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ICBA Sends Urgent Payment Protection Program Recommendations to Treasury and SBA

ICBA Press Release Banner 2020

Washington, D.C. (April 5, 2020)—The Independent Community Bankers of America (ICBA) sent a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza early this morning laying out urgent recommendations for the Paycheck Protection Program so that every community bank across the nation has the capability to access the system and help their customers during this critical time.

“At this time, nearly 48 hours after the Program went live, hundreds of lenders are still trying to get approval to access the SBA system so they can process loans,” ICBA President and CEO Rebeca Romero Rainey said in the letter. “I would like to share with you what we are hearing from out in the field and our urgent recommendations for ongoing adjustments and enhancements to the Program to improve access for all community banks.”

On behalf of the nation’s community banks and their 52,000 locations throughout rural, suburban and urban America, ICBA urged the following:

  • Support and enhance the overburdened Small Business Administration systems. Without a more robust intake process, American small businesses in many parts of the country will not receive and deploy the funds intended for them. Even those banks with access to the E-Tran system have shared their experiences of significant challenges with user access and latency in application processing.
  • Increase program funds. Funding of $349 billion is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly. Without adequate scale, the Program cannot meet its potential.
  • Allocate at least 25 percent of existing $349 billion Program funds and future funds for banks of $50 billion in asset size or less, consistent with their share of industry assets. Community banks serve markets not served by the large banks. To ensure Program access to all communities and regions of the nation, Treasury and SBA cannot allow Program funds to be used nearly exclusively by the largest banks.
  • As quickly as is practical, Treasury and the Federal Reserve should launch a secondary market facility to purchase Program loans from originating institutions. This program should not be limited by the balance sheet capacity of participating lenders. This concept works well in the American mortgage market and should be replicated to meet Program loan demand in this crisis. Notably, the TALF program offered by the Federal Reserve worked well in the last crisis. It should be reinstated for the quick securitization of Program loans. The Federal Reserve should also provide advances against Program loans to further enhance the capacity of the Program.

“We are fully committed to working with you to implement these recommendations and create a Program that will achieve its full potential,” Romero Rainey said. “I assure you that community bankers will make broad use of the Program if properly crafted and with the scale necessary for the historic task at hand.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org. 

ICBA Sends Urgent Payment Protection Program Recommendations to Treasury and SBA

ICBA Press Release Banner 2020

Washington, D.C. (April 5, 2020)—The Independent Community Bankers of America (ICBA) sent a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza early this morning laying out urgent recommendations for the Paycheck Protection Program so that every community bank across the nation has the capability to access the system and help their customers during this critical time.

“At this time, nearly 48 hours after the Program went live, hundreds of lenders are still trying to get approval to access the SBA system so they can process loans,” ICBA President and CEO Rebeca Romero Rainey said in the letter. “I would like to share with you what we are hearing from out in the field and our urgent recommendations for ongoing adjustments and enhancements to the Program to improve access for all community banks.”

On behalf of the nation’s community banks and their 52,000 locations throughout rural, suburban and urban America, ICBA urged the following:

  • Support and enhance the overburdened Small Business Administration systems. Without a more robust intake process, American small businesses in many parts of the country will not receive and deploy the funds intended for them. Even those banks with access to the E-Tran system have shared their experiences of significant challenges with user access and latency in application processing.
  • Increase program funds. Funding of $349 billion is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly. Without adequate scale, the Program cannot meet its potential.
  • Allocate at least 25 percent of existing $349 billion Program funds and future funds for banks of $50 billion in asset size or less, consistent with their share of industry assets. Community banks serve markets not served by the large banks. To ensure Program access to all communities and regions of the nation, Treasury and SBA cannot allow Program funds to be used nearly exclusively by the largest banks.
  • As quickly as is practical, Treasury and the Federal Reserve should launch a secondary market facility to purchase Program loans from originating institutions. This program should not be limited by the balance sheet capacity of participating lenders. This concept works well in the American mortgage market and should be replicated to meet Program loan demand in this crisis. Notably, the TALF program offered by the Federal Reserve worked well in the last crisis. It should be reinstated for the quick securitization of Program loans. The Federal Reserve should also provide advances against Program loans to further enhance the capacity of the Program.

“We are fully committed to working with you to implement these recommendations and create a Program that will achieve its full potential,” Romero Rainey said. “I assure you that community bankers will make broad use of the Program if properly crafted and with the scale necessary for the historic task at hand.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org. 

More Press Releases

ICBA Sends Urgent Payment Protection Program Recommendations to Treasury and SBA

ICBA Press Release Banner 2020

Washington, D.C. (April 5, 2020)—The Independent Community Bankers of America (ICBA) sent a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza early this morning laying out urgent recommendations for the Paycheck Protection Program so that every community bank across the nation has the capability to access the system and help their customers during this critical time.

“At this time, nearly 48 hours after the Program went live, hundreds of lenders are still trying to get approval to access the SBA system so they can process loans,” ICBA President and CEO Rebeca Romero Rainey said in the letter. “I would like to share with you what we are hearing from out in the field and our urgent recommendations for ongoing adjustments and enhancements to the Program to improve access for all community banks.”

On behalf of the nation’s community banks and their 52,000 locations throughout rural, suburban and urban America, ICBA urged the following:

  • Support and enhance the overburdened Small Business Administration systems. Without a more robust intake process, American small businesses in many parts of the country will not receive and deploy the funds intended for them. Even those banks with access to the E-Tran system have shared their experiences of significant challenges with user access and latency in application processing.
  • Increase program funds. Funding of $349 billion is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly. Without adequate scale, the Program cannot meet its potential.
  • Allocate at least 25 percent of existing $349 billion Program funds and future funds for banks of $50 billion in asset size or less, consistent with their share of industry assets. Community banks serve markets not served by the large banks. To ensure Program access to all communities and regions of the nation, Treasury and SBA cannot allow Program funds to be used nearly exclusively by the largest banks.
  • As quickly as is practical, Treasury and the Federal Reserve should launch a secondary market facility to purchase Program loans from originating institutions. This program should not be limited by the balance sheet capacity of participating lenders. This concept works well in the American mortgage market and should be replicated to meet Program loan demand in this crisis. Notably, the TALF program offered by the Federal Reserve worked well in the last crisis. It should be reinstated for the quick securitization of Program loans. The Federal Reserve should also provide advances against Program loans to further enhance the capacity of the Program.

“We are fully committed to working with you to implement these recommendations and create a Program that will achieve its full potential,” Romero Rainey said. “I assure you that community bankers will make broad use of the Program if properly crafted and with the scale necessary for the historic task at hand.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.