SDBA eNews

April 30 2020

SBA Clarifies PPP's 10-Day Disbursement Window, Fee Payments

The Small Business Administration Tuesday night issued an interim final rule providing clarity on the 10-day loan disbursement requirement under the Paycheck Protection Program, as well as the filing required to receive the lender processing fee.

Moving forward, lenders must make a full, one-time disbursement of PPP loan funds within 10 calendar days of the loan being approved—that is, when a loan is assigned an SBA loan number. (If the end of this period falls on a weekend, or federal holiday, the final day will be the next business day.) For loans approved but not fully disbursed before the issuance of this rule, the 10-day period begins today, April 28.

However, SBA said, “lenders are not responsible for delays in disbursement attributable to a borrower’s failure to timely provide required loan documentation, including a signed promissory note.” If borrowers do not submit their required documentation within 20 calendar days of approval, the loan will be canceled.

To receive their lender processing fee, lenders must fully disburse the loan and file the yet-to-be-released SBA Form 1502 within 20 calendar days after the loan is approved. For loans approved before Form 1502 is made available, the form must be filed by May 18. If a borrower cancels the loan before disbursement or voluntarily terminates it and repays it after disbursement, the lender will not receive a processing fee. Read the interim final rule . Access ABA resources on the PPP.

SBA: 960,000 PPP Loans Made Through Wednesday Afternoon

As of 4 p.m. CDT yesterday, ABA has learned the Small Business Administration had approved more than 960,000 round two Paycheck Protection Program loan applications amounting to more than $90 billion. More than 5,300 lenders have made loans through the PPP.

Lenders with assets of less than $10 billion made 587,000 of these loans totaling $43 billion, while lenders with assets of $10 billion to $50 billion made more than 206,000 loans amounting to more than $20 billion. Lenders with assets more than $50 billion had 167,000 loans approved for a total of more than $25 billion.

After a rocky first two days for round two of the PPP, ABA President and CEO Rob Nichols tweeted yesterday that he was “[h]earing that banks of all sizes across the nation have had more success accessing the PPP loans system today.” Nichols added that ABA is “working closely with [SBA Administrator Jovita Carranza] and SBA to ensure the system will work efficiently so America’s banks can help more small businesses in need.”

ABA Releases New Resources to Help Bankers Navigate Core Platform Marketplace

ABA’s banker-led Core Platforms Committee today released several new resources to help bankers navigate the core provider marketplace.

ABA unveiled fact sheets on the offerings and future plans of 19 core providers currently in the market or launching new platforms soon, as well as sample RFP and RFI templates that bankers can customize for their own market research. These resources complement previously shared information from Finastra, FIS, Fiserv and Jack Henry and Associates. ABA also shared a timeline of the Core Platforms Committee’s work to date.

In a bonus episode of the ABA Banking Journal Podcast released this morning, Committee Chair Julieann Thurlow and ABA President and CEO Rob Nichols discussed these new resources and announced a webinar series on core platform topics. The first webinar, on May 13, will cover contract issues, while future events will explore open banking and the landscape of emerging core providers.

Twenty-One Core Providers Sign On to ABA Principles

As part of ABA’s ongoing work to strengthen the relationship between banks and their core providers so banks can deliver the innovative products and services customers want and need, 21 core providers have signed onto the Principles for Strong Bank-Core Provider Relationships developed by the Core Platforms Committee.

These companies have informed ABA that they are committed to supporting the Principles: BMA Banking Systems, COCC, CSI, Datapro, DCI, Finastra, Finxact, Fiserv, InfoSys, Intellect Design, Jack Henry and Associates, Mambu, Moov, Neocova, Q2, SAP, Smiley Technologies, TCS, Technisys, Thought Machine and UFS Data.

The Principles—released last fall at ABA’s Annual Convention—offer reasonable standards for quality service, open communication, access to bank data, fair contracts and data security that banks can use as part of their conversations with core providers. Read the Principles.

CFPB Announces Relief from TRID, Reg Z Waiting Periods

The Consumer Financial Protection Bureau issued an interpretive rule yesterday clarifying that, due to the COVID-19 emergency, consumers have a greater ability to exercise their rights to modify or waive certain required waiting periods under the TILA-RESPA integrated disclosures and Regulation Z rescission rules. This action—which was advocated by ABA—is intended to help consumers obtain access to mortgages quickly during the coronavirus pandemic. The interpretive rule takes effect upon publication in the Federal Register.‌

Borrowers who affirm, via a brief signed statement, that their financial situation due to the coronavirus pandemic necessitates a faster closing before the end of the TRID or Reg Z rescission waiting periods would be permitted to waive those waiting periods, the CFPB said. The rule also states that the pandemic is a “changed circumstance” for purposes of TRID’s fee disclosure tolerance provisions, which allows creditors to use revised estimates reflecting changes in settlement charges when determining good faith compliance.‌

Along with the interpretive rule, the CFPB also issued a set of FAQs addressing when creditors must provide appraisals or other written valuations to mortgage applicants in order to expedite access to credit for consumers affected by the pandemic. ABA is continuing to review the rule and will publish a staff analysis for bankers in the coming days.

