Bankers were quick to applaud Congress for passing the Paycheck Protection Program Act Extension Act.
The bill, which was approved by the Senate Thursday after clearing the
“Providing an additional two months for small business borrowers to access PPP funding and an extra month for SBA to process PPP loans is a common-sense step that will support the economic recovery,” American Bankers Association President and CEO Rob Nichols said in a press release.
“The banking industry has moved heaven and earth to remain a source of strength for small businesses and welcomes the extended timeline to assist even more of the hardest-hit businesses through this program,” Richard Hunt, president and CEO of the Consumer Bankers Association President and CEO, said in a separate release.
With the extension of the PPP’s lending authority all but assured, the question shifts to how long the remaining funding, estimated at about $79 billion, will last.
Though a number of large lenders have stopped accepting applications, many including Truist Financial have indicated that they would consider reopening their portals if Congress extended the program. JPMorgan Chase, the nation’s biggest PPP lender, plans to extend its PPP lending activity following the Senate vote, a spokeswoman said.
Though the final vote in the Senate was overwhelmingly in favor of the extenstion, there was some drama. An amendment offered by Sen. Marco Rubio, R-Fla., that would have restricted the SBA's freedom to set aside PPP funding for particular groups failed by a 52-48 margin. Maine’s Susan Collins was the only Republican to vote against Rubio’s amendment.
“One thing that would undermine this popular, bipartisan program is if people came to the conclusion it was being used arbitrarily to give priority to politically favored groups,” Rubio said.
With demand for stimulus funds still strong, financial industry advocates had strongly backed the House legislation, which placed no restrictions on the SBA’s authority.
"With community banks providing more than 60% of PPP loans and saving an estimated 33.7 million jobs, we strongly support ensuring every potential borrower that needs a loan gets one,” Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, said in a press release.
The PPP was created as part of the $2.1 trillion stimulus program Congress enacted in March 2020. Led by banks, PPP lenders made 5.2 million PPP loans for $522 billion between April 3 and Aug. 8, when the program’s funding authority lapsed.
Congress revived the PPP’s funding authority as part of the $900 billion stimulus legislation it approved at the end of 2020. So far this year, lenders have made 3.1 million PPP loans for $196 billion.
