Banks facing class action suits over PPP loans

Two banks doing business in Colorado have been hit with class action suits a ccusing them of violating the Colorado Consumer Protection Act and committing acts of fraudulent concealment, negligence and tortious interference with contractual relations. Read more.

Banks have been resilient during the coronavirus crisis but how strong they are in the future will depend on the strength of the economy, US bank regulators will say in testimony to the Senate Banking Committee. The Federal Deposit Insurance Corp. is considering temporary changes to leverage ratio requirements that would allow banks to expand their balance sheets, according to Chairman Jelena McWilliams's written remarks.
Quarles Praises Industry Performance During Pandemic in Senate Testimony

The financial industry entered the coronavirus pandemic in a position of strength and has continued to support lending to businesses and households throughout the crisis, Federal Reserve Vice Chairman for Supervision Randal Quarles will tell members of the Senate Banking Committee today. In prepared testimony released ahead of this morning's virtual oversight hearing, Quarles noted that the reforms made after the 2008 financial crisis helped to ensure that “banking organizations are well-positioned to serve as a source of strength, not strain, in the current crisis.”‌
Quarles highlighted several ways that banks—supported by a number of actions by the Fed and other agencies—have provided credit to borrowers, absorbed new deposits from households and businesses and managed an increase in transactions from investors responding to market volatility, “and as a conduit for official-sector support, they have helped stabilize the financial system and restore market function.”‌
He added that banks will continue to play a critical role as they continue to work constructively with their customers that may be facing prolonged financial hardship as the pandemic continues. “Financial institutions now have an essential part to play in addressing that disruption—as a bridge between the start of this crisis and the completion of our economic recovery.” Read Quarles’ testimony .‌

Some banks are finding they are being constrained by the 1991 Tier 1 leverage ratio as the Federal Reserve's easing of capital rules in response to the coronavirus outbreak did not include it.

Government and business leaders have been hoping for a V-shaped economic recovery from the coronavirus pandemic, comprising a steep fall and a sharp rebound. However, negative data across industries and little indication of a return to normality suggest a swoosh-shaped recovery is more likely, consisting of a plunge, followed by a long, slow rise.
Important requirement for SBA reporting on PPP loans

If you are new to SBA reporting, you will need to provide the location ID for your lending institution AND an active SBA Loan Number (approved PPP loan), to the email address below.

"This is all the guidance we have received thus far…we will send additional information as it becomes made available. Thank you for your patience as I know several of you have been inquiring about PPP Reporting," an SBA representative told CBA today.
 
If you do not know your location ID, please contact your local District Office and they will look up this number and provide you with it.
 
PPP reporting starts this Friday 05/15 for first time reporting.
 
PPP Lenders can start to enroll for 1502 Dashboard access now via dedicated inbox enrollment@colsonservices.com
Household income growth expectations reach new low amid ongoing pandemic

The outlook for household income growth reached a series low in April, falling to 1.9% as the coronavirus pandemic continued in the U.S., according to the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations. A total of 21.9% of respondents said they expect their household income to decrease over the coming year. Meanwhile, household spending expectations dropped 0.1 percentage point to 2.2% in April.
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Americans’ median inflation expectations at the one-year horizon increased by 0.1 percentage point to 2.6%, and 0.2 percentage point at the three-year horizon to 2.6%. Read more .
CBA member Compliance Alliance issues pandemic resource for banks

Intended to be a one-stop source for guidance, the Pandemic Resources for Community Banks includes resources from various entities for our member banks to have a quick, one-stop source for guidance that can help.

Other new tools:
 
 
 
Compliance Alliance Pandemic Resource Links:
 
Information on Office Depot’s new source for temperature verification units

Tidel IES 50, a touch-free temperature verification device used to detect employees and visitors who have a fever, thus potentially increasing the risk of infecting others. 
 
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