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The Honorable Mitch McConnell |
The Honorable Chuck Schumer Minority Leader United States Senate 322 Hart Senate Office Building Washington DC 20510 |
| The Honorable Nancy Pelosi Speaker United States House of Representative Washington, D.C. 20515 |
The Honorable Kevin McCarthy Minority Leader United States House of Representative Washington, D.C. 20515 |
Dear Majority Leader McConnell, Minority Leader Schumer, Speaker Pelosi, and Minority Leader McCarthy:
On behalf of the Independent Community Bankers of America and the undersigned state banking associations representing over 50,000 community bank locations across the nation, we write to urge you to include our recommendations in the next legislative package to create relief for American small businesses impacted by COVID-19 and the millions of people they employ.
These recommendations were developed in consultation with community bankers from across the country representing rural, suburban, and urban markets. ICBA’s June 24 letter to Congress provides a fuller explanation and rationale for these recommendations.
Simplified Forms and Procedures for Paycheck Protection Program Loan Forgiveness. We strongly support S. 4117, introduced by Senator Kevin Cramer, which would create a presumption of compliance and forgiveness for PPP loans with an original balance of $150,000 or less based on the borrower’s certification that the funds were used in accordance with the terms of the program. Protections against fraud and misrepresentation would still apply.
In addition, Congress should create a straightforward, easy-to-apply approach to loan forgiveness, which should include an online PPP loan forgiveness calculator provided or certified by Treasury and the Small Business Administration (SBA). The Calculate PPP Forgiveness Act (H.R. 7413/S. 4171) would provide for such a calculator.
SBA Purchase of Residual PPP Loans at Par. After the forgiveness amount of a PPP loan has been determined, the SBA should purchase the remaining loan at par from originating institutions.
Preserve Expense Deduction for PPP Borrowers. Allow PPP borrowers that also obtain loan forgiveness to deduct payroll and other business expenses, as provided for by the Small Business Expense Protection Act of 2020 (S. 3612/H.R. 6821).
Bank Capital and Accounting Relief. Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances. Banks’ strong capitalization at the beginning of the crisis means that capital and accounting can be implemented without compromising safety and soundness. Our recommendations include:
Liability Protection. Create a liability safe harbor for businesses from COVID-19-related lawsuits. Community banks and small businesses have strong incentives to ensure the safety of their employees and customers. Fear of opportunistic class actions or other suits will inhibit the restoration of economic activity and potentially transfer wealth from employers to trial lawyers.
Support Agricultural Lending. Allow interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt as provided for in the Enhancing Credit Opportunities in Rural America (ECORA Act, H.R. 1872/S. 1641).
Expand Employee Retention Tax Credit. We support the Jobs Credit Act of 2020 (H.R. 6776), which would expand the Employee Retention Tax Credit (ERTC) created by the CARES Act. We further recommend that the ERTC be available to businesses that have been deemed essential, such as banks that have closed their lobbies to the public.
Industrial Loan Company Moratorium. We urge Congress to enact a moratorium of at least three years on the FDIC’s approval of deposit insurance applications for ILCs. A three-year moratorium was included in the Dodd-Frank Act as an appropriate response to a highly uncertain economic environment.
Mortgage Lending. We urge Congress to extend the government sponsored enterprises’ qualified mortgage patch to January 2022 to help avoid additional disruption to the housing market. We support aid to state and local Housing Finance Agencies for helping borrowers with mortgage payments, forbearance, and loan modifications. The Federal Reserve should establish a liquidity facility for all mortgage servicers.
Support for Local Regions. Raise current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects.
Financial Assistance to the Farm Sector. Provide additional direct financial assistance to farmers, ranchers and others involved in the food sector.
Enhance USDA Guaranteed Lending Programs. Increase funding and loan limits for USDA direct and guaranteed loan programs. Allow the Farm Services Agency (FSA) to reimburse borrowers for guaranteed loan fees through 2021. Temporarily suspend term limits on FSA direct operating loans through 2021.
Thank you for your consideration. We look forward to continuing to work with you to sustain the American economy as the ongoing crisis.
Sincerely,
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Independent Community Bankers of America |
Alabama Bankers Association |
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Arkansas Community Bankers |
Arizona Bankers Association |
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California Community Banking Network |
Connecticut Bankers Association |
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Independent Bankers of Colorado |
Florida Bankers Association |
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Community Bankers Association of Georgia |
Community Bankers of Iowa |
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Idaho Bankers Association |
Community Bankers Association of Illinois |
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Indiana Bankers Association |
Community Bankers Association of Kansas |
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Bluegrass Community Bankers Association |
Louisiana Bankers Association |
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Massachusetts Bankers Association, Inc. |
Maryland Bankers Association |
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Community Bankers of Michigan |
Independent Community Bankers of Minnesota |
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Missouri Independent Bankers Association |
Mississippi Bankers Association |
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Montana Independent Bankers |
Independent Community Banks of North Dakota |
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Nebraska Independent Community Bankers |
New Hampshire Bankers Association |
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New Jersey Bankers Association |
Independent Community Bankers Association of New Mexico |
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Independent Bankers Association of New York State |
North Carolina Bankers Association |
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Community Bankers Association of Ohio |
Community Bankers Association of Oklahoma |
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Oregon Bankers Association |
Pennsylvania Association of Community Bankers |
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Independent Banks of South Carolina |
Independent Community Bankers of South Dakota |
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Tennessee Bankers Association |
Independent Bankers Association of Texas |
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Virginia Association of Community Banks |
Community Bankers of Washington |
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Wisconsin Bankers Association |
Community Bankers of West Virginia |
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Wyoming Bankers Association |
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CC:
Secretary of the Treasury Steven Mnuchin
Deputy Secretary of the Treasury Justin Muzinich
Small Business Administration Administrator Jovita Carranza
Federal Reserve Board Chairman Jerome Powell
Members of the U.S. House of Representatives
Members of the United States Senate