COVID-19 UPDATES
PPP Forgiveness Platform Now Live
The Small Business Administration’s Paycheck Protection Program forgiveness platform is live and scheduled to begin accepting loan-forgiveness applications and decisions as of Monday, Aug. 10. An SBA user guide released last week provides details on the timeline, decision process, account management and more.
In a recent procedural notice, the SBA indicated all PPP lender authorizing officials in the CAFS/ETRAN system should have received a welcome email from PPPForgivenessRequests@SBA.gov with instructions. Officials who have not received the email can contact SBA’s PPP lender hotline at 833-572-0502.
Additional PPP guidance and resources are available on Treasury’s PPP webpage.
The forgiveness platform is live after the SBA stopped processing new PPP loan applications Saturday night, in alignment with federal law. Congress and the Trump administration are debating the future of the PPP as part of the negotiations over the next stimulus package.
Survey: P2P Payments, Card-Not-Present Drive 2019 Growth in Debit Transactions
Even before consumers’ acceleration to online shopping due to the pandemic, card-not-present (CNP) debit transactions rose 21% year-on-year in 2019, according to Pulse’s debit issuer survey released yesterday. Account-to-account debit transfers, a CNP transaction type that includes P2P payments such as Zelle and Venmo, doