A Federal Reserve Board ("FRB") interim final rule modifying the Paycheck Protection Program ("PPP") under the Small Business Act was published in the Federal Register. The interim final rule modifies the PPP to allow bank executive officers, directors and principal shareholders to apply for PPP loans from related bank affiliates on behalf of small businesses they own.

As previously covered, under the rule the FRB will except PPP loans from the definition of "extension of credit" under Federal Reserve Act Section 22 and FRB Regulation O ("Loans to Executive Officers, Directors and Principal Shareholders of Member Banks").

The rule went into effect immediately (i.e., April 22, 2020) and comments must be submitted by June 8, 2020.

Originally published April 22, 2020.

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