Paycheck Protection Program Loans Hit Two-Thirds of Allocation
As of close of business April 13, 959,000 Paycheck Protection Program loan applications have been approved by the Small Business Administration. This reflects $232 billion in credit extended through nearly 4,600 lending organizations. That total represents 66% of the $350 billion apportioned to this program by the CARES Act. Meanwhile, a Trump Administration request to up the total by $250 billion is stalled in the Senate.
Banks Hammered for Slow Small-Business Lending Response
The government has been criticized for the hastily designed Paycheck Protection Program, but banks are now coming in for pushback too. In a CNBC Squawk Box interview, high-profile entrepreneur and Shark Tank investor Mark Cuban said that banks are throwing up too many hurdles for what should be hurry-up loans that the government will guarantee if the company maintains its employees.
BofA Cleared by Judge to Favor Own Customers for PPP Loans
The megabank had been sued by small businesses who were rejected for Paycheck Protection Program loans because they weren’t customers. A U.S. District Court judge rejected a request for a temporary ban on this practice noting that the law didn’t impose prohibitions on what lenders may do. The plaintiffs said they will appeal, according to Yahoo Finance.
‘We’re Giving Payment Relief on Everything, Including Mortgages’
If you want (or need) a message of dedication and the power of cooperation, read “One Credit Union CEO (And Dad) Gives Some Fantastic Advice About Covid-19.” Financial Marketer Meredith Olmstead interviews her father, Marshall Boutwell, CEO of Peach State Federal Credit Union. In addition to the headline quote, Boutwell talks about the positive impact of the crisis on the institution’s staff.
OCC to Hold Three ‘Listening Sessions’ On PPP Issues
The Office of the Comptroller of the Currency will hold a series of sessions to hear from banks and fintechs on three issues related to the Paycheck Protection Program. Topics and dates are: Payroll verification – April 16; Fraud identification – April 20; Backend processes – April 21. Registration is by email found in the news release.
Bank Survey Tallies Massive Consumer Impact
A survey conducted the week of March 30 by The First National Bank of Omaha confirms the sobering economic effect of the pandemic: Nearly three in five consumers (59%) have experienced a loss of income and just over half (52%) don’t have enough savings to cover three month’s expenses without income.
Fed Offers More Coronavirus Lending Aid
On April 9 the Federal Reserve introduced elements of its CARES Act duties. Among them are the Main Street Lending Program and the Paycheck Protection Program Lending Facility. The latter would provide term loans to lenders secured by PPP credits. It would enable the lenders to have additional liquidity.
( Read More: Banking Must Support Small Businesses Beyond Providing Loans )
Financial Health Group Pushes for Overdraft and NSF Waivers
A white paper from the Financial Health Network argues that during the crisis many lower-income consumers will inadvertently overdraw their accounts. Financial institutions that apply their usual fees may find themselves eating into the consumers’ federal stimulus payments. The paper urges institutions to take the long view in their treatment of overdrafts and NSFs during the crisis. Not doing so could impact their future reputations and relationships. (pdf)
CFPB Prepaid Card Rule Will Help Speed Consumer Stimulus Payments
The Consumer Financial Protection Bureau issued an interpretive rule to enable the federal government to issue CARES Act stimulus payments via prepaid card instead of by check. This would be for recipients without banking accounts or whose account data has not been provided to the government. The rule essentially waives Regulation E requirements that recipients of public financial aid be offered the option of receiving a check.
How Other Industries Are Coping With COVID-19
Mintel’s report, “COVID-19 in the US: How Consumers and Industries Are Reacting Now,” may give bank and credit union executives a fresh idea or two from experts in retail and ecommerce, travel and transportation, and other non-financial fields. One example: A section on telehealth appointments, which provides a sense of how remote banking advice might work.