This week, the American Financial Services Association (AFSA) joined DACO Investments, Westside Credit Corporation, Inc., Motorists Acceptance Corporation, and Challenge Financial Services in filing an Appellant’s Opening Brief in the 5th Circuit. AFSA's members, like many businesses across the country, experienced significant revenue shortfalls with the onset of the pandemic.
These businesses applied for and received Paycheck Protection Program (PPP) loans to cover payroll costs and prevent staff furloughs. They did so under the assumption that they would be eligible for loan forgiveness if they adhered to PPP guidelines.
However, many businesses saw their PPP loan forgiveness applications denied. The Small Business Administration (SBA) claimed unilateral authority to decide whether small lending businesses or any other type of small business would receive PPP loan forgiveness. The Coronavirus Aid, Relief, and Economic Security Act states in its statutory text that “any business concern” with up to 500 employees “shall be eligible” to receive such loan forgiveness.
In their brief, AFSA and others argue that the Court should reverse the district court’s approval of what they describe as the SBA’s bureaucratic overreach. They emphasize that basic principles of statutory interpretation and reasoned administrative rulemaking under the Administrative Procedure Act (APA) apply regardless of how busy an agency claims to have been during the COVID-19 crisis.