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Federal Register / Vol. 86, No. 16 / Wednesday, January 27, 2021 / Notices
7a lending program.19 This includes federally insured depository institutions, credit unions, and nonbanks.20
When the PPP opened on April 3, 2020, demand for PPP loans far exceeded the initial $349 billion of funding for PPP loans and those funds were exhausted in less than two weeks.
Congress subsequently provided another $310 billion including $60 billion specifically to be lent by smaller banks and credit unions, bringing the total funding for the PPP to $659 billion. The second round of funding became available on April 27, 2020 and was not exhausted. When the PPP closed on August 8, 2020, $133 billion remained available.
While the PPP was active, Congress made additional funds available, changed the term for new PPP loans, and revised other program requirements. The SBA also issued numerous interim final rules related to the program and lenders. PPP lenders were responsible for ensuring that their participation in the PPP complied not only with the CARES Act and SBA
rules, but also with other applicable laws, including ECOA.

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Fair Lending Risk Examiners review of small business lenders PA responses identified certain issues that may pose fair lending risks.
In implementing the PPP, multiple lenders adopted a policy that restricted access to PPP loans beyond the eligibility requirements of the CARES
Act and rules and orders issued by the SBA an overlay. Specifically, several small business lenders restricted access by limiting eligibility for PPP loans to existing customers an existing customer overlay. The Bureaus PA
work in this area revealed that the existing customer overlay fell into two general categories:
1 Restrictive policies that allowed only small businesses with a preexisting relationship or certain type of pre-existing relationship with the institution the opportunity to apply for a PPP loan; and 2 less restrictive policies that required small businesses without a preexisting relationship to first become customers of the financial institution usually by opening a business deposit account and then apply for a PPP loan.
19 The
7a loan program is the SBAs primary program for providing financial assistance to small businesses. The programs name comes from section 7a of the Small Business Act, 15 U.S.C. 636a.
The SBA offers several different types of loans through the program.
20 Institutions that were not SBA-certified did have to apply to the SBA and receive delegated authority to process PPP loan applications.

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Examiners determined that an overlay restricting access to PPP loans for small businesses that do not have an existing relationship with the institution, while neutral on its face, may have a disproportionate negative impact on a prohibited basis and run a risk of violating the ECOA and Regulation B.
The small business lenders provided business justifications for their use of existing customer overlays, with the majority of institutions noting that they adopted such overlays because of Know Your Customer legal requirements, the prevention of fraud, or both. Several institutions also offered other, operational reasons for adopting this overlay, including managing extreme demand and enabling the institution to process as many applications as possible before funds were depleted.
Examiners noted the challenges faced by small business lenders in implementing the PPP during a nationwide emergency and found that the institutions stated reasons for adopting their overlays reflected legitimate business needs during part or all of the review period.
Examiners did not, however, conduct a full analysis of any institutions overlay, and did not make any determination about whether an institutions use of the overlay complies with ECOA or Regulation B. Examiners encouraged the small business lenders to consider the fair lending risks associated with participation in the PPP, in further implementation of the PPP, and in any new lending program and to evaluate and address any risks.
4. Conclusion The Bureau is committed to being as transparent as possible about its supervisory findings and will continue to publish Supervisory Highlights to aid Bureau-supervised entities in their efforts to comply with Federal consumer financial law. While the Bureaus PA
reviews are substantially complete, in some instances, examiners identified issues that require follow up. The Bureau will follow-up on risks identified during PAs in the course of its regular supervisory work and findings may be shared in future editions of Supervisory Highlights.
5. Signing Authority The Director of the Bureau, Kathleen L. Kraninger, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register.

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Dated: January 19, 2021.
Grace Feola, Federal Register Liaison, Bureau of Consumer Financial Protection.
FR Doc. 202101601 Filed 12621; 8:45 am BILLING CODE 4810AMP

COUNCIL OF THE INSPECTORS
GENERAL ON INTEGRITY AND
EFFICIENCY
Privacy Act of 1974; System of Records Council of the Inspectors General on Integrity and Efficiency CIGIE.
ACTION: Notice of a new system of records.
AGENCY:

CIGIE proposes to establish a system of records that is subject to the Privacy Act of 1974. Pursuant to Public Law 116136, CIGIE proposes this system of records in furtherance of the statutory mandate of CIGIEs Pandemic Response Accountability Committee PRAC to promote transparency and conduct oversight of the funds disseminated per the Coronavirus Aid, Relief, and Economic Security Act CARES Act; the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020; the Families First Coronavirus Response Act; and any other act primarily making appropriations for Coronavirus response and related activities.

SUMMARY:

This proposal will be effective without further notice on February 26, 2021 unless comments are received that would result in a contrary determination.

DATES:

Submit comments identified by CIGIE5 by any of the following methods:
1. Federal Rulemaking Portal: http
www.regulations.gov.
Submit comments via the Federal eRulemaking portal by searching for CIGIE5. Select the link Comment Now that corresponds with CIGIE5.
Follow the instructions provided on the screen. Please include your name, company name if any, and CIGIE5
on your attached document.
2. Mail: Council of Inspectors General on Integrity and Efficiency, 1717 H
Street NW, Suite 825, Washington, DC
20006. ATTN: Virginia Grebasch/CIGIE
5, Notice of New System of Records.
3. Email: comments@cigie.gov.
FOR FURTHER INFORMATION CONTACT:
Virginia Grebasch, Senior Counsel, Pandemic Response Accountability Committee, Council of the Inspectors ADDRESSES:

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