Looks like they issued updated FAQs/guidance recently that say it’s OK. See 2. a. on page 14.
https://home.treasury.gov/system/fi...rements-for-Certain-Pledges-of-Loans.pdfa. Are eligible businesses owned by directors or shareholders of a PPP Lender permitted to
apply for a PPP Loan through the Lender with which they are associated?
The Administrator recognizes that, unlike other SBA loan programs, the financial terms
for PPP Loans are uniform for all borrowers, and the standard underwriting process does
not apply because no creditworthiness assessment is required for PPP Loans.
Consequently, there is no meaningful risk of underwriting bias or below-market rates and
terms. The Administrator also recognizes that many directors and equity holders of PPP
Lenders are owners of unrelated businesses. For those reasons, the Administrator, in
consultation with the Secretary, has determined that SBA regulations (including 13 CFR
120.110 and 120.140) shall not apply to prohibit an otherwise eligible business owned (in
whole or part) by an outside director or holder of a less than 30 percent equity interest in
a PPP Lender from obtaining a PPP loan from the PPP Lender on whose board the
director serves or in which the equity owner holds an interest, provided that the eligible
business owned by the director or equity holder follows the same process as any similarly
situated customer or account holder of the Lender. Favoritism by the Lender in
processing time or prioritization of the director’s or equity holder’s PPP application is
prohibited. The Administrator cautions, however, that Lenders should comply with all
other applicable state and federal regulations concerning loans to associates of the
Lender. Lenders should also consult their own internal policies concerning lending to
individuals or entities associated with the Lender.
The foregoing paragraph does not apply to a director or owner who is also an officer or
key employee of the PPP Lender. Officers and key employees of a PPP Lender may
obtain a PPP Loan from a different lender, but not from the PPP Lender with which they
are associated. SBA also reminds Lenders that the “Authorized Lender Official†for each
PPP Loan is subject to the limitations described in the Lender Application Form, which
states in relevant part: “Neither the undersigned Authorized Lender Official, nor such
individual’s spouse or children, has a financial interest in the Applicant [Borrower].â€