By Paul Merski
Community bankers have hit the ground running this year with another round of Paycheck Protection Program lending, Economic Impact Payment processing, and the everyday business of supporting local communities during the pandemic.
But it is worth taking a moment to reflect on community bankers' success in achieving much-needed emergency provisions in the end-of-year stimulus package. After months of intense lobbying and grassroots outreach, many of ICBA’s priority provision have been signed into law via the Economic Aid Act.
What We Did Together
We kept the community bank message alive and well in Washington in 2020 with a prolific year in community bank grassroots advocacy. As reported in ICBA's recent "2020 in Review" advocacy report, more than 9,000 community bankers sent more than 65,000 messages to Congress and federal regulators last year, including 480 congressional offices.
While ICBA maintains a constant presence with policymakers in Washington, community bank outreach is the difference-maker. And the results speak for themselves.
What We Achieved Together
The stimulus package signed into law at the end of December includes numerous ICBA-advocated provisions benefitting community bank customers and communities. Among its provisions, the bill:
- Simplifies Paycheck Protection Program loan forgiveness.
- Establishes a lender "hold harmless" provision for PPP loans.
- Fully forgives Economic Injury Disaster Loan advances.
- Supports a new round of PPP lending.
- Allows tax deductibility of business expenses paid with PPP funds.
- Extends troubled debt restructuring relief.
- Extends the CECL delay.
- Improves SBA 7(a) lending terms with lower fees and higher guaranty.
- Provides needed agricultural sector support.
Additionally, one of the last acts of the 116th Congress was to enact ICBA-advocated BSA/AML reforms as part of the defense spending bill, including beneficial ownership reporting by small businesses directly to FinCEN.
While some provisions will require further rulemaking by federal regulators, others are in effect now.
For instance, the provision forgiving EIDL advances to ensure they are not deducted from PPP loan forgiveness amounts is effective immediately and retroactive. However, the SBA will need to determine how it will make whole those borrowers that already received forgiveness payments with the EIDL amount deducted.
More information on the stimulus package's community banking provisions is available in an ICBA summary. Meanwhile, the Independent Bankers Association of Texas offers a helpful matrix of PPP updates, while the SBA and Treasury have pages dedicated to information and resources on the next round of PPP lending.
ICBA will continue offering additional information and resources on the details of these stimulus provisions. Advocacy works, and we thank community bankers for their tireless efforts last year, which will remain crucial in what is sure to be a busy 2021. Happy New Year!