MONTH-IN-BRIEF (Feb 2021)
Banking Law
FinCEN Updates PPP FAQ
By Emily Honsa-Hicks, McGlinchey Stafford, PLLC
On February 1, 2021, FinCen republished (with clarification) its FAQs surrounding Bank Secrecy Act (BSA) requirements applicable to Paycheck Protection Program (PPP) loans. The FAQs include the following information:
- A PPP loan made to an existing customer whose information has already been verified does not trigger a requirement to re-verify.
- For participating federally insured depository institutions and federally insured credit unions, the PPP loans do not trigger a requirement to collect and verify beneficial ownership information for existing customers (unless otherwise required by the lender’s BSA compliance program). For other lenders, if the lender has previously verified beneficial ownership information and the PPP loan is being made to an existing customer, no re-verification is required.
- A lender may rely on the information obtained in connection with a First Draw PPP loan from an existing customer for a Second Draw PPP loan application. However, updating customer information and due diligence should be conducted consistently with this FAQ and the previous FinCEN April 2020 FAQ.
- For new customers, beneficial ownership information must be collected for natural persons, businesses, and legal entities as appropriate. For natural persons with a 20% or greater ownership stake, the lender should collect the owner name, title, ownership %, TIN, address, and date of birth.
- Clarification that the FinCEN FAQs from April 2020 apply to Second Draw PPP loans.
