February 11, 2021 

SBA Report: $101 Billion In PPP Loans Approved In 2021 

Since the start of the year to Feb. 7, the Small Business Administration has approved 1.3 million loans totaling $100.9 billion through its Paycheck Protection Program, according to new figures. In Missouri, more than 36,950 loans totaling more than $1.9 billion were approved.

A total of 4,161 banks were participating in the 2021 program at the time the report was issued, and banks accounted for 93% of PPP lending in 2021.

In 2021, 69.7% of all loans made so far were amounts under $50,000. Overall, the average loan size was $78,000. About half of the funds allocated so far have gone to four sectors: accommodation and food services; professional, scientific and technical services; construction; and manufacturing. Since the start of the program, $623 billion has been approved for 6.43 million loans from 5,468 lenders, according to SBA. 

Fed Extends Rule Allowing Directors, Shareholders To Apply For PPP Loans

The Federal Reserve said it would extend a temporary exemption from Regulation O to allow bank directors and shareholders to receive Paycheck Protection Program loans from their related banks. Reg O generally limits lending activity to bank directors, shareholders, officers and businesses owned by these persons.

The exception, which applies only to PPP loans, will be extended through March 31. The Fed added that any PPP loans extended to bank directors and shareholders must conform to the Small Business Administration’s guidance, which states that the eligible business must follow the same process as any similarly situated customer or account holder and must not receive favoritism from the bank. 

ABA Condemns Latest NCUA Proposal To Loosen Credit Union Field Of Membership Rules

The American Bankers Association strongly opposed a proposal by the National Credit Union Administration that would expand the definition of “service facility” and erase the distinction between service to select groups and service to underserved areas as delineated in the Federal Credit Union Act.

In a letter to NCUA, ABA noted that the proposal would undermine congressional intent to demand a heightened standard of in-person service for underserved communities and called for the proposal to be withdrawn. ABA also raised concerns that the proposal would consider counting a credit union website or mobile banking application as a “service facility,” potentially paving the way for national online fields of membership.

The association added that the proposal “has no reasonable basis in law or regulation and improperly expands the available field of membership for multiple common bond federal credit unions at the expense of providing financial services to underserved areas, including low- to moderate-income communities.”

ABA Joins Housing, Civil Rights Groups Calling For Homeowner Aid

The American Bankers Association joined a broad coalition of housing and civil rights organizations in a letter urging lawmakers to include $25 billion in direct assistance to struggling homeowners in the next COVID-19 relief bill. The groups requested that the majority of these funds be distributed through state housing finance agencies and that lawmakers earmark at least $100 million for housing counseling and $39.7 million for the Fair Housing Initiatives Program.

“The COVID-19 pandemic and ensuing economic crisis are devastating homeowners, particularly in communities of color which have not yet recovered from the 2008 Great Recession,” the groups noted, adding that of an estimated 3.8 million borrowers who are currently past due on their mortgages, more than half are nonwhite.

The groups endorsed the creation of a Homeowner Assistance Fund, which would be modeled after the Hardest Hit Fund created after the last financial crisis. The fund would “enable state housing finance agencies to help homeowners with COVID-19 hardships, including providing direct assistance with mortgage payments, helping people get into affordable loan modifications, and assisting with utility payments, property tax and insurance payments, homeowner association dues and other support to prevent the loss of home equity, mortgage delinquency, default, foreclosure, or loss of utility services.”

The groups also called for additional funding for HUD-approved housing counseling agencies and legal assistance. “A critical lesson of the Great Recession is that the communities most impacted need targeted, early intervention,” they wrote. “Acting now to include these key provisions in the pending COVID-19 relief package will help stem what could be a damaging housing crisis in the U.S. concentrated in low-income communities and communities of color.”

ABA, Financial Trade Groups Support Customer Access, Sharing Of Financial Records

The American Bankers Association and a coalition of financial trade associations voiced their support for allowing customers to access financial records and to share that data securely. In a letter to the Consumer Financial Protection Bureau responding to an advance notice of proposed rulemaking on consumer access to financial records, the groups urged the bureau to maintain a principles-based approach to sharing data and emphasized the importance of ensuring consumers remain protected when they choose to share their financial data.

