Page 5 - Bulletin 05_14_20
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aRTiCLeS


        final rule issued by the Small Business                 continue to look for a regulatory solution "to allow banks to serve
        Administration.                                         their customers in a way that’s safe.”
        “Our instruction to banks has been to                   Meanwhile, FDIC Chairman McWilliams called for changes
        make sure, since these loans are not being              to brokered deposit statutes that would limit growth for
        traditionally underwritten, to take a look              undercapitalized institutions rather than “placing a stigma on
        at the certification that the borrower is               brokered deposits, which are not necessarily bad for banks.”  In
        providing,” McWilliams told members of                  her written testimony, McWilliams cited innovation and the need
        the Senate Banking Committee. “To the                   to make banking services accessible to the unbanked population
        extent that they are community banks,   Jelena McWilliams  as key factors driving the FDIC’s initiative to modernize the
        they will quite often know the borrowers in             brokered deposit regulations.
        their communities. We are less concerned about whether or not   To view the IFR, visit: https://www.fdic.gov/news/news/speeches/
        community banks are able to figure out whether the borrower is   spmay1220.html
        legitimate or not.”
        McWilliams added that for larger institutions, “our instructions   SBA Codifies Extensions for PPP
        have been to rely on the certification but be cognizant of who they’re   Safe Harbor, Form 1502 Filing
        lending to. They have to cross their t’s and dot their i’s.” She also
        emphasized that all banks must comply with existing fair lending   The SBA has issued an interim final rule making technical
        laws when making PPP loans. “The fair lending laws, whether or   changes related to the safe harbor for firms that have access to
        not we issue specific guidance in connection with the PPP, they   other sources of capital to repay Paycheck Protection Program
        stand,” she said. “Banks know they have to abide by them.”  loans. Borrowers who applied for PPP loans prior to April
                                                                24, 2020, who repay their loan in full by May 14, 2020, will
        Regulators Float Potential                              be deemed by SBA to have made the required certification of
        Legislative, Regulatory Changes                         economic need in good faith.
        to Aid in Crisis Response                               SBA also extended the deadline for lenders to file the yet-to-be
                                                                released Form 1502 to receive their lender processing fee. As SBA
        During a hearing of the Senate Banking                  previously announced, lenders must file Form 1502 within 20
        Committee, the heads of the financial                   calendar days after the PPP loan is approved. For loans approved
        regulatory agencies discussed potential                 before Form 1502 is made available, the form must now be filed
        legislative changes that would enable                   by May 22.
        them to provide additional support to                   To view the IFR, visit: https://home.treasury.gov/system/files/136/
        banks to address the coronavirus crisis.                Interim-Final-Rule-on-Extension-of-Limited-Safe-Harbor-with-
        Fed Vice Chairman Quarles urged                         Respect-to-Certification-Concerning-Need-for-PPP-Loan-Request.pdf
        lawmakers to expand the authority given   Randal Quarles
        to regulators under the Dodd-Frank Act’s                130M Economic Impact Payments
        Collins Amendment, which created statutory minimum capital
        requirements, to allow them to provide a temporary exclusion for   Distributed to Americans
        safe assets from leverage ratio denominators.
                                                                A total of 130 million Americans
        Banks have seen a large influx of deposits since the crisis began,   received economic impact
        which has caused balance sheet growth and in turn created   payments totaling more than $200
        capital constraints, Quarles said. “If adjustments aren’t made to   billion within the first four weeks
        those capital constraints, then the influx of those safe assets will   of the program, according to
        ultimately cause them to have to turn away customers.” He noted   updated data released by the IRS.
        that the Fed has already made the change to the supplemental   The data included a breakdown of EIPs issued by state, as well
        leverage ratio at the holding company level and signaled that the   as the total number and amount of EIPs sent to individuals with
        agencies could also do so at the depository institution level.  foreign addresses. The IRS is expected to deliver a total of 150
        However, he added that “it gets trickier to make a change to the   million payments to eligible individuals and households in the
        tier 1 leverage ratio, which would be of general applicability, and   coming days as authorized by the CARES Act.
        that’s where Collins amendment difficulties really arise.” Without   To read more visit: https://www.irs.gov/newsroom/treasury-irs-
        expanded congressional authority, he said the agencies would   release-latest-state-by-state-economic-impact-payment-figures





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