CBWV strives to be the leading trade association for community banks in West Virginia committed to creating and enhancing value for our members.

COVID-19 News Updates

CAPITO ANSWERS COMMUNITY BANK QUESTIONS, WORKS TO HELP LENDERS AID THEIR COMMUNITIES

CHARLESTON, W.Va. – U.S. Senator Shelley Moore Capito (R-W.Va.) today spoke with members of the Community Bankers of West Virginia (CBWV) and the West Virginia Bankers Association (WVBA) on a teleconference call. During the call, Senator Capito provided a coronavirus (COVID-19) update and answered questions on what lenders should expect given the new guidelines set in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which President Donald Trump signed into law on Friday, March 27, 2020.


The Latest on SBA's Paycheck Protection Program
ICBA President and CEO Rebeca Romero Rainey shared the latest information on the Small Business Administration's hot-button Paycheck Protection Program.

In a message to community bankers after a call with the Treasury Department and SBA, Romero Rainey offered updates on non-SBA lenders, additional forthcoming guidance, tomorrow's expected launch, and the program's interaction with Economic Injury Disaster Loans.

With today's complimentary ICBA webinar on the PPP at capacity, community bankers can pre-order a free recording of the program, which will feature The Coleman Report's Bob Coleman.

Further, ICBA staff will answer questions about the PPP and other aspects of the federal response to the COVID-19 outbreak at its next Community Bank Briefing scheduled for 11 a.m. (Eastern time) tomorrow.


"ICBA will continue to be at the table in Washington to shape this program, maximize community bank access, and keep you informed of the latest developments," Romero Rainey wrote. "Thank you again for your continued commitment to your communities as we persevere through this challenging time."

ICBA conveys concerns with new SBA program

ICBA expressed concerns with this week's Treasury Department guidelines for the Small Business Administration's Paycheck Protection Program and called on the agencies to update the guidelines before the program goes live.


In a letter to the agencies, ICBA said the guidelines do not empower all community banks to participate and meet the small-business demand. ICBA raised concerns that:
  • The 0.5 percent interest rate is below break-even for community banks. Congress allowed up to 4 percent.
  • The two-year loan terms are unreasonably short and will hamper borrowers. Congress allowed up to 10-year terms.
  • Guidelines on the use of loan proceeds are excessively restrictive.
  • The lack of detailed guidance shifts too much liability to the lender.
  • Treasury and the Federal Reserve should create a liquidity facility for community banks doing PPP loans.
"I urge you to amend the guidance so that community banks will be able to use it to help their small business partners and communities," ICBA President and CEO Rebeca Romero Rainey wrote.
 
Treasury this week released initial information and resources on the $350 billion program established by the Coronavirus Aid, Relief, and Economic Security Act. The Treasury resources and additional information are available on ICBA's Crisis Response and Preparedness Toolkit



NEWSWATCH TODAY
April 3, 2020
Sponsored by Jack Henry

Late-Breaking Updates to SBA Paycheck Protection Program

After ICBA expressed serious concerns this week about terms and needed guidance, the Treasury Department and Small Business Administration last night issued an interim final rule on the Paycheck Protection Program.

 

According to the new rule, the agencies increased the PPP interest rate to 1 percent from 0.5 percent and have provided additional clarity on lender due diligence responsibilities.

 

The rule also notes that lenders do not need to conduct verification if borrowers submit documentation supporting their requests for loan forgiveness and attest that they have accurately verified the payments for eligible costs. It says the SBA will hold harmless any lender that relies on such borrower documents and attestation, as required by the CARES Act.

 

These updates are reflected in the information pages and borrower application posted to Treasury's landing page, including a lender application form.


The update follows letters from ICBA and state banking associations expressing concerns that the interest rate is below break-even for community banks, the two-year loan terms are unreasonably short, guidelines on the use of loan proceeds are excessively restrictive, and the lack of detailed guidance shifts too much liability to the lender.
 
In a
 press briefing last night with President Trump, Treasury Secretary Mnuchin said the program will go live today and asked for “patience,” despite the limited guidance.
 
In a message to community bankers last night, ICBA President and CEO Rebeca Romero Rainey said ICBA hears their concerns about this new program and its rollout and retains a seat at the table in Washington. "ICBA is with you, will keep you informed of the latest developments, and is working on your behalf just as you are working on behalf of your communities," she wrote.

Training Schedule

The U.S. Small Business Administration's West Virginia District Office and the West Virginia Small Business Development Center will host trainings on the Economic Injury Disaster Loan program, Economic Injury Disaster Loan Advance, and the Paycheck Protection Program. 
Due to the high volume of COVID-19 loan relief questions our office is receiving, we recommend you attend any of the below sessions to learn more before calling.



ICBA Continues Updating FAQs on COVID-19 Response

ICBA continues to update its frequently asked questions on the Paycheck Protection Program and other elements of the federal response to the COVID-19 outbreak.
 
The latest updates cover recent guidance on affiliated companies, faith-based organizations, payroll requirements, and various other aspects of the PPP. These updates join numerous other FAQs on stimulus payments, mortgage lending, loan modifications, and more.
 
ICBA will continue adding to this resource to provide clarity to community bankers about the COVID-19 response programs. Meanwhile, ICBA offers a
brief summary of the community banking provisions of the CARES Act.
 
Additional resources on the COVID-19 response are available on ICBA's
Crisis Response and Preparedness Toolkit.

Potential for Selling Held-to-Maturity Securities for Liquidity Purposes

Many financial institutions are facing numerous requests from both retail and commercial customers seeking to defer scheduled loan payments as these borrowers have been financially impacted by COVID-19. At the same time, there appears to be significant loan demand from small businesses for the new Paycheck Protection Program under the SBA 7(a) Program. These forces could impact overall liquidity and funding positions. While there are plenty of traditional sources of liquidity that banks can access, and a particularly attractive opportunity as detailed in the latest Strategic Insight, a less than obvious source of liquidity may be available because of the current COVID-19 pandemic. 


Paycheck Protection Program FAQs



Additional Guidance Regarding the Paycheck Protection Program



Two Interim Final Rules Relating to Loan Forgiveness Issued by the Small Business Administration


New Paycheck Protection Program Flexibility Act to Offer Some Relief for Borrowers