On May 6, 2020, the Consumer Financial Protection Bureau (CFPB) issued a “Compliance Aid” that addresses the obligations of creditors under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B with regard to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).

Specifically, the Compliance Aid responds to three FAQs concerning creditors’ adverse action notice obligations for small businesses who have applied for a PPP loan due to the COVID-19 pandemic with the following guidance:

• A PPP application submitted by a creditor to the SBA for loan processing is not a “completed application” for purposes of the ECOA and Regulation B until a creditor receives a loan number from the SBA or a response about the availability of funds. Thus, the requirement to notify an applicant within 30 days of receiving a completed application as to the action taken on the application is not triggered until the creditor receives this loan number or response from the SBA.
• A creditor who receives a PPP application but denies the credit request without submitting the loan to the SBA must provide the applicant with notice of adverse action within 30 days after denying the application.
• A creditor may not deny an application based on incompleteness if the creditor has enough information to provide the applicant with a credit decision, even if the creditor has not received a loan number from the SBA or a response about funds availability. Under Regulation B, a creditor may deny an application for incompleteness only if it is incomplete with respect to information that the applicant has available, and the creditor lacks sufficient data for a credit decision; a loan number or information as to funds availability is not information that an applicant can provide to the creditor. (However, the CFPB notes that, if an application is incomplete regarding information that an applicant can provide, a creditor may choose to provide a notice of incompleteness.)

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