SDBA eNews

December 3, 2020

SBA Releases PPP Loan Data; ABA Updates Talking Points and Resources

The Small Business Administration on Tuesday released names, addresses, loan amounts and names of lenders for all Paycheck Protection Program borrowers. The release came after a court order in a lawsuit brought by media organizations seeking the data.

After the data release, ABA heard that some third-party businesses were using the publicly released data to solicit business from PPP borrowers, specifically referencing the name of the lending institution—in some cases not disclosing that they are unaffiliated with the PPP lender, and others are implying a business relationship where none exists. ABA has updated its bankers-only talking points document with information to help bankers respond and provided a free sample email that bankers can adapt to communicate with their clients.

SBA Outlines Procedures for PPP 'Loan Necessity' Questionnaires

The Small Business Administration last Wednesday outlined procedures for lenders in handling the loan necessity questionnaires that SBA is requesting for PPP loans totaling $2 million or more. The procedures were detailed in a user guide and introductory letter sent using SBA’s PPP forgiveness platform.

According to the documents, lenders will receive notice of requests from SBA for questionnaires via the SBA forgiveness platform at The questionnaires—SBA Form 3509 for for-profit borrowers and Form 3510 for nonprofit borrowers—are available there, and the platform now accepts online submission of the completed questionnaires. Lenders must notify the borrower of the request within five business days and should advise the borrower to complete the form within 10 business days, SBA said. Lenders must upload the completed questionnaire, manually enter borrower responses and upload supporting documentation within five business days of receiving it.

While reiterating that lenders are not required to verify or validate the borrower’s responses or supporting documentation submitted with the questionnaires, SBA emphasized in its letter that “[f]ailure to timely respond to any SBA request may result in a delay in SBA’s remittance of the loan forgiveness amount, if any, or in a determination that the borrower was ineligible for the loan or ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower (or the loan forgiveness amount in the lender’s forgiveness decision).” Lenders may contact [email protected] with questions.

ABA has joined other trade groups in raising concerns about the loan necessity questionnaires, noting that the forms ask for information unrelated to what borrowers were asked to consider when they applied for their PPP loan and warning that they may introduce confusion and excess burden for borrowers and lenders. To share feedback with ABA, contact Dan Martini.

Powell, Mnuchin: Additional COVID-19 Fiscal Support Needed 

In a Senate Banking Committee hearing on the coronavirus response on Tuesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin emphasized the importance of additional fiscal support as the economy continues to feel the effects of the COVID-19 pandemic. An additional stimulus could serve as a “bridge” that would help hard-hit sectors of the economy survive until a vaccine can be distributed, they said.

While Powell observed that the economy has “performed better than expected” overall during the pandemic, certain sectors have been disproportionately affected, including small businesses. “What we’re hearing from community bankers . . . is that there are a lot of small businesses that are at risk of going out of business during this winter, which could be a tough few months,” he said.

“More fiscal response is needed,” added Mnuchin, calling on lawmakers to focus their efforts on “what we can pass quickly on a bipartisan basis to target the most difficult part of the economy.” Among other things, he urged lawmakers to reallocate the $140 billion in unspent Paycheck Protection Program funds, emphasizing that “these small businesses can’t wait two or three months.”

He also recommended that certain funds be set aside specifically for community development financial institutions to ensure that loans are flowing to low-to-moderate-income communities. He applauded a bipartisan effort led by Sens. Mark Warner (D-Va.) and Tim Scott (R-S.C.) that would allocate an additional $10 to $12 billion for CDFIs, “which will create $100 billion of lending quickly.”

DOJ Announces Results of Money Mule Initiative 

U.S. law enforcement agencies took action against more than 2,300 money mules over the last two months as part of the third annual Money Mule Initiative, a coordinated operation between the Department of Justice, FBI, U.S. Postal Inspection Service and six other federal law enforcement agencies. That figure was up from just 600 actions that resulted from last year’s initiative.

This year’s effort resulted in actions in every state in the U.S. targeting money mules involved in a wide range of schemes including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud—many of which were directed toward elderly or vulnerable members of society.

Law enforcement served approximately 2,000 money mules with warning letters, and in approximately 30 instances, seized or facilitated the return of victim funds. In addition, more than 35 individuals were criminally charged or arrested for their roles in receiving victim payments and forwarding the fraud proceeds to accomplices or laundering fraud proceeds.

