Jennings and other attorneys general seek changes in proposed Payroll Protection Act rule


Delaware Attorney General Kathy Jennings joined colleagues in several states in protesting a proposed rule on Payroll Protection. Act loan/grants.

The SBA proposed a rule that would govern all SBA determinations considering PPP loans—including borrowers’ eligibility, loan amounts, the use of proceeds, and loan forgiveness.

However, the proposed rule governing the appeals process for PPP loans is unfair and has numerous shortcomings that are detrimental to borrowers’ rights, violate due process, and do not comply with the Administrative Procedures Act, Jennings stated in a social media post.

The Payroll Protection Program aided companies and nonprofits but remains under fire for not providing funds to the neediest employers, especially in the minority community

Larger companies were able to benefit from loose rules and long-standing relationships with lenders, accountants and law firms that helped process applications. Some publicly traded companies returned the proceeds after a wave of negative publicity.

Jennings and other AG’s proposed the following:

  • Including procedures for final PPP loan review decisions by the SBA. Borrowers do not know what facts or law the SBA considered in its loan review decision and the lack of procedures leaves borrowers’ confidential information unprotected from disclosure.
  • Holding loan forgiveness applications in abeyance to ensure the deferral period continues during an administrative appeal.
  • Ensure independent and neutral decision-makers conduct appeals of PPP loan decisions. The proposed rule authorizes the same individual who made the initial decision regarding the loan to review an appeal of their own decision.
  • Provide borrowers with fair procedures on appeal. The rule currently allows borrowers to file only one brief in their appeal, denying them the opportunity to file a reply a brief to respond to the SBA’s arguments.Check out the full letter: ➡️
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