The Payment Integrity Information Act (PIIA) of 2019 is a federal law passed by Congress that requires all federal agencies, including SBA, to maintain payment integrity controls to help ensure federal funds are properly issued and documented. When a loan is selected for PIIA review, the third-party lender will be copied on all related SBA correspondence.
To help our lending partners better understand and navigate this process, our national association, NADCO, has prepared the guide below to explain why these reviews occur, how loans are selected, and what impact they may have on closing and funding timing.
PIIA Review Guide for SBA 504 Third Party Lenders
SBA Quality Control Reviews Under the Payment Integrity Information Act of 2019 (PIIA)
As a PIIA Review can be part of the SBA 504 or 7(a) loan process, we have created this guide to provide SBA 504 third party lenders an at-a-glance look at what to expect.
Why is there a review and who is involved?
- PIIA Reviews are for quality control and are implemented across all federal agencies
- Both SBA 504 and 7(a) loans may be selected by SBA for review after approval and prior to closing and funding
- Loans are randomly selected by SBA for review – selection does not indicate any specific concerns with the loan or the lender
- SBA’s Office of Financial Program Operations (OFPO) conducts the reviews – the review is independent of SBA’s Sacramento Loan Processing Center (SLPC)
- The CDC will be the primary point of contact with SBA during the process
What is required from the Third Party Lender
- In most cases, nothing is required of the third party lender
- In some scenarios there may be a request for further information
- If the SBA requests information, the CDC will reach out to the third party lender as needed – please respond promptly
Will the review impact the 504 closing and funding dates?
- 504 loan closing and funding cannot occur until final SBA PIIA review clearance
- Lending partners may close prior to SBA’s final PIIA clearance based on their own credit approval and closing requirements
- Review timing will depend on loan complexity and any request for additional information. NADCO is working closely with SBA to establish some guidelines on how long to expect the review process through clearance to take.
What is the Process?
- Loans are selected within 2–3 business days of SBA approval
- The CDC is notified of the review and the Third Party Lender is copied on the notice
- The CDC works with the SBA to satisfy the review and any requests
- SBA verifies:
- Required documentation is present
- SBA eligibility requirements were met
- Loan Terms and Conditions are supported
- SBA system information is accurate
- Credit and eligibility determinations are properly documented
- SBA provides final clearance, allowing the 504 loan to close and fund
What does PIIA stand for?
The Payment Integrity Information Act of 2019 (PIIA). It requires federal agencies to maintain controls that help prevent improper payments and ensure program compliance.
Questions
Please contact the originating CDC with any questions regarding a specific review request, documentation requirement, or expected timeline.
