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On April 17 the Federal Reserve Board published an interim final rule that exempts loans that are guaranteed under the Small Business Administration’s Paycheck Protection Program (PPP) from many of the insider lending restrictions of Regulation O. The rule was effective on April 22, 2020, upon publication in the Federal Register. The comment period expires on June 8, 2020, which is 45 days after publication in the Federal Register.
The final rule excludes from all requirements of Regulation O, except for the executive officer limits contained in section 215.5, a loan:
- In which the participation by the Small Business Administration on a deferred basis is 100 percent pursuant to section 1102(a)(1) of Pub. L. 116-136 (to be codified at 15 U.S.C. 636(a)(2)(F));
- That is made during the period beginning on February 15, 2020, and ending on June 30, 2020; and
- That would not be prohibited by paragraph 120.110(o) of Title 13 or rules or interpretations thereof issued by the Small Business Administration.
This manual provides a review of the status of Regulation O requirements in regards to PPP loans. The accompanying PowerPoint slides highlight the most important aspects of the manual and serve as a tool for training institution personnel.
