ECFA is aware of concerns that are being raised by many churches and ministries related to religious freedom while seeking financial relief under the new CARES Act.
ECFA and other leaders are actively urging the Administration to clarify any language in the regulations and applications for CARES Act funding that might unintentionally disqualify religious organizations or raise concerns regarding their constitutionally protected religious freedoms.
U.S. Senator Josh Hawley issued one such letter regarding these concerns to Administrator Jovita Carranza of the U.S. Small Business Administration, a member of President Trump’s Cabinet. Senator Hawley opened his letter with the following caution: “This program applies more broadly to religious nonprofits than preexisting programs, and the Small Business Administration must be careful not to violate the constitutional rights of these organizations by treating them with disfavor or by trying to tell them who their affiliates are.”
ECFA President Dan Busby said, “We are urging the Administration to communicate to SBA lenders with absolute clarity that churches and religious organizations are eligible for Paycheck Protection Program loans and forgiveness of these loans.”
In a special legal advisory dated April 2, attorneys John Wylie and Stu Lark of Sherman & Howard commented, "Given the limited funds authorized for PPP loans and the anticipated demand, many religious organizations are planning to submit PPP loan applications on Friday, April 3rd, the first day such applications are accepted. In the event there is no further clarification regarding the religious restrictions prior to Friday, religious organizations submitting an application may consider discussing with their legal counsel whether to add a statement explaining how they are interpreting the regulatory restrictions in light of the purposes of the CARES Act (e.g., as being limited to otherwise applicable laws). Such a statement might also affirm that the organization complies with its interpretation of these restrictions."
Attorneys Wylie and Lark joined ECFA for a free webinar to discuss navigating these and other legal and risk management topics in response to the Covid-19 crisis. View the FREE webinar-on-demand, Navigating Critical Legal Issues in the Covid-19 Crisis, here.
For more information regarding the financial relief available under the CARES Act, visit the Small Business Administration website. Remember, the Economic Injury Disaster Loans and Loan advances is an entirely separate program for the Paycheck Protection Program loans.