ICBA-Backed Bill Stops Unintended Regulations from PPP Lending

Oct. 26, 2020

ICBA Press Release Banner 2020

Washington, D.C. (Oct. 26, 2020) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on ICBA-advocated legislation to prevent regulatory penalties on community banks due to their Paycheck Protection Program lending.

"ICBA and the nation's community banks support new legislation introduced by Reps. Barry Loudermilk (R-Ga.) and David Scott (D-Ga.) that would prevent regulatory penalties for community banks with $15 billion or less in total assets due to their Paycheck Protection Program lending.

"The Preventing Regulatory Penalties for PPP Lenders Act (H.R. 8675) directs regulators to exclude PPP loan balances from bank and bank holding company regulatory thresholds within 30 days. This would prevent PPP lenders from crossing asset-size thresholds and incurring additional burdens and costs simply due to PPP assets.

"As ICBA has told Congress and federal regulators since August, the surge of PPP loans has swelled the balance sheets of community banks, inadvertently subjecting them to additional supervision, regulations, and costs. According to Small Business Administration data, community banks made nearly 2.8 million in PPP loans—nearly 60 percent of the program's total—which saved an estimated 33.7 million jobs.

"The House bill follows the FDIC's release of an ICBA-advocated interim final rule that allows community banks to use their 2019 asset sizes for 2021 auditing and reporting requirements under Part 363, allowing some 290 community banks to avoid new regulatory costs caused by PPP lending.

"Together, these efforts will ensure community banks will not be inadvertently punished with higher regulatory costs for their tireless response to the challenges of the coronavirus pandemic in local communities nationwide."

About ICBA

The Independent Community Bankers of America creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, over $4.4 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.

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