SDBA eNews

October 1, 2020

ABA, Trade Groups Make Push for More PPP Funding, Streamlined Forgiveness

With time running out before Congress adjourns ahead of the November elections, ABA joined nine financial trade associations in a letter on Tuesday urging congressional leaders to immediately pass standalone legislation that would allow for additional funding for the Paycheck Protection Program and streamline the forgiveness process for PPP borrowers.

“The PPP provided over five million small businesses the financial lifeline they desperately needed to weather the start of the pandemic and the economic shutdown that followed,” the groups wrote. “As these businesses continue to recover, they will need additional resources to maintain business operations, and the PPP remains the most efficient and effective means to assist them through this challenging period.”

With regard to forgiveness, the groups wrote in support of two bipartisan bills, S. 4117, sponsored by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.), and H.R. 7777, a House companion bill sponsored by Reps. Chrissy Houlahan (D-Pa.) and Fred Upton (R-Mich.). Both bills would forgive PPP loans of less than $150,000 upon the borrower’s completion of a one-page document.

“Throughout the pandemic, helping small businesses has consistently been bipartisan,” the groups wrote. “As lenders that support our nation’s small businesses and stepped up to help deliver the critical relief the Paycheck Protection Program provided, we strongly urge members of the Senate and House to continue these bipartisan efforts by quickly supporting an extension of PPP funding and a simpler forgiveness process that will make converting loans into grants easier and less technical for millions of small business borrowers that have PPP loans.” Read more.

Nichols Asks Bankers to Call Congressional Leaders on PPP Legislation 

Given the urgency of PPP forgiveness, ABA President and CEO Rob Nichols sent a CEO Update on Tuesday asking bankers to call House and Senate leaders in support of S. 4117 and H.R. 7777. Bankers can connect easily to the Capitol Hill switchboard through ABA’s grassroots platform, Secure American Opportunity.

ABA Launches National Anti-Phishing Campaign with 1,500 Bank Partners

ABA, together with nearly 1,500 banks serving the vast majority of retail bank customers in the U.S., today launched a first-of-its kind, industry-wide campaign to educate consumers about the persistent threat of phishing scams. The public facing campaign, #BanksNeverAskThat, is a fresh, bold plug-and-play campaign that fights phishing fraud by turning bank customers into expert scam spotters. It launches as the industry kicks off Cybersecurity Awareness Month in October.

“This campaign is an unprecedented effort by the banking industry to address a growing threat to our customers,” said ABA President and CEO Rob Nichols. “With the help of banks from across the nation, we’re turning the tables on the bad guys by empowering consumers with the tools they need to spot bogus bank communications.”

Throughout the month, participating banks will share eye-catching and engaging short videos, animated GIFs and consumer tips on social media and in bank branches designed to highlight common phishing schemes. The campaign’s six short videos offer a humorous take on the kinds of questions banks would never ask and direct consumers to visit for more information, including a quiz, a list of phishing red flags, tips and FAQs.

"America's banks are fighting back with major investments in technology and security protocols designed to stay a step ahead of the bad guys, but well-informed customers are another critical layer of defense," Nichols wrote in a new LinkedIn post, calling on banks that have not yet registered to participate in the campaign. "This effort is too important to have any bank on the sideline. That's why ABA will continue to provide all of the campaign materials at no cost to ABA members and non-members alike." ‌

FinCEN's Blanco Urges Banks: Be Specific When Filing COVID-Related SARs

Banks filed more than 64,000 Suspicious Activity Reports referencing COVID-19 and related stimulus programs—about 71% of all coronavirus-related SAR filings, Financial Crimes Enforcement Network Director Ken Blanco said Tuesday. A majority of these SARs referenced suspected fraud against federal or state relief programs.

“The most common trend we see in COVID-19 related SARs involved fraudsters targeting multiple COVID-19 related government stimulus programs, employing money mules and cyber techniques,” Blanco said. “Stimulus programs intended to benefit both individual taxpayers and small businesses have been targeted for fraud, with multiple [ACH] payments disbursed to a single account representing the most common financial pattern reported in SARs.”

