USC - Subsidy for certain loan payments

View all text of Subchapter I [§ 9001 - § 9013]

§ 9011. Subsidy for certain loan payments

(a) Definition of covered loanIn this section, the term “covered loan” means a loan that is—

(1) guaranteed by the Administration under—

(A)section 636(a) of this title—

(i) including a loan made under the Community Advantage Pilot Program of the Administration; and

(ii) excluding a loan made under paragraph (36) of such section 636(a) of this title, as added by section 1102; or

(B) title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); or

(2) made by an intermediary to a small business concern using loans or grants received under section 636(m) of this title.

(b) Sense of CongressIt is the sense of Congress that—

(1) all borrowers are adversely affected by COVID–19;

(2) relief payments by the Administration are appropriate for all borrowers; and

(3) in addition to the relief provided under this Act, the Administration should encourage lenders to provide payment deferments, when appropriate, and to extend the maturity of covered loans, so as to avoid balloon payments or any requirement for increases in debt payments resulting from deferments provided by lenders during the period of the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the Coronavirus Disease 2019 (COVID–19).

(1) In generalSubject to the other provisions of this section, the Administrator shall pay the principal, interest, and any associated fees that are owed on a covered loan in a regular servicing status, without regard to the date on which the covered loan is fully disbursed, and subject to availability of funds, as follows:

(A) With respect to a covered loan made before March 27, 2020, and not on deferment, the Administrator shall make those payments as follows:

(i) The Administrator shall make those payments for the 6-month period beginning with the next payment due on the covered loan.

(ii) In addition to the payments under clause (i)—(I) with respect to a covered loan other than a covered loan described in paragraph (1)(A)(i) or (2) of subsection (a), the Administrator shall make those payments for—(aa) the 3-month period beginning with the first payment due on the covered loan on or after February 1, 2021; and(bb) an additional 5-month period immediately following the end of the 3-month period provided under item (aa) if the covered loan is made to a borrower that, according to records of the Administration, is assigned a North American Industry Classification System code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812; and(II) with respect to a covered loan described in paragraph (1)(A)(i) or (2) of subsection (a), the Administrator shall make those payments for the 8-month period beginning with the first payment due on the covered loan on or after February 1, 2021.

(B) With respect to a covered loan made before March 27, 2020, and on deferment, the Administrator shall make those payments as follows:

(i) The Administrator shall make those payments for the 6-month period beginning with the next payment due on the covered loan after the deferment period.

(ii) In addition to the payments under clause (i)—(I) with respect to a covered loan other than a covered loan described in paragraph (1)(A)(i) or (2) of subsection (a), the Administrator shall make those payments for—(aa) the 3-month period (beginning on or after February 1, 2021) beginning with the later of—(AA) the next payment due on the covered loan after the deferment period; or(BB) the first month after the Administrator has completed the payments under clause (i); and(bb) an additional 5-month period immediately following the end of the 3-month period provided under item (aa) if the covered loan is made to a borrower that, according to records of the Administration, is assigned a North American Industry Classification System code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812; and(II) with respect to a loan described in paragraph (1)(A)(i) or (2) of subsection (a), the 8-month period (beginning on or after February 1, 2021) beginning with the later of—(aa) the next payment due on the covered loan after the deferment period; or(bb) the first month after the payments under clause (i) are complete.

(C) With respect to a covered loan made during the period beginning on March 27, 2020, and ending on the date that is 6 months after March 27, 2020, for the 6-month period beginning with the first payment due on the covered loan.

(D) With respect to a covered loan approved during the period beginning on February 1, 2021, and ending on September 30, 2021, for the 6-month period beginning with the first payment due on the covered loan.

(2) Timing of payment

(3) Application of payment

(4) Limitation

(A) In general

(B) Treatment of additional amounts owed

(5) Additional provisions for new loansWith respect to a loan described in paragraph (1)(C)—

(A) the Administrator may further extend the period described in paragraph (1)(C) if there are sufficient funds to continue those payments; and

(B) during the underwriting process, a lender of such a loan may consider the payments under this section as part of a comprehensive review to determine the ability to repay over the entire period of maturity of the loan.

(6) Eligibility

(7) Authority to revise extensions

(A) In general

(B) PlanIf the Administrator determines under subparagraph (A) that the amounts made available to make payments under this subsection are insufficient, the Administrator shall—

(i) develop a plan to proportionally reduce the number of months provided for each period described in paragraph (1), while ensuring all amounts made available to make payments under this subsection are fully expended; and

(ii) before taking action under the plan developed under clause (i), submit to Congress a report regarding the plan, which shall include the data that informs the plan.

(8) Additional requirementsWith respect to the payments made under this subsection—

(A) no lender may charge a late fee to a borrower with respect to a covered loan during any period in which the Administrator makes payments with respect to the covered loan under paragraph (1); and

(B) the Administrator shall, with respect to a covered loan, make all payments with respect to the covered loan under paragraph (1) not later than the 15th day of the applicable month.

(9) Rule of construction

(d) Other requirementsThe Administrator shall—

(1) communicate and coordinate with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and State bank regulators to encourage those entities to not require lenders to increase their reserves on account of receiving payments made by the Administrator under subsection (c);

(2) waive statutory limits on maximum loan maturities for any covered loan durations where the lender provides a deferral and extends the maturity of covered loans during the 1-year period following March 27, 2020; and

(3) when necessary to provide more time because of the potential of higher volumes, travel restrictions, and the inability to access some properties during the COVID–19 pandemic, extend lender site visit requirements to—

(A) not more than 60 days (which may be extended at the discretion of the Administration) after the occurrence of an adverse event, other than a payment default, causing a loan to be classified as in liquidation; and

(B) not more than 90 days after a payment default.

(e) Rule of construction

(f) Eligibility for new loans

(g) Limitation on assistance

(h) Reporting and outreach

(1) Updated information

(A) In general

(B) Guidance

(2) Publication of list

(3) Education and outreach

(4) NotificationNot later than 30 days after the date of enactment of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, the Administrator shall mail a letter to each borrower of a covered loan that includes—

(A) an overview of assistance provided under this section;

(B) the rights of the borrower to receive that assistance;

(C) how to seek recourse with the Administrator or the lender of the covered loan if the borrower has not received that assistance; and

(D) the rights of the borrower to request a loan deferral from a lender, and guidance on how to do 1

1 So in original. The word “do” probably should not appear.

successfully transition directly to a loan deferral once subsidy payments under this section are concluded.

(5) Monthly reportingNot later than the 15th of each month beginning after the date of enactment of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, the Administrator shall submit to Congress a report on assistance provided under this section, which shall include—

(A) monthly and cumulative data on payments made under this section as of the date of the report, including a breakdown by—

(i) the number of participating borrowers;

(ii) the volume of payments made for each type of covered loan; and

(iii) the volume of payments made for covered loans made before March 27, 2020, and loans made after March 27, 2020;

(B) the names of any lenders of covered loans that have not submitted information on the covered loans to the Administrator during the preceding month; and

(i) Authorization of appropriations

(Pub. L. 116–136, div. A, title I, § 1112, Mar. 27, 2020, 134 Stat. 309; Pub. L. 116–260, div. N, title III, § 325(a), Dec. 27, 2020, 134 Stat. 2032.)