#2021-10, March 19, 2021

MBA Members Participate in ABA’s Virtual Washington Summit

Earlier this week, nearly 100 MBA member bankers participated in the American Bankers Association’s first Virtual Washington Summit.  Participants heard from key policymakers, including Federal Deposit Insurance Corporation Chairman Jelena McWilliams, Senate Banking Committee Chairman Sherrod Brown (D-OH) and Ranking Member Pat Toomey (R-PA), Rep. Joyce Beatty (D-OH), Sen. Joe Manchin (D-WV) and Cedric Richmond, senior advisor to the President and Director of the White House Office of Public Engagement. 

In addition, Julie Thurlow, president & CEO, Reading Cooperative Bank participated in a discussion on how banks are offering safe and affordable accounts to encourage more individuals to participate in the banking system.  A special thanks to all the bankers who participated in this week’s Summit.

SBA IFR Implements PPP Changes

The Small Business Administration (SBA) this week issued an interim final rule (IFR) that implements several changes to the Paycheck Protection Program (PPP) that were in the American Rescue Plan.  These include revisions to how PPP and the Shuttered Venue Operator Grant Program are integrated and adding businesses with an NAICS code beginning with 72 that employ no more than 500 employees per physical location to the list of entities eligible for first-draw PPP loans.  In addition, the IFR provides additional detail on the types of payroll costs that are not eligible for loan forgiveness.

To read the rule, click here.

SBA Updates Lenders Lender Guidance on Schedule C PPP Applications

In related news, SBA recently updated the PPP FAQs and calculation guidance to reflect new options available to Schedule C-filing PPP applicants, which includes self-employed individuals, sole proprietors and independent contractors, to use gross income to calculate their loan amount. A new Question 66 on the FAQs addresses the options lenders have to help Schedule C borrowers who applied using the prior income calculation formula.

The new FAQ provides details on options available to increase the borrower’s loan amount when lenders have not yet submitted loan guaranty forms, when the loan guaranty application has not yet been approved, when a loan has been approved but not disbursed and when a loan has been disbursed but the lender has not reported disbursement.  It does note that “[i]f the lender has disbursed the loan and filed the related Form 1502 Report reporting disbursement of the loan, no changes can be made to the loan amount calculation.” 

If a lender cancels a loan so that a borrower may submit a different application, they must cancel the loan in E-Tran Servicing, not in SBA’s PPP platform, which may take up to two days to reflect the cancellation.  SBA also issued updated documents providing guidance on revenue reduction and maximum loan amount calculations for both first-draw and second-draw PPP loans.

To read the updated FAQs, click here.  To read the first-draw loan calculation guidance, click here.  The second-draw loan calculation guidance is available here.

Temporary SLR Changes will Expire on March 31

In a joint statement released this morning, the federal banking regulatory agencies announced that the temporary change to the supplementary leverage ratio (SLR), which was issued on May 15, 2020, will expire as scheduled on March 31, 2021. The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses during the COVID-19 pandemic.

Bankers Encouraged to Register for Free Bank Exam Prep Center Webinars

As you know, the Association has joined other state bankers associations across the country in partnering on the Regulatory Feedback Initiative (RFI) through the Coalition of State Bankers Associations.  As part of this partnership, we are pleased to announce the Bank Exam Prep Center, a new powerful resource to assist you in preparing for your upcoming regulatory exams.

Over the last ten years, the RFI has asked banks to complete an anonymous post-exam survey after each exam and visitation. The data from those surveys provides us with critical insights that allow us to help you prepare for your next exam; work with regulators to ensure that bank exams are fair and consistent from agency to agency and region to region; and assist us in auditing regulators’ practices.

The new Bank Exam Prep Center website builds on this data and provides new tools for bankers to prepare for an upcoming regulatory examination.  We encourage all member banks to join us for a free webinar on at 4:00 PM on either Tuesday, March 23, Wednesday, March 24 or Thursday, March 25.  To register for one of the webinars, click here.