II
116th CONGRESS
2d Session
S. 3519
IN THE SENATE OF THE UNITED STATES
March 18, 2020
Mr. Coons (for himself, Mr. Cardin, Ms. Klobuchar, Ms. Duckworth, Mr. Wyden, Mr. Markey, Mrs. Shaheen, Mr. Tester, Mrs. Gillibrand, Mr. King, Ms. Hirono, and Ms. Hassan) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship
A BILL
To authorize the Administrator of the Small Business Administration to subsidize payments on loans guaranteed under the 7(a) and 504 loan programs or made using funds under the microloan program, and for other purposes.
Subsidy for certain loan payments
Definitions
In this section—
the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof; and
the term covered loan means a loan that is—
guaranteed by the Administration under—
section 7(a) of the Small Business Act (15 U.S.C. 636(a)), including a loan made under the Community Advantage Pilot Program of the Administration; or
title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); or
made by an intermediary to a small business concern (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) using loans or grants received under section 7(m) of the Small Business Act (15 U.S.C. 636(m)).
Sense of Congress
It is the sense of Congress that—
all borrowers are adversely affected by COVID–19;
relief payments by the Administration are appropriate for all borrowers; and
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).
Principal and interest payments
In general
The Administrator shall pay the principal, interest, and any associated fees that are owed on a covered loan in a regular servicing status—
with respect to a covered loan made before the date of enactment of this Act and not on deferment, for the 6-month period beginning with the next payment due on the covered loan;
with respect to a covered loan made before the date of enactment of this Act and on deferment, for the 6-month period beginning with the next payment due on the covered loan after the deferment period; and
with respect to a covered loan made during the period beginning on the date of enactment of this Act and ending on the date that is 6 months after such date of enactment, for the 6-month period beginning with the first payment due on the covered loan.
Timing of payment
The Administrator shall begin making payments under paragraph (1) on a covered loan not later than 30 days after the date on which the first such payment is due.
Application of payment
Any payment made by the Administrator under paragraph (1) shall be applied to the covered loan such that the borrower is relieved of the obligation to pay that amount.
Other requirements
The Administrator shall—
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);
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 the date of enactment of this Act; and
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—
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
not more than 90 days after a payment default.
Rule of construction
Nothing in this section may be construed to limit the authority of the Administrator to make payments pursuant to subsection (c) with respect to a covered loan solely because the covered loan has been sold in the secondary market.
Authorization of appropriations
There is authorized to be appropriated to the Administrator $16,800,000,000 to carry out this section.