CFPB Provides Guidance to Lenders Regarding PPP Loans

By Shannon Raye Martinez, Attorney in the Creditor’s Rights & Bankruptcy and Litigation Practice Groups

On May 6, 2020, the Consumer Financial Protection Bureau (CFPB) published a policy statement answering three questions relating to the Paycheck Protection Program (PPP). The policy statement clarifies when a creditor is required to provide notice to the loan applicant under the Equal Credit Opportunity Act (ECOA) and Regulation B after receipt of a PPP loan application. ECOA and Regulation B generally requires notice of any action taken on a loan application within 30 days.

As applied to PPP Loans: (1) A PPP loan application is not considered “completed” until the creditor receives a loan number from the SBA; therefore, lenders have 30 days after receipt of an SBA loan number to notify the applicant; (2) In cases where the lender denies the application or requires additional information from the applicant, the lender must send notice to the applicant within 30 days of evaluating the application and give specific reasons for the denial (including what information must be provided to complete the application); and (3) If the lender had sufficient information from the applicant to and submit the application, but the SBA has not responded, the lender cannot deny the application.

Lenders are encouraged to review the CFPB website for additional information or contact a member of the financial services team at Saalfeld Griggs to discuss how this guidance may apply to your financial institution.


Shannon Martinez is a partner in the Creditor’s Rights & Bankruptcy and Litigation practice groups. Shannon is also a member of the Financial Services and Construction industry teams. The information in this article is not intended to provide legal advice. For professional consultation, please contact Shannon at at Saalfeld Griggs PC.  503.399.1070. © 2020 Saalfeld Griggs PCfinanc