Has relief been provided related to the capital effect of banks making SBA PPP loans and funding the loans through the Federal Reserve's PPP lending facility (PPPLF)?

Yes. On April 9, 2020, the federal banking agencies issued an interim final rule that modifies the agencies' capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve's PPP liquidity facility because there is no credit or market risk in association with PPP loans pledged to the facility. Consistent with the agencies' current capital rules and the CARES Act requirements, the interim final rule also clarifies that a zero percent risk weight applies to loans covered by the PPP for capital purposes. For PPP loans not pledged to the Federal Reserve’s PPPLF, a financial institution must include the on-balance-sheet carrying value of the PPP-covered loans in its average total consolidated assets and total leverage exposure. On April 21, 2020, a minor correction was issued to conform the rule text. On September 29, 2020, the agencies finalized a rule that adopted this interim final rule, along with two others, without changes.

Interim Final Rule – Regulatory Capital: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans https://www.fdic.gov/news/news/press/2020/pr20041b.pdf