Stamps,” Joel Kramer

August 10, 2020; American Banker

To no one’s surprise, the confused administration of Paycheck Protection Programs (PPP) loans has extended to the forgiveness process. Some just want to see that element cut out of the process altogether. Thus, a number of lenders in the program are not yet processing applications for forgiveness despite the fact that the federal portal for that purpose has opened. They’re hoping Congress might simplify the process and, let’s face it, even if Congress were not inclined to help out small businesses and nonprofits, the fact that the banks have a declared dog in the fight could matter to lawmakers.

Last Saturday, the Small Business Administration (SBA) stopped taking new applications for the loans, although, depending on Congress, which is considering a number of proposals for program extensions, it may be revived later, even possibly providing a second bite of the apple to who received loans in the first round.

When the SBA released the forgiveness application in mid-May, it got complaints on its length and complexity. The form was revised and downsized, but they didn’t say where forgiveness applications could be submitted until two months later. In the face of the continued chaos around the process, legislation was filed to allow for automatic forgiveness.

JPMorgan Chase is the program’s biggest lender, with $29.2 billion in PPP loans out of the aggregate $525 billion, and it is advocating for automatic forgiveness because, as Kimberly Hooks, a vice president at Chase Business Banking, put it, “It would help thousands of small business owners get back on their feet.” Not to mention, of course, the hours and hours of work saved.

Holtmeyer & Monson in Memphis, Tennessee, is servicing 12,000 PPP loans for 450 banks. It, too, is similarly delaying any action on forgiveness. Arne Monson, the firm’s president, says, “We’re hoping like hell we get automatic forgiveness for loans of $150,000 and below, and maybe a streamlined [process] for those up to $2 million.”

Some lenders handled the prospect of doing the work to process forgiveness in other bank-like ways, by selling their portfolios of PPP loans to others or by outsourcing the work. Others took an active stance, like First Choice Bancorp in San Diego, which opened its online forgiveness portal to the borrowers on its 1,900 PPP loans at the beginning of July to address its clients’ “peace of mind.” Meanwhile, Greene County Bancorp in Catskill, New York, is taking a mixed approach, working with some applications now while holding onto others in hopes of further announcements.—Ruth McCambridge