Federal bank regulators issue interim final rule for Paycheck Protection Program Facility (2020-04-09)
Summary
A joint press release of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, dated April 09, 2020. It announces an interim final rule to encourage lending to small businesses through the Small Business Administration's Paycheck Protection Program (PPP), established by the CARES Act. The rule modifies the agencies' capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve's PPP facility, and clarifies that a zero percent risk weight applies to loans covered by the PPP. The release states that the rule is effective immediately, with comments accepted for 30 days after publication in the Federal Register.
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Full text
Board of Governors of the Federal Reserve System Joint Press Release April 09, 2020 Federal bank regulators issue interim final rule for Paycheck Protection Program Facility Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency For release at 9:30 a.m. EDT The federal bank regulatory agencies today announced an interim final rule to encourage lending to small businesses through the Small Business Administration's Paycheck Protection Program, or PPP. The PPP was established by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, and provides loans to small businesses so that they can keep their workers on the payroll during the disruptions caused by the coronavirus. The interim final rule modifies the agencies' capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve's PPP facility because there is no credit or market risk in association with PPP loans pledged to the facility. Consistent with the agencies' current capital rules and the CARES Act requirements, the interim final rule also clarifies that a zero percent risk weight applies to loans covered by the PPP for capital purposes. The rule is effective immediately and comments will be accepted for 30 days after publication in the Federal Register . Media Contacts: Federal Reserve Board Eric Kollig 202-452-2955 FDIC Brian Sullivan 202-898-6534 OCC Bryan Hubbard 202-649-6870 Related Content Last Update: July 20, 2020
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