Protections for Good Faith PPP Borrowers and Lenders Act

II 116TH CONGRESS 2D SESSION S. 4875 To provide protections for good faith borrowers and lenders under the paycheck protection program, and for other purposes. IN THE SENATE OF THE UNITED STATES OCTOBER 26 (legislative day, OCTOBER 19), 2020 Mr. LEE introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide protections for good faith borrowers and lenders under the paycheck protection program, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Protections for Good 4 Faith PPP Borrowers and Lenders Act’’. 5 SEC. 2. HOLDING HARMLESS GOOD FAITH BORROWERS 6 AND LENDERS. 7 Section 1106 of the CARES Act (15 U.S.C. 9005) 8 is amended— 9 VerDate Sep 11 2014 18:50 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4875.IS S4875 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4875 IS (1) by striking subsection (h) and inserting the 1 following: 2 ‘‘(h) HOLD HARMLESS.— 3 ‘‘(1) IN GENERAL.—A lender may rely on all 4 certifications and documentation submitted by an 5 applicant or eligible recipient pursuant to any re- 6 quirement in statute regarding covered loans, or 7 rules or guidance promulgated to carry out any ac- 8 tion relating to covered loans, from an applicant or 9 eligible recipient attesting that the applicant or eligi- 10 ble recipient has accurately verified all documenta- 11 tion provided to the lender. 12 ‘‘(2) NO ENFORCEMENT ACTION.—With respect 13 to a lender that relies on the certifications and docu- 14 mentation described in paragraph (1)— 15 ‘‘(A) no enforcement or other action may 16 be taken against the lender relating to loan 17 origination, forgiveness, or guarantee based on 18 such reliance, including claims under— 19 ‘‘(i) the Small Business Act (15 20 U.S.C. 631 et seq.); 21 ‘‘(ii) sections 3729 through 3733 of 22 title 31, United States Code (commonly 23 known as the ‘False Claims Act’); 24 VerDate Sep 11 2014 18:50 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4875.IS S4875 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4875 IS ‘‘(iii) the Financial Institutions Re- 1 form, Recovery, and Enforcement Act of 2 1989 (Public Law 101–73; 101 Stat. 183); 3 ‘‘(iv) section 21 of the Federal De- 4 posit Insurance Act (12 U.S.C. 1829b), 5 chapter 2 of title I of Public Law 91–508 6 (12 U.S.C. 1951 et seq.), and subchapter 7 II of chapter 53 of title 31, United States 8 Code (collectively known as the ‘Bank Se- 9 crecy Act’); or 10 ‘‘(v) any other Federal, State, or 11 other criminal or civil law or regulation; 12 and 13 ‘‘(B) the lender shall not be subject to any 14 penalties relating to loan origination, forgive- 15 ness, or guarantee based on such reliance.’’; 16 and 17 (2) by adding at the end the following: 18 ‘‘(n) ENFORCEMENT ACTION AGAINST BOR- 19 ROWERS.—An eligible recipient of a covered loan may only 20 be subject to an enforcement action or penalty relating 21 to loan origination, forgiveness, or guarantee of the cov- 22 ered loan if the eligible recipient commits fraud or expends 23 covered loan proceeds on expenses that are not allowable 24 VerDate Sep 11 2014 18:50 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4875.IS S4875 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4875 IS under section 7(a)(36)(F) of the Small Business Act (15 1 U.S.C. 636(a)(36)(F)).’’. 2 SEC. 3. EXCLUSION OF PPP LOANS FROM THE CALCULA- 3 TION OF LENDING INSTITUTION ASSETS. 4 (a) DEFINITIONS.—In this section— 5 (1) the terms ‘‘bank’’ and ‘‘bank holding com- 6 pany’’ have the meanings given those terms in sec- 7 tion 2 of the Bank Holding Company Act of 1956 8 (12 U.S.C. 1841); 9 (2) the term ‘‘credit union’’ includes— 10 (A) an insured credit union, as that term 11 is defined in section 101 of the Federal Credit 12 Union Act (12 U.S.C. 1752); and 13 (B) any credit union that is eligible to 14 make application to become an insured credit 15 union pursuant to section 201 of the Federal 16 Credit Union Act (12 U.S.C. 1781); and 17 (3) the term ‘‘lending institution’’ includes a 18 bank, a bank holding company, and a credit union. 19 (b) PROHIBITION.—No loan made under section 20 7(a)(36) of the Small Business Act (15 U.S.C. 21 636(a)(36)) may be included in any asset threshold cal- 22 culation for any lending institution, including a threshold 23 described in— 24 VerDate Sep 11 2014 18:50 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4875.IS S4875 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4875 IS (1) section 10(d)(4)(A) of the Federal Deposit 1 Insurance Act (12 U.S.C. 1820(d)(4)(A)); 2 (2) section 809 of the Community Reinvestment 3 Act of 1977 (12 U.S.C. 2908); 4 (3) section 13(h)(1)(B)(i) of the Bank Holding 5 Company Act of 1956 (12 U.S.C. 1851(h)(1)(B)(i)); 6 and 7 (4) any regulation promulgated under a section 8 described in paragraph (1), (2), or (3). 9 SEC. 4. PROHIBITION ON CFPB OVERSIGHT OF LENDING IN- 10 STITUTIONS PARTICIPATING IN THE PPP. 11 The Bureau of Consumer Financial Protection shall 12 not have the authority to— 13 (1) assess, audit, review, or examine any part 14 of the participation of a lender in the program es- 15 tablished under section 7(a)(36) of the Small Busi- 16 ness Act (15 U.S.C. 636(a)(36)); or 17 (2) levy fees or fines against a lender due to 18 any action of the lender under the program de- 19 scribed in paragraph (1). 20 Æ VerDate Sep 11 2014 18:50 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S4875.IS S4875 pamtmann on DSKBC07HB2PROD with BILLS