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Question of the Week
banks required to report SBA Paycheck Protection Program (PPP) loans to the
credit bureaus? I thought that SBA 7(a) loans are required to be reported, but
I don’t know if this extends to PPP loans.
You are right that there is a general requirement to report
SBA loans. That being said, this requirement was not specifically cross
referenced in the PPP rules, so it’s currently still not clear whether this
requirement extends to PPP loans. While the intent does not appear to be to
require institutions who currently do not report to begin the reporting process
for PPP loans, the bank will ultimately have to make an internal judgment call
until further guidance is issued.
2. Reports to Credit Reporting Agencies In
accordance with the Debt Collection Improvement Act of 1996, Lenders are
required to report information to the appropriate credit reporting agencies
whenever they extend credit via an SBA loan. Thereafter, they should continue
to routinely report information concerning servicing, liquidation, and
charge-off activities throughout the life-cycle of the loan. (See Chapter 26
for more information regarding credit reporting requirements for loans in
SBA SOP 50
57 2, p. 28: https://www.sba.gov/sites/default/files/files/SOP_50_57_2_1.pdf