Vol. XIX, Issue 17
Wespath continues to analyze the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide information to churches, annual conferences, and clergy and lay employees of The United Methodist Church. The following information expands on preliminary information in the April 3, 2020 On Board Express.
CARES Act Participant Retirement Plan FAQs
Wespath has provided a preliminary summary and Q&A about CARES Act provisions related to retirement plan distributions and loans for participants and beneficiaries. The Q&A is here.
For Churches and UMC Organizations
PPP Loan Application Tool for UMC Local Churches
Wespath's Legal Department partnered with the General Council on Finance and Administration (GCFA) Legal Department to create a tool for United Methodist Church local churches to use in completing loan applications for the Paycheck Protection Program (PPP) under the CARES Act. The Loan Application Guidance tool is here.
Small Business Administration (SBA) Guidance for Faith-Based Organizations
On Friday, April 3, 2020, the SBA issued clarification, in the form of frequently asked questions, that religious organizations, including churches, are eligible for Paycheck Protection Program (PPP) loans under the CARES Act.
Key clarifications in the SBA's FAQ include:
Generally, if the local church or annual conference has day-to-day control or influence over an affiliated organization (for non-religious reasons, such as administrative convenience and common management), then the two organizations would add up their employees under the affiliation rules. However, if the local church or annual conference is associated with another organization for theological and connectional reasons (e.g., reflecting a historical relationship, shared mission, or to preserve ecclesiastical oversight of the organization), the local church or annual conference would not have to include the employees of the affiliated organization under the PPP. The SBA and participating lenders will not independently assess the reasonableness of a good-faith determination that this exception applies to the local church or conference.
Future SBA PPP Loans
Anecdotally, we are hearing that local and community banks have greater interest in servicing the SBA PPP loans than larger nationwide banks.
In addition, and importantly because of the high demand for these loans, it appears that there may be consideration in Congress for substantial additional funding for this emergency loan program. On April 7, Senate Majority Leader McConnell (R-KY) announced that he would "work with Treasury Secretary Mnuchin and Senate Minority Leader Schumer (D-NY) in hopes to approve further funding for the Paycheck Protection Program by unanimous consent or voice vote during the next scheduled Senate session."
Wespath continues to analyze the CARES Act and its potential impact on UMC annual conferences, local churches, and clergy/lay employees. If you have questions about the CARES Act, please send them to Tony Prestipino, Andy Hendren, Steve Clark or Jim O'Connell.
Additional resources are available on Wespath's COVID-19 webpage.