May 20, 2020                                                                                                      No copyright infringement intended
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An Information Resource Center

PPP Loan Forgiveness Workbook         
ACB, in conjunction with state community bankers associations and the SBA, has gained access to a PPP Loan Forgiveness Workbook for your use in simplifying the PPP loan forgiveness challenge. 
This notebook is intended to be a tool for Community Bankers and PPP borrowers. It organizes the data needed to complete the PPP Loan Forgiveness process. As you move through each Tab and enter data, calculations will occur and auto populate other information for you. The green cells are intended for data input. All other fields contain calculation or validation information and are protected.
We hope you find this beneficial and if you have any questions please let us know.

Tell FDIC to Change Brokered Deposit Proposal       
ICBA is calling on community bankers to urge the FDIC to change its proposed regulations on what constitutes a brokered deposit. ICBA's Be Heard grassroots action center offers a custom letter that community bankers can use to tell the agency that its proposal is too broad and places undue limits on community banks.

Agencies Issue PPP Loan Forgiveness Application       
The Small Business Administration and Treasury Department released the Paycheck Protection Program Loan Forgiveness Application and instructions.
The application form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the CARES Act. The SBA also said it will also soon issue regulations and guidance to help borrowers complete their applications and inform lenders of their responsibilities. The form and instructions include:
  • Options for borrowers to calculate payroll costs using an "alternative payroll covered period" that aligns with borrowers' regular payroll cycles.
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after borrowers received their PPP loan.
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
  • Statutory exemptions from loan forgiveness reduction based on rehiring by June 30.
  • The new exemption for borrowers whose good-faith, written offers to rehire workers were declined.
ICBA and community bankers have repeatedly called on the agencies to provide guidance on PPP loan forgiveness.

Temporary SLR Exclusion       
In an effort to enable banks to safely expand their balance sheets to meet the needs of customers during the coronavirus pandemic, federal banking regulators issued an interim final rule allowing depository institutions to temporarily exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the supplementary leverage ratio.

FDIC Chairman Jelena McWilliams noted that the since the coronavirus pandemic began, "the flight to liquid assets has resulted in dramatic deposit inflows since the beginning of March. This balance sheet expansion, in turn, has contributed to insured depository institutions making substantial deposits in their accounts at Federal Reserve Banks and acquiring significant amounts of U.S. Treasury securities. These trends may continue while ongoing financial market volatility persists." She added that "absent these adjustments, the increase in IDIs' balance sheets may cause sudden and significant spikes in the regulatory capital needed to meet the SLR requirement."
The agencies noted that any institution making changes to its SLR calculation must request approval from its primary federal banking regulator before making capital distributions until the exclusion sunsets on March 31, 2021. The rule takes effect upon publication in the Federal Register..

M oratorium on Foreclosures, Evictions Extended
The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac are extending their moratorium on foreclosures and evictions from May 17 until at least June 30. The foreclosure moratorium applies only to enterprise-backed, single-family mortgages.

The FHFA said it will continue monitoring the COVID-19 outbreak and update its policies accordingly. More information is on the interagency mortgage and housing assistance resource center.

Wall Street Banks Subpoenaed
T he U.S. Justice Department subpoenaed Wall Street banks as part of an investigation into potential abuse of the Small Business Administration's $660 billion Paycheck Protection Program, Reuters reports, citing two people with knowledge of the matter. A third person familiar with the matter reportedly added that the Justice Department wants to go through banks' records of borrowers' private financial and personal data to look for possible wrongdoing. While the first two sources did not provide names, they told the news outlet that "major" banks have been subpoenaed. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. were among the biggest program participants, Reuters added.
Connecting With Small Businesses       
As our nation and industry have been forced to adapt over the last few months, your response to the changing environment has been impressive. A large part of our industry's response has been centered around ensuring that Paycheck Protection Program loans are secured for as many businesses that need and qualify for them. Community banks approved the majority of PPP loans, and with funds still left in the program, we are launching an initiative to help community banks continue to approve as many PPP loans as possible until funds run out.  
ICBA created the PPP Loan Finder, which connects small business owners with community banks offering PPP loans. The loan finder can be accessed through resources such as Facebook's Economic Relief for Small Businesses Portal. Additionally, to enhance communication between small businesses and community banks during this critical time, ICBA is launching a nationwide social media advertising campaign on behalf of community banks. 
We've also added PPP graphics to our Marketing & Communications Toolkit that your bank's marketing team can use to promote the availability of PPP loans. Together, we will continue to show the strength and power of community banks.
Answer of the Week
  The bank has had an increased number of complaints about the overdraft program. A review of the disclosures determined that the wording may cause confusion. If the bank addresses the issue, is there still potential for UDAAP violation?
If the customer has the potential to be misled, or harmed, there is always the potential for a UDAAP violation. However, addressing the issue is a prime place to start. Consider the following:
  • Review the UDAAP exam procedures to determine if the bank's remedies will remove the potential (consult the bank's attorney, or regulator, as necessary)
  • Address the disclosure and reprint and reissue as necessary
  • Determine whether assessed fees need to be refunded
Reference: FDIC Compliance Examination Manual - September 2015, page V-14.2

Compliance Conference - September 9 & 10, 2020

Management & Directors Conference - November 10, 2020

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