Trade Groups Seek Treasury Clarification on EIP Issues

ABA and several bank, credit union and payment industry trade groups yesterday asked the Treasury Department to respond to news reports that Treasury would seek the return of CARES Act economic impact payments (EIPs) sent to deceased individuals.

“This report is contrary to guidance previously provided by the Department of the Treasury, and contravenes both NACHA rules and Treasury’s own Green Book that govern federal ACH payments,” the groups said. “To reduce confusion amongst recipients and their financial institutions, we request that this matter be addressed with all due haste.”

The groups also sought Treasury clarification on several EIP operational issues, including forecasts of volumes, projected dates, check processing, electronic payments and the IRS user portal. Read the letter. For more information, contact ABA’s Steve Kenneally.

SDBA Cancels National School for Experienced Ag Bankers this Summer

The SDBA has canceled the National School for Experienced Ag Bankers scheduled for June 22-25, 2020, at Black Hills State University (BHSU) in Spearfish, S.D. Because BHSU has closed campus through at least the end of June, and in light of South Dakota’s COVID-19 projected peak, the safest choice was to postpone the school to next year.

The National School for Experienced Ag Bankers will now be held June 21-24, 2021, at BHSU in Spearfish. Registrations will carry forward to next year’s school. Those who registered and wish to cancel will receive a full refund. To cancel your registration, email Halley Lee.

The National School for Beginning Ag Bankers, which was originally scheduled for 2021, will now be held in 2022.

Two HSA Webinars to be Offered in May

JM Consultants, the SDBA’s endorsed IRA training and audit provider, will hold two HSA webinars in May.

An Introduction to Health Savings Accounts Webinar will be held on May 14 at 9:30 a.m. CDT.  This 70-minute program will provide a solid foundation of operational and compliance issues associated with providing HSAs to customers including opening, maintaining and distributing procedures. 

Health Savings Accounts—Beyond the Basics Webinar will be held May 19 at 9:30 a.m. CDT. This 70-minute program will explore the areas of employee eligibility, handling excess and mistaken distributions, investment diversification and product expansion including how HSAs are being touted as a retirement savings vehicle in addition to a health care coverage option.

Both webinars will be taught by Michael O’Brien with JM Consultants. The cost for each webinar is $195, with additional branch connections only $50 per connection.

Reliabank Receives Governor's Award for History

Reliabank, which is celebrating 100 years of doing business in 2020, was recognized by the South Dakota State Historical Society for its efforts in preserving state history. The bank was one of two organizations and four individuals to receive a 2020 Governor’s Award for History.

Reliabank, under the direction of David and Jan Johnson, has been involved in several historic preservation projects in the Watertown area, including the First State Bank of Hazel, now known as Reliabank of Hazel, which was placed on the National Register of Historic Places in 1997. The bank pledged $250,000 to Friends of Goss Opera House Main Hall, to be renamed Reliabank Hall, and the bank has facilitated loans for a revolving loan program for Historic South Dakota.

“We are pleased to give out these awards,” said Jay D. Vogt, director of the State Historical Society at the Cultural Heritage Center in Pierre. “These are just a few of the shining examples of how people across the state are helping us in our efforts to promote, nurture and sustain South Dakota history.” See the full recipient list

Compliance Alliance


Question of the Week

Question: Regarding the recent Regulation D amendments, are these temporary or permanent changes? 

Answer: As the interim final rule is currently written, these changes do appear to be permanent and not tied directly to the current COVID-19 pandemic: 

"In January 2019, the FOMC announced its intention to implement monetary policy in an ample reserves regime. Reserve requirements do not play a role in this operating framework. In light of the shift to an ample reserves regime, the Board announced that, effective March 26, 2020, reserve requirement ratios were reduced to zero percent. This action eliminated reserve requirements for thousands of depository institutions and helped to support lending to households and businesses. As a result of the elimination of reserve requirements on all transaction accounts, the retention of a regulatory distinction in Regulation D between reservable “transaction accounts” and non-reservable “savings deposits” is no longer necessary. In addition, financial disruptions arising in connection with the novel coronavirus situation have caused many depositors to have a more urgent need for access to their funds by remote means, particularly in light of the closure of many depository institution branches and other in-person facilities."
p. 5:

Because this is an interim final rule, however, there is an allowance for comments--so it's possible that there can be changes to it after those are considered and a finalized rule is issued:

"III. Request for Comment The Board seeks comment on all aspects of this interim final rule. In particular, the Board seeks comment on the considerations that may lead depository institutions to choose, or to be required, to retain a numeric limit on the number of convenient transfers that may be made each month from a savings deposit."
p. 11:

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Contact Alisa Bousa, SDBA, at 800.726.7322 or via email.