COVID-19 brought banks new opportunities to make SBA loans to both existing borrowers and new lending relationships. While loan totals increased over this period, certain risks also increased, including credit risk, compliance risk and fair lending risks. Let RLR Management Consulting, Inc. help you in ensuring your SBA loan portfolio is compliant and in line with all the SBA requirements. When the PPP program started, there was a rush to get the loans processed. The question is, in setting your PPP strategy, did you prioritize assisting underserved and rural markets? Other questions include:

• Does geographic distribution analysis of PPP loan applications and originations show lending patterns indicative of redlining or other adverse lending practices?
• Are there disparities in underwriting or servicing outcomes, including forgiveness on prohibited basis?
• For ineligible PPP applicants, did the bank offer other forms of assistance?
• If you offered other SBA relief loans, such as Express Disaster Bridge Loans, have you analyzed your loan distribution and performance from a fair lending and redlining standpoint?
• Does geographic distribution analysis of approved borrower assistance show gaps in lending patterns affecting minority neighborhoods?
• Are exceptions or overrides permitted in loss mitigation decisions? If so, have you analyzed the effects on protected classes?
• If you increased, reduced, or suspended credit lines, did the strategy have a disproportionately adverse impact on protected class applicants or minority neighborhoods?
• Where applicable, did you provide accurate adverse action notices in a timely manner?
• Did your applications and originations include borrowers in low and moderate (LMI) income areas?
• Have you collected sufficient information to report PPP loans as small loans to businesses or farms if appropriate?
• Are there disparities in assistance offerings or servicing outcomes on a prohibited basis?

Before the regulators review your SBA loan portfolio, let RLR review your SBA portfolio for compliance, safety and soundness issues and fair lending patterns. Our loan review team can work quickly and target only those areas deemed in the scope by bank senior management.