Deposit Data Indicates That Banking Flows Have Normalized
March 29 balance sheet data from the Federal Reserve shows that banking flows have returned to normal. Both small and large banks saw an increase in deposits, which is a notable change from the longer-term trend toward lower deposits. The rise is likely due to a return of funds from non-bank holdings. The increase in deposits was seen across deposit types and bank sizes.
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SBA Lifts 7(a) Nondepository Lender Moratorium, Changes Underwriting Standards
The Small Business Administration (SBA) has issued a final rule that removes the cap on the number of nondepository lenders allowed to participate in the 7(a) program. The final rule introduces a new type of small-lending company called Community Advantage Small Business Lending Companies to make 7(a) loans. In a separate final rule, SBA has replaced the nine-factor underwriting standard for 7(a) loans with a requirement for lenders to use appropriate and prudent generally acceptable commercial credit analysis processes and procedures consistent with those used for their non-SBA guaranteed commercial loans or use a business credit scoring model.
Read the Nondepository Lending Rule
Read the Underwriting Rule
CFPB Establishes Helpline for Small Business Reporting Rule Compliance
The Consumer Financial Protection Bureau (CFPB) launched SBLHelp to assist financial institutions in complying with the final rule implementing Section 1071 of the Dodd-Frank Act. The CFPB plans to publish additional resources to help financial institutions comply with the rule.