July 21, 2021
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Vendor * Spotlight
SBA offers guidance on PPP purchase process, servicing duties

SBA issued a new Procedural Notice to advise Paycheck Protection Program lenders of their servicing responsibilities and the purchase process to ensure a 100 percent guaranty on PPP loans.
 
Effective July 15, the existing PPP platform will:
  • Be programmed to allow lenders to submit requests for guaranty purchase and charge-off for individual PPP loans.
  • Make available Application Programming Interfaces using an automated method.
  • Provide additional guidance, including step-by-step instructions.
 
Regarding servicing responsibilities, the notice says lenders:
  • Must service PPP loans until they are fully forgiven, are paid in full, or the SBA purchases the guaranty and charges off any uncollectable remaining balance.
  • Should work with the borrower to seek forgiveness at the end of the borrower’s loan forgiveness covered period or to request guaranty purchase and charge-off in the event of a default.
  • Must meet additional responsibilities, such as keeping an accurate record of each loan and submitting monthly SBA Form 1502 reports.
 
The Procedural Notice provides additional guidance on borrowers who file for bankruptcy, requesting guaranty purchase and charge-off, required certifications, and more.

Source: SBA
FASB to pursue further CECL improvements

The Financial Accounting Standards Board agreed to add a project to its technical agenda to investigate the suspension of troubled debt restructuring accounting (TDR) for entities that have adopted the Current Expected Credit Losses accounting standard.
 
TDR Project: FASB said the TDR accounting designation and disclosures do not provide stakeholders with valuable information while causing considerable expense for preparers.
 
TDR Background: TDR accounting has largely been suspended during the pandemic through congressional action and has become a confusing part of loan modification accounting as community banks assist customers.
 
PCD Project: FASB also agreed to add a project on accounting for impairment of assets acquired in a business combination amid the confusion surrounding purchased credit deteriorated (PCD) assets.
 
PCD Frustration: The differences in accounting for PCD and non-PCD assets have caused many stakeholders to express frustration with trying to understand the correct accounting model to apply.
 
More: FASB also will continue to seek codification improvements in the CECL disclosures surrounding credit loss write-offs and recoveries by year of origination.
Source: Financial Accounting Standards Board
Agencies propose guidance on third-party relationships

Federal banking regulators proposed interagency guidance designed to help banks manage risks associated with third-party relationships, including those with fintech entities.
 
The proposed guidance:
  • Offers a framework of sound risk management principles.
  • Promotes compliance with all applicable laws and regulations.
  • Accounts for the level of risk, complexity, and size of the banking organization and the nature of the third-party relationship.
 
Open for a 60-day comment period, the proposal would replace each agency’s existing guidance on this topic and would be directed to all institutions supervised by the agencies.
Source: FFIEC
CISA warns of Microsoft Print Spooler vulnerability

The Cybersecurity and Infrastructure Security Agency issued Emergency Directive 21-04 on mitigating a vulnerability in the Microsoft Windows Print Spooler service.
 
Microsoft said a remote code execution vulnerability exists when the service improperly performs privileged file operations, allowing attackers who exploit the vulnerability to install programs, view or change data, or create new accounts with full user rights.
 
CISA directed federal agencies to immediately apply Microsoft updates and disable the service on Windows servers and workstations.
Source: CISA
Feds launch new ransomware resource center

The Cybersecurity and Infrastructure Security Agency launched a new government-wide webpage to help organizations reduce their risk of ransomware. With paid ransoms rising 300 percent in 2020, StopRansomware.gov pools federal ransomware-related resources and alerts designed to help organizations better protect their networks.
 
The Financial Crimes Enforcement Network separately announced it will convene an exchange next month on ransomware with private- and public-sector stakeholders.
Source: CISA, FinCEN
2021 ACB - Bankers Assurance Compliance Conference
September 21-22, 2021
Holiday Inn Airport Conference Center

Featured Speaker - David Dickinson

David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.