the
records retention period. If SBA were to c. When will SBA undertake a loan numbers of these civil fraud
follow the advance notice-and-public- review? investigations will continue to grow.
comment process, that would delay * * * Extending the records retention
issuance of the rule by at least three All PPP lenders must preserve for at requirements for PPP loan records will
months, during which time records that least 10 years following final disposition provide a substantial benefit to the
need to be preserved for law of each individual PPP loan: government and the public by
enforcement purposes are at risk of loss. i. All applications for financing preserving records to allow law
For related reasons, SBA has (including applications for withdrawn, enforcement to continue to investigate
determined that there is good cause to approved, declined and cancelled and prosecute these criminal and civil
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make this rule effective immediately. 5 loans); fraud cases and recover taxpayer funds
U.S.C. 553(d)(3). An immediate effective ii. Lending, participation, and escrow that were wrongfully obtained by these
date will prevent potential loss of agreements; individuals and entities.
records that need to be preserved for iii. Financing instruments; and In this rule, SBA is not imposing new
law enforcement purposes. Given the iv. All other documents and records retention requirements on the
urgent need to preserve PPP loan supporting material relating to such PPP lenders. Instead, SBA is extending
records for law enforcement purposes, loans, including correspondence. existing records retention requirements
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68094 Federal Register / Vol. 89, No. 164 / Friday, August 23, 2024 / Rules and Regulations
for an additional period of time to allow another law, the agency must prepare a practice for aircraft manufacturing and
continued investigation and prosecution regulatory flexibility analysis that meets operations.
of criminal and civil fraud cases. For the requirements of the RFA and DATES: This direct final rule is effective
this reason, SBA expects the costs publish such analysis in the Federal October 22, 2024.
incurred by PPP lenders due to the Register. 5 U.S.C. 603, 604. Submit comments on or before
expanded records retention Rules that are exempt from notice and September 23, 2024. If the FAA receives
requirements to be de minimis. comment are also exempt from the RFA an adverse comment, the FAA will
requirements, including conducting a advise the public by publishing a
Congressional Review Act and
regulatory flexibility analysis, when document in the Federal Register before
Administrative Procedure Act
among other things the agency for good the effective date of this direct final
The Congressional Review Act, 5 cause finds that notice and public rule. That document may withdraw the
U.S.C. 801 et seq., as amended by the procedure are impracticable, direct final rule in whole or in part.
Small Business Regulatory Enforcement unnecessary, or contrary to the public ADDRESSES: Send comments identified
Fairness Act of 1996, generally provides interest. SBA Office of Advocacy guide: by docket number FAA–2024–2052
a major rule cannot take effect until 60 How to Comply with the Regulatory using any of the following methods:
days after it is published in the Federal Flexibility Act, Ch.1. p.9. Since this rule • Federal eRulemaking Portal: Go to
Register. This rulemaking has been is exempt from notice and comment, https://www.regulations.gov/ and follow
reviewed and determined by OMB not SBA is not required to conduct a the online instructions for sending your
to be a ‘‘major rule’’ under 5 U.S.C. regulatory flexibility analysis. comments electronically.
804(2). • Mail: Send comments to Docket
Authority: 15 U.S.C. 636(a)(36); 15 U.S.C.
As explained above, SBA has found 636(a)(37); and 15 U.S.C. 636m; Coronavirus Operations, M–30; U.S. Department of
good cause to bypass the Administrative Aid, Relief, and Economic Security Act, Pub. Transportation (DOT), 1200 New Jersey
Procedure Act’s notice-and-comment L. 116–136, section 1114, and Economic Aid Avenue SE, Room W12–140, West
and 30-day effective date delay to Hard-Hit Small Businesses, Nonprofits, Building Ground Floor, Washington, DC
requirements. 5 U.S.C. 553(b)(B), (d)(3). and Venues Act, Pub. L. 116–260, section
303; PPP and Bank Fraud Enforcement
20590–0001.
