A new insight into PPP loans and their potential impact on CRA performance

A new insight into PPP loans reveals that it may be easier to substantiate them as qualified community development loans. One of the 4 different definitions of community development under CRA is the "economic development" definition. To be qualified for economic development a PPP loan had to meet the "size" test and the "purpose" test. However, banks were not required to collect the gross annual revenues of a PPP loan borrower and therefore did not have the data to substantiate whether the borrower met the size test. Noted CRA expert Len Suzio points out that all PPP loans had to meet the SBA size standards to be eligible to receive a PPP loan. That heretofore unrecognized fact means that every PPP loan is, ipso facto, qualified under the size test applied for economic development purposes.

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