The groups added that the bureau’s 2017 set of principles on responsible sharing of consumer data have served as a “flexible bedrock for industry collaboration” and that “the evolving financial marketplace should have evolving standards that protect consumers while promoting innovation.” A more prescriptive approach “may undermine the progress that has already taken place and risks leaving consumers exposed if undertaken too narrowly,” the groups wrote.

In a separate letter to the bureau, ABA noted there are steps the bureau can take to ensure that bank customers can control their financial data and benefit from financial innovation, including ensuring that core providers offer community banks the tools to facilitate secure data sharing; bringing data aggregators under direct supervision; and requiring aggregators to periodically reconfirm consumer authorization to access their accounts.

Freddie Mac, Fannie Mae Issue Guidance On COVID-19 Relief Extensions

Following an announcement from the Federal Housing Finance Agency extending forbearance on GSE-backed mortgages for up to an additional three months, Freddie Mac issued guidance on how it will implement the extension. Borrowers on an active COVID-19 forbearance plan as of Feb. 28, 2021, may be eligible for the additional forbearance period. Fannie Mae also issued eligibility guidance for borrowers who may qualify for additional three months of forbearance, stating the borrower must be on a COVID-19 forbearance plan.

Both GSEs also clarified that there is no limit on the number of COVID-19 payment deferrals a borrower may receive. However, no more than 15 missed payments may be deferred as result of COVID-19 payment deferrals for the life of the loan.

In addition, pursuant to the FHFA’s announcement that it would extend the existing foreclosure moratorium, Freddie Mac and Fannie Mae directed servicers to suspend all foreclosure activities, including foreclosure sales, through March 31.

FHFA Extends Loan Processing Flexibilities For GSEs

The Federal Housing Finance Agency said it would extend until March 31 certain previously announced loan processing flexibilities

These flexibilities, which were set to expire at the end of this month, include allowing alternative appraisals on purchase and rate term refinance loans, alternative methods for documenting income and verifying employment before loan closing and expanding the use of power of attorney and remote online notarizations to assist with loan closings.

OCC Releases Libor Transition Self-Assessment Tool

As banks prepare for the forthcoming cessation of the London Interbank Offered Rate, the Office of the Comptroller of the Currency released a self-assessment tool for banks to evaluate their preparedness for transitioning away from Libor to an alternate reference rate, such as the Secured Overnight Financing Rate.

The tool can be used to determine the appropriateness of a bank’s transition plan and assess bank management’s execution of the transition plan, as well as oversight and reporting. OCC noted that Libor transition plans should be risk-based and may not need to include all points included in the self-assessment. The agency added that banks should be working toward resolving replacement rate issues while communicating with affected customers and third parties. 

Acting CFPB Director Seeks To ‘Preserve Status Quo’ On QM, Debt Collection

Acting Consumer Financial Protection Bureau Director Dave Uejio signaled that the bureau may move to reconsider recent final rulemakings on Qualified Mortgages and debt collection. In a letter outlining his priorities for the bureau’s Division of Research, Markets and Regulations, Uejio directed bureau staff to “explore options for preserving the status quo with respect to QM and debt collection rules.”

He also expressed his commitment to implement Section 1071 of the Dodd-Frank Act, which concerns the collection of credit application data for women-owned, minority and small businesses, “without delay.”

In addition, Uejio asked RMR to focus its mortgage servicing rulemaking on addressing a potential foreclosure crisis that could arise when COVID-19 forbearances expire. He also called for reports on housing insecurity consumer finance barriers to racial equity and for the resumption of data collections that were paused at the beginning of the pandemic, including Home Mortgage Disclosure Act quarterly reporting and CARD Act data collection.

OCC To Host Virtual Innovation Office Hours

The Office of the Comptroller of the Currency will host virtual innovation “office hours” March 17-18. These sessions are one-on-one, hour-long meetings with representatives from the OCC's office of innovation to discuss fintech, new products or services, partnerships with fintech companies or other matters related to responsible innovation.

Institutions wishing to participate should request a session by Monday, Feb. 22, and provide information on the topics they are interested in discussing.

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