Paycheck Protection Program

Lawmakers need to create a coronavirus relief program targeting owners of smaller businesses facing more hardship than larger competitors that received much of the aid from the Paycheck Protection Program.

It includes simpler Paycheck Protection Program forgiveness and a consistent approach from federal regulators to reforming the Community Reinvestment Act, says Bank of America's Christine Channels, who chairs the Consumer Bankers Association's board.

The end date for the Paycheck Protection Program Loan Facility was moved from Dec. 31 to March 31, giving lenders more time to line up the liquidity needed to buy and sell portfolios.

New analysis from S&P shows credit unions near $1 billion of assets and above continuing to dominate the industry's performance in the Paycheck Protection Program as some CUs dedicate a substantial portion of their portfolios to the effort.

Though there is some optimism about an economic recovery, two-thirds of respondents said they expect revenue to be flat of down next year and just 13% plan to be in hiring mode.

The latest bipartisan plan to accelerate the economic recovery would appropriate roughly $300 billion for the Paycheck Protection Program, but the legislative package still faces long odds in the divided Congress.

Lenders are worried that the Small Business Administration could use borrower responses to deny forgiveness for many Paycheck Protection Program loans that exceed $2 million.

Community banks that were pushed past key asset limits by the Paycheck Protection Program say they will be unable to shrink their balance sheets back to normal size by the 2022 deadline, especially if there is a new round of rescue aid.

Participation in the Paycheck Protection Program and other emergency lending during the pandemic has swelled many small banks’ balance sheets. Federal regulators are giving them a temporary pass on supervisory requirements tied to their size.

Lenders want Congress to bring back incentives used during the last recession, such as bigger subsidies and reduced fees, to jump-start participation in the Small Business Administration's flagship 7(a) program.