Loren Rodgers
In a press release issued on April 30, the Department of Labor (DOL) announced that it had reached an agreement with Wilmington Trust "to pay a combined $80 million to 21 employee stock ownership plans (ESOPs) for which it served as trustee and $8 million to the government, and to reimburse plan sponsors of ESOPs for legal costs and expenses advanced in connection with the Secretary’s investigations and litigation."
Corey Rosen
The Paycheck Protection Program (PPP) has generated considerable controversy concerning its implementation, fairness, and rules. The Small Business Administration (SBA) is maintaining a FAQ document on the PPP program (PDF) that will be regularly updated. The SBA states, "Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the . . . PPP Interim Final Rules . . . The U.S. government will not challenge lender PPP actions that conform to this guidance, and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time."
Loren Rodgers
Pension & Investments is reporting that Preston Rutledge, the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA), will be stepping down from his post in May. EBSA is the unit that oversees enforcement of employee benefit plans, including ESOPs. P&I's article notes "[a]n official Labor Department announcement has not yet been made and the reason for his departure or his next move could not immediately be learned."
Corey Rosen
Congress voted to add $310 billion in funding to the Payroll Protection Program (PPP). Banks have said the funds are likely to run out quickly. The bill adds one important change to the bill by adding a set aside for “(I) insured depository institutions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000;” and “(II) credit unions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000.” The bill provides that not less than $30 billion in loans will be made by these community financial institutions. The Senate passed the bill on April 21, and the House on April 23. It now goes to President Trump, who is expected to sign it.
Loren Rodgers
Update April 22: Congressional leaders and the White House announced an agreement yesterday which would, among other things, nearly double the amount available through the Paycheck Protection Program (PPP) by adding $320 billion in funding. The Senate passed the bill late yesterday by voice vote, although two senators (Rand Paul of Kentucky and Mike Lee of Utah) voiced opposition. The bill now goes to the House, which is expected to vote on Thursday. The text of the House bill is here.
Loren Rodgers
In recognition of their increased and successful efforts amid the coronavirus outbreak, President Trump praised a number of shipping and trucking companies, including Tennessee-based ESOP Big G Express. Big G Express driver Steven Richardson was invited to make some remarks, in which he spoke about Big G's ESOP and his experience as an essential worker during the pandemic.
Loren Rodgers
We're hearing stories from our members and the extraordinary things employee-owned companies around the nation are doing during this COVID-19 outbreak.
Nathan Nicholson
Update: On April 16, the Small Business Administration (SBA) announced that it has stopped accepting new applications for loans under the Paycheck Protection Program (PPP) thanks to a lapse in appropriations. The PPP is a component of the CARES Act passed by Congress in March to address the economic damage caused by the novel coronavirus outbreak. The $350 billion appropriated for the PPP has been exhausted, and lawmakers are currently negotiating possible additional appropriations to continue the program.
NCEO
The Paycheck Protection Program (PPP), part of the CARES Act stimulus package appears to be starting this morning, with some banks accepting applications. Some ESOP experts feared that the PPP may have been drafted in a way that would effectively have delayed ESOP companies’ participation, but some ESOP companies are reporting success. On April 13, we began reporting results from our survey of ESOP companies, which show, for example, that among companies that had filed a loan application, just under half (43%) had received confirmation that their loan was approved by the SBA. Approval typically took just over three days.