The DOJ also acknowledged ABA’s efforts to engage with member banks on money mules and highlight the role of financial institutions in addressing the problem. As part of this effort, the ABA Foundation will host a webinar on Thursday, Dec. 10, at 2 p.m. CST with speakers from the DOJ and the banking industry on the Money Mule Initiative and how banks can participate, as well as how to recognize money mule scams and educate their customers. Read the DOJ press releaseRegister for the webinar. For more information, contact ABA’s Sam Kunjukunju.

Nasdaq Proposes Changes to Listing Rules to Promote Board Diversity

Nasdaq this week filed a proposal with the Securities and Exchange Commission to adopt new rules for companies listed on the stock exchange that would require them to “publicly disclose consistent transparent diversity statistics regarding their board of directors.”

Under the proposal, most Nasdaq-listed firms would be required to demonstrate—or explain why they do not have—at least two board members who represent Nasdaq-designated categories, including at least one individual who self-identifies as female and at least one who self-identifies either as a member of a racial or ethnic minority or as LGBTQ+.

Companies would have to disclose this information within one year of the SEC’s approval of the rule, and “all companies will be expected to have at least one diverse director within two years of the SEC’s approval of the listing rule.” (Companies listed on the Nasdaq Global Select Market, Nasdaq Global Market and Nasdaq Capital Market would have slightly longer timeframes to comply.)

Nasdaq added that “for companies that are not in a position to meet the board composition objectives within the required timeframes, they will not be subject to delisting if they provide a public explanation of their reasons for not meeting the objectives.” Read more. For more information, contact ABA's Naomi MercerJoe Pigg or Mike Gullette

Biden Taps Former Fed Chair Yellen for Treasury Secretary

President-Elect Joe Biden on Monday announced that he will nominate former Federal Reserve Chair Janet Yellen to serve as Treasury secretary. If confirmed, Yellen would become only the second person to lead both the Fed and Treasury, as well as the first woman to hold the top Treasury post.

Yellen was tapped to serve as Fed vice chair in 2010 by President Obama and was elevated to the role of chairman in 2014. Prior to that, she served as president of the San Francisco Fed. Yellen also previously served as chair of the Council Economic Advisers during the Clinton administration.

ABA President and CEO Rob Nichols welcomed Biden’s announcement, noting that Yellen’s “past public service as Federal Reserve Board chair and her years of experience in economics prepare her well for the challenges facing the country. Dr. Yellen understands the critical role banks play in the economy, and if confirmed, we look forward to working with her and the rest of the president-elect’s economic team to bolster the recovery and expand opportunities and prosperity for all Americans.”

In addition, Biden also named several other key members of his economic team. Neera Tanden will be nominated as director of the Office of Management and Budget; Wally Adeyemo will be named deputy secretary of the Treasury; and Cecilia Rouse will chair the Council of Economic Advisers. Also joining the council are Jared Bernstein and Heather Boushey. Read more.

Noem Announces New SDHDA Executive Director

Gov. Kristi Noem announced that Lorraine Polak will be appointed executive director of the South Dakota Housing Development Authority (SDHDA), effective Jan. 8, 2021. Polak will replace Mark Lauseng, who is retiring.

“Lorraine has a great understanding of SDHDA’s programs and all the opportunities that they present,” said Gov. Noem. “She will be a dedicated leader and an invaluable partner as it relates to carrying out SDHDA’s mission for the people of South Dakota.”

Polak, who has worked for SDHDA since 1998, currently serves as the director of rental housing development. She previously worked for the Governor’s Office of Economic Development.

“I want to thank Governor Noem for this opportunity to continue to serve South Dakota’s citizens. Working for the Authority has been extremely rewarding, and I am honored to accept this new role," Polak said. "The Authority’s board of commissioners and staff along with the partner agencies we work with are dedicated to providing affordable and appropriate housing. I look forward to ensuring that dedication meets the housing needs of South Dakotans.”   

Polak was born in O’Neill, Neb., and earned her bachelor’s degree in accounting and finance from Chadron State College in Chadron, Neb. She and her husband, Mike, have three children, and she enjoys spending time with family and friends, running, gardening and outdoor activities.

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Contact Alisa Bousa, SDBA, at 605.224.1653 or via email.