Page 10 - Bulletin 05_14_20
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        times adjusted EBITDA. In the MSELF for larger loans, the   Agencies Issue Statement on
        maximum loan will be $200 million, 35% of outstanding and   Cloud Computing Security
        undrawn available debt or six times adjusted EBITDA, whichever
        is less. Instead of referencing loans to the Secured Overnight   With many banks moving
        Financing Rate, lenders in all facilities will use LIBOR plus 300   some or all employees to
        basis points.                                           remote work arrangements

        To read more and view revised term sheets, visit:       and accessing more cloud-  based technologies, the
        monetary20200430a.htm                                   Federal Financial Institutions
                                                                Examination Council released a statement on risk management
        FHFA: FHLBs May Purchase PPP                            principles for cloud computing security. FFIEC noted that the
        Loans as Collateral for Advances                        statement does not contain new regulatory expectations but
                                                                rather highlights examples of risk management practices.
        The Federal Housing Finance Agency confirmed that Federal   Such practices include those related to governance; cloud security
        Home Loan Banks may accept PPP loans as collateral when   management; change management; resilience and recovery; and
        making advances to their member banks. This move – the latest   audit and controls assessment.
        in a series of actions by the FHFA to support lending during the   To read more visit:
        pandemic – is intended to provide additional liquidity for small   Cloud_Computing_Statement.pdf
        banks they work to meet the needs of small businesses in their
        communities.                                            IRS Issues FAQs on Employee
        While a positive development, there are limitations of the   Retention Credit
        usefulness of this action, due to a haircut of at least 10% taken by
        the FHLBs that will reduce the overall value of collateral, as noted   The IRS has issued a document
        in a list of conditions released by FHFA. Additionally, members   addressing 15 frequently asked
        pledging collateral must have a CAMELS rating of 3 or better   questions on the CARES Act’s
        or a member credit ranking in the top 60% of FHLB’s member   employee retention credit.
        rating systems. FHLB member banks may pledge a maximum of   In the CARES Act, certain
        $5 billion in PPP loans in collateral to their FHLB.    employers are granted a credit of up to 50% of qualified wages
        To read more visit:  paid to employees, subject to a cap of $10,000 per employee.
        Pages/FHFA-Supports-Small-Business-by-Allowing-FHLBanks-to-  Eligible employers must have had to fully or partially suspend
        Accept-PPP-Loans-as-Collateral.aspx                     operation during any calendar quarter in 2020 due to orders
                                                                from an appropriate governmental authority limiting commerce,
        Fed Expands PPP Liquidity                               travel or group meetings (for commercial, social, religious, or
        Facility’s Eligible Participants,                       other purposes) due to COVID-19; or experience a 50% or more
                                                                decline in gross receipts during the calendar quarter.
        Collateral                                              Different calculations of qualified wages apply depending on

        The Federal Reserve has expanded access to its PPP Liquidity   the number of employees. For qualified employers with 100 or
        Facility to nonbank lenders and expanded the range of collateral   less employees, the amount of the qualified wages is based the
        that can be pledged to the PPPLF. Eligible borrowers will now be   amount of qualified wages paid without further qualification. For
        able to pledge whole PPP loans that they have purchased.  other qualified employers, qualified wages are the wages paid to
                                                                an employee for time that the employee is not providing services
        All lenders approved by SBA to make PPP loans are now eligible   due to an economic hardship. In most cases, banks have been
        to pledge collateral to the PPPLF. Eligible non-depository   designated as “essential businesses.”
        institutions include nonbank community development financial
        institutions, Farm Credit System lenders, small business lending   The FAQs provide guidance regarding credit qualification for
        companies licensed by SBA and some fintech firms, the Fed said.   essential businesses that have made changes to their operations
                                                                due to the coronavirus.
        To read more visit:
        pressreleases/monetary20200430b.htm                     To view the FAQs visit:

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