April 23, 2020

MBA Document Addresses How To Protect Employees, Customers During ‘Re-Opening’

As businesses prepare to reopen across the state, there are many factors to consider when determining when and how to begin “re-opening” your bank to the public. So many moving parts will mean this process will look different from county to county and, in some cases, city to city. MBA has developed a document (requires MBA password) with various questions and resources that bankers should use in their discussions with their leadership about how to best approach this challenge while keeping employees and customers safe.

How Can MBA Help Protect Your Employees and Customers?

Banks have never stopped working during this crisis. However, as our country considers how to go “back to work,” we know you have questions about how to best proceed for your employees and customers. What do you need to know as you prepare to resume normal operations? Send your questions to MBA, and we will do our best to provide resources to assist you.

House Approves Additional PPP Funds, President To Sign Imminently

By a strong bipartisan vote, the House cleared legislation today providing more than $320 billion in new funding for the Small Business Administration’s Paycheck Protection Program. The Senate passed the bill earlier this week, and President Trump is expected to sign it shortly.

Of the more than $320 billion appropriated for PPP loans, a minimum of $30 billion will be set aside for community development financial institutions, banks and credit unions with less than $10 billion in assets. Another $30 billion at least will go to banks and credit unions with assets between $10 billion and $50 billion. (Institutions in these categories may originate PPP loans above these levels.) The bill also includes an additional $60 billion in funding for the SBA’s Economic Injury Disaster Loan program and provides long-sought clarity that agricultural businesses may apply for EIDL funds.

Fed To Disclose Borrowers, Loans Made In CARES Act-Funded Facilities

The Federal Reserve today announced plans for monthly disclosures of participants in its lending facilities backed by funds authorized by the CARES Act, including two facilities in the Main Street Lending Program. The Fed said it would report: 
  • the names and details of participants in each facility
  • the amounts borrowed and interest rates charged
  • overall costs, revenues and fees for each facility
The Fed said it will make these reports for all facilities established by Section 13(3) and capitalized by equity investments made by the Treasury Department under the CARES Act. In addition to the MSLP, these facilities include those providing liquidity to municipalities and large corporations.

Since the Fed’s Paycheck Protection Program Liquidity Facility was not capitalized by Treasury investments because of PPP loans’ guaranteed status under the CARES Act, it was unclear whether the Fed would make more frequent disclosures than the reporting to Congress required by law for all Section 13(3) facilities.

Managing COVID-19 Transmission Risk In The Bank Environment

As scientists and public health experts learn more about how the novel coronavirus spreads and how patients contract COVID-19, attention has turned to the risks of surface transmission. Banks have looked how to prevent transmission via materials like ATM keypads and paper currency.

On the latest episode of the ABA Banking Journal Podcast, Paul Benda with the American Bankers Association summarizes the latest science on how COVID-19 is transmitted and explores prudent steps for banks to minimize that spread. And with banks in some places beginning to plan for a return to branch lobby operations, Benda provides suggestions on configuring HVAC systems to minimize the risk of airborne viral transmission via droplets or aerosols.

Missouri Treasurer Announces CARES Act Funds Information Portal

Missouri State Treasurer Scott Fitzpatrick today announced the creation a CARES Act funds information portal. Fitzpatrick is leading an informal working group created by Gov. Mike Parson to make recommendations for the use of federal funding provided for COVID-19-related costs under the CARES Act. This group will study and analyze the federal relief available to Missouri, its citizens and businesses to identify best practices and procedures to apply that relief.

“As we begin to assess the newly released federal guidance on the use of the funding from the CARES Act, we are working to make this process as transparent as possible,” Fitzpatrick said. “My hope is that aggregating this information in one public place will allow Missouri citizens to feel confident that we are working to support our local communities and the state as a whole.”

FHFA: FHLBs May Purchase PPP Loans As Collateral For Advances

With Congress poised to approve additional funding for the Small Business Administration’s Paycheck Protection Program as early as today, the Federal Housing Finance Agency confirmed today that Federal Home Loan Banks may accept PPP loans as collateral when making advances to their member banks. This move, the latest in a series of actions by the FHFA to support lending during the pandemic, is intended to provide additional liquidity for small banks as they work to meet the needs of small businesses in their communities.

The American Bankers Association noted there are limitations of the usefulness of this action, because a haircut of at least 10% taken by the FHLBs that will reduce the overall value of collateral, as noted in a list of conditions released by FHFA. In addition, members pledging collateral must have a CAMELS rating of 3 or better or a member credit ranking in the top 60% of FHLB’s member rating systems. FHLB member banks may pledge a maximum of $5 billion in PPP loans in collateral to their FHLB.

ABA continues to support provisions offered by the FHLBs to expand collateral options, including PPP loans, in future legislation.

ABA Web Page Helps Consumers Open Bank Accounts Online, Receive EIPs

With the U.S. Treasury continuing to issue economic impact payments to tens of millions of Americans, ABA is working to help unbanked consumers open bank accounts so they can receive CARES Act payments electronically. The association recently unveiled a new webpage where consumers can find a partial list of institutions offering accounts that can be opened online and funded with an EIP. Banks offering digital account openings can respond to a very short survey to be featured on the webpage.

Secret Service Notice Describes Features Of Legitimate Economic Impact Payment Checks

As the Treasury Department prepares to issue paper checks to economic impact payment recipients, the U.S. Secret Service released a notice for consumers, retailers and financial institutions with tips for identifying a legitimate, government-issued check. The notice pointed out several markings and security features, including the Treasury seal, the use of bleeding ink, ultraviolet overprinting, microprinting and the location of the words “Economic Impact Payment President Donald J. Trump,” that signal that a check is legitimate.

The notice also directs individuals, banks and others to report suspected check fraud to local law enforcement, a Secret Service Field Office, the Treasury Department, the Internet Crime Complaint Center and others.

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