Executive Order 12988 Harmonization Act of 2022, Pub. L. 117–166.
• Hand Delivery or Courier: Take
comments to Docket Operations in
SBA has drafted this rule, to the
Isabella Casillas Guzman, Room W12–140 of the West Building
extent practicable, in accordance with
Administrator. Ground Floor at 1200 New Jersey
the standards set forth in section 3(a)
[FR Doc. 2024–18083 Filed 8–22–24; 8:45 am] Avenue SE, Washington, DC, between 9
and 3(b)(2) of Executive Order 12988, to
BILLING CODE 8026–09–P a.m. and 5 p.m., Monday through
minimize litigation, eliminate
Friday, except Federal holidays.
ambiguity, and reduce burden. The rule
• Fax: Fax comments to Docket
has no preemptive or retroactive effect.
Operations at (202) 493–2251.
Executive Order 13132 DEPARTMENT OF TRANSPORTATION Docket: Background documents or
SBA has determined that this rule comments received may be read at
Federal Aviation Administration
will not have substantial direct effects https://www.regulations.gov/ at any
on the States, on the relationship time. Follow the online instructions for
14 CFR Parts 25, 91, 121, and 125
between the National Government and accessing the docket or go to the Docket
the States, or on the distribution of [Docket No. FAA–2024–2052; Amdt. Nos. Operations in Room W12–140 of the
power and responsibilities among the 25–153, 91–377, 121–393, 125–76] West Building Ground Floor at 1200
various layers of government. Therefore, New Jersey Avenue SE, Washington,
RIN 2120–AM00 DC, between 9 a.m. and 5 p.m., Monday
SBA has determined that this rule has
no federalism implications warranting through Friday, except Federal holidays.
Modernization of Passenger
preparation of a federalism assessment. FOR FURTHER INFORMATION CONTACT:
Information Requirements Relating to
‘‘No Smoking’’ Sign Illumination Catherine Burnett, Flight Standards
Paperwork Reduction Act, 44 U.S.C. Implementation and Integration Group,
Chapter 35 AGENCY: Federal Aviation Air Transportation Division, Federal
SBA has determined that this rule Administration (FAA), Department Of Aviation Administration, 800
will require revisions to existing Transportation (DOT). Independence Avenue SW, Washington,
recordkeeping or reporting requirements ACTION: Direct final rule; request for DC 20591; telephone (202) 267–8166;
of the PPP Program information comments. email Catherine.Burnett@faa.gov.
collection, OMB Control Number 3245– SUPPLEMENTARY INFORMATION:
0407. The revisions will have a de SUMMARY: The Federal Aviation
Administration (FAA) is amending its I. Executive Summary
minimis effect on the costs associated
with PPP lender recordkeeping. SBA regulations to allow aircraft to operate Currently, crewmembers must be able
has requested Office of Management and either with ‘‘No Smoking’’ signs to manually turn aircraft ‘‘No Smoking’’
Budget (OMB) emergency approval of continuously illuminated or with ‘‘No signs on and off. This requirement was
the revisions to the PPP lender Smoking’’ signs a crewmember can turn implemented prior to the prohibition on
recordkeeping requirements to prevent on and off. Currently, crewmembers smoking in passenger cabins during all
the loss of PPP loan records. must be able to manually turn aircraft phases of flight. As a general matter,
khammond on DSKJM1Z7X2PROD with RULES
‘‘No Smoking’’ signs on and off. there is no longer a need for the signs
Regulatory Flexibility Act (RFA) However, the current regulations were to indicate two different states of
The Regulatory Flexibility Act (RFA) drafted when the Department of smoking permissibility because smoking
generally requires that when an agency Transportation (DOT) permitted is not typically permitted at any time on
issues a proposed rule, or a final rule smoking at times on commercial flights. most transport category aircraft operated
pursuant to section 553(b) of the These amendments bring FAA commercially in the United States.
Administrative Procedure Act or regulations into alignment with current However, when smoking is permitted on
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