E-News 9-3-21

Friday, September 3, 2021
IBA Communications
Indiana Statehouse

STATE GOVERNMENT RELATIONS

Register Today for 2021 IBA Regional Meetings - First Meeting Tuesday!

Register today and join us for a series of regional meetings around the state. The IBA has implemented these meetings in an effort to facilitate grassroots communication between the bankers we serve and the legislators who serve our state. The meetings include an hour-long update on the IBA, including legislative information and advocacy opportunities. Following the update, local legislators from the Indiana General Assembly will meet for lunch with bankers from the community. This year, the IBA will be hosting 5 regional meetings, each beginning at 11:00 a.m. local time. Follow the links below for your preferred location and register today! 

Columbus
Hotel Indigo Columbus Architectural Center
Tuesday, September 7
Click here to register

Indianapolis
The Columbia Club
Thursday, September 16
Click here to register

Fair Oaks
The Farmhouse Restaurant at Fair Oaks Farms
New Date! Monday, October 4
Click here to register

Evansville
The Bauerhaus
Tuesday, October 5
Click here to register

Fort Wayne
The Landmark Centre
New Date! Monday, October 25
Click here to register
 

FEDERAL GOVERNMENT RELATIONS

Capitol buildingAction Alert: Urge Lawmakers to Oppose New IRS Reporting Rules

The Biden Administration is proposing a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Families Plan. Congress is poised to vote on inclusion of that proposal in the budget reconciliation package in the next few days. Contact your lawmakers today and express your opposition to any new IRS reporting that leads to increased compliance costs, damages your customer relationships, and threatens customer privacy. 

Contact legislators here


With Section 1071 Proposal, CFPB Outlines Plan for Collecting Small Biz Loan Data

The Consumer Financial Protection Bureau on Wednesday issued its long-awaited proposal for implementing Section 1071 of the Dodd-Frank Act, which concerns the collection of credit application data for small businesses, including women-owned and minority-owned small businesses. The extensive 913-page proposal would require lenders to report: the amount and type of small business credit applied for and extended; the race, ethnicity and sex of the small business owners; and several key elements of the price of the credit offered. A lender’s employees or officers who are involved in considering a small business application would be prohibited from accessing the business’s demographic information, unless the lender determines that such a “firewall” is infeasible.

The rule would apply to financial institutions, including banks, credit unions and nonbanks, that originate at least 25 credit transactions in each of the two preceding calendar years that meet the definition of “business credit” under Regulation B and that involve “small businesses” – which the bureau would define as businesses with $5 million or less in gross annual revenue for the business’ preceding fiscal year. Products subject to the 1071 rule would include business and agricultural-purpose loans, lines of credit, credit cards and merchant cash advances. The proposed rule does not provide an asset-based carve-out for banks or any other general exemptions for particular categories of financial institutions.

Lenders would be required to collect data on a calendar-year basis and report it to the CFPB by June 1 of the following year. They would also be required to retain evidence of compliance, including a copy of small business lending application registers, for at least three years. The bureau will make the data available annually to the public on its website, and is seeking comment on a balancing test it will apply to determine whether any information should be redacted from the public data set to protect privacy of small businesses. 

Read the proposed rule

Read the CFPB's summary of the proposal


SBA: PPP Direct Forgiveness Remains Optional but Encouraged

The Small Business Administration on Monday clarified that its Paycheck Protection Program direct forgiveness portal remains optional for lenders and borrowers, although SBA encouraged lenders to opt-in to the program, which it indicated has accepted more than 600,000 applications in under a month.

SBA sent a message clarifying a letter sent earlier on Monday through its lender portal that provoked confusion among industry participants. In particular, the letter seemed to say that lenders would need to opt into direct forgiveness to avoid audits by SBA’s Office of Credit Risk Management.

The follow-up message appeared to clarify that audits would focus on instances in which lenders may not yet be accepting forgiveness applications for 2021 PPP borrowers or in which lenders are not actively reaching out to 2021 borrowers to invite them to apply. “Given that lenders who opt-in to direct forgiveness are providing opportunities for their 2021 borrowers to submit for forgiveness, and SBA is conducting ongoing outreach, action by the Office of Credit Risk Management on this particular issue is not applicable.”


Banking Agencies Release Guide on Fintech, Community Bank Partnerships

The federal banking agencies last Friday released a guide to help community banks assess risks when considering partnerships with fintech companies. The guide focuses on six key due diligence topics, including business experience and qualifications, financial condition, legal and regulatory compliance, risk management and control processes, information security and operational resilience.

The agencies indicated community banks may use the guide when performing due diligence on prospective relationship, but added that it is voluntary and does not cover all types of third-party relationships and risks.

The guide is written from a community bank perspective, the agencies indicated, but added that the fundamental concepts may be useful for banks of varying size and for other types of third-party relationships. 

Read the guide