The Federal Reserve Board ("FRB") adopted an interim final rule to further extend an exception to the requirements under Regulation O for bank executive officers, directors and principal shareholders to apply for Paycheck Protection Program ("PPP") loans from related bank affiliates on behalf of small businesses they own.
The exception initially applied only to PPP loans made by June 30, 2020, and was extended to apply to loans filed through August 8, 2020. The interim final rule further extends the exception to PPP loans, as well as PPP second draw loans, that are made through March 31, 2021.
The interim final rule will go into effect upon its publication in the Federal Register. Comments on the rule must be received within 45 days of its publication in the Federal Register.
Primary Sources
- FRB Press Release: Federal Reserve Board Announces the Second Extension of a Rule to Bolster the Effectiveness of the Small Business Administration's Paycheck Protection Program ("PPP")
- FRB Interim Final Rule: Loans to Executive Officers, Directors and Principal Shareholders of Member Banks
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