World News

Fed waives insider dealing rule for Paycheck Protection Program loans

WASHINGTON (Reuters) – The Federal Reserve on Friday waived restrictions on insider dealing for the popular Paycheck Protection Program loans, saying rules against banks lending to directors and shareholders was a burden particularly in rural areas.

The aim of the PPP is to get money to businesses quickly, and limits on lending to bank insiders “have presented some small business owners from accessing PPP loans – especially in rural areas,” the Fed said in announcing it was relaxing its restriction in line with changes already made by the Small Business Administration. The $349 million loan fund is already exhausted, a sign of the stress small businesses are under during the coronavirus pandemic.

(Reporting by Howard Schneider; Editing by Andrea Ricci)