He urged banks to be as specific as possible when filing SARs related to COVID-19, noting that “vague references to ‘stimulus’ or ‘CARES Act’ or ‘benefit’ in SARs hinder our ability to get the information into the hands of the right team.” For example, if suspicious activity is related to an ACH payment from a state unemployment insurance program, banks should clearly mention “COVID-19 Unemployment Insurance Fraud” in field two of the SAR as well as the narrative, he said. “The more specific you are in your SAR narrative, the faster it will get to the right investigators.” Read Blanco’s remarks.

Agencies Issue Final Rules on Appraisals, LCR Relief

The federal banking agencies on Tuesday finalized two rules intended to provide relief for financial institutions as a result of actions taken to aid in the coronavirus response. Both rules are substantively similar to interim final rules issued earlier this year.

The agencies issued a final rule, effective upon publication in the Federal Register, allowing financial institutions to temporarily defer appraisals and evaluations for residential or commercial real estate transactions for up to 120 days during the COVID-19 national emergency. This temporary relief will expire on Dec. 31, 2020. The rule does not apply to real estate acquisition, development and construction loan transactions, and the final rule provided more clarity about which loans fall under that category.

The agencies also finalized a rule intended to facilitate banks’ participation in the Paycheck Protection Program Liquidity Facility and the Money Market Mutual Fund Liquidity Facility by allowing them to neutralize the effects of their participation for purposes of the liquidity coverage ratio. Under the existing liquidity coverage ratio rule, banks are required to hold a buffer of high-quality liquid assets to meet short-term liquidity needs. This action by the agencies effectively exempts MMLF or PPPLF funding from the LCR calculation. The rule takes effect 60 days after publication in the Federal Register. Read the appraisal final rule. Read the LCR final rule

Most Powerful Women in Banking Event Open to Financial Services Community

The Most Powerful Women in Banking honorees are leading resilient, growing businesses and organizations in the face of some of the most uncertain times in financial services. These senior executives are at the forefront of the biggest ideas driving the industry—and our world—while bringing along the next wave of women leaders.

For the 18th year, financial services leaders will come together to honor the Most Powerful Women in Banking and demonstrate their commitment to driving real outcomes for diversity, equity and inclusion. For the first time, this event will be a world-class virtual experience open to the entire financial services community on Oct. 6-8.

The event will include panels and discussions with honorees ranging from the future of retail banking to personal success stories, interactive peer-to-peer networking, Q&A sessions and roundtable discussions to give participants the opportunity to connect and contribute. See the agenda and register.

Racism and the Economy: A New Virtual Event Series

Racism forms the foundation of inequality in our society; it limits opportunity for people of color and threatens the health of our economy. While the global pandemic has intensified racial and economic disparities, the killing of George Floyd has provoked people from all walks of life to address the systems and structures that enable and perpetuate these outcomes.  

Presented in partnership by the Federal Reserve Banks of Minneapolis, Atlanta and Boston, “Racism and the Economy” is a virtual event series that brings together community, business and academic leaders to examine the economic impact of racism and advance bold ideas and concrete actions to achieve an economy that makes opportunity available to everyone.  

The kickoff event on Wednesday, Oct. 7, from 12 to 2:30 p.m. CDT, will be the first in a series over the next several months exploring context and actions to address systemic racism in employment, housing, education, criminal justice and other topics. Learn more and register.

Loan Portfolio Stress Testing in a Pandemic World

The coronavirus and subsequent government stimulus programs have had huge implications on the banking industry over the past six months.  Understanding the underlying risk and the potential losses in your loan portfolio are critical as we move forward in this new normal environment.  Ensuring reserves are adequate will be imperative going forward as institutions struggle to maintain current ROA performance in a low rate environment.  

The Graduate School of Banking at Wisconsin will hold the hot-topic webinar "Loan Portfolio Stress Testing in a Pandemic World" on Thursday, Oct. 8, at 2 p.m. CDT. The hour-long session will review how COVID-19 is currently impacting credit risk in your loan portfolio and then discuss stress testing techniques that can be used to help identify problem areas and better understand potential reserve needs going forward.

The  webinar's target audience is CEOs, CFOs, ALCO members, controllers, chief risk officer, chief retail and funding officers. The cost for the seminar is $225, and the recording will be available through Jan. 8, 2021. Learn more and register.

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Contact Alisa Bousa, SDBA, at 605.224.1653 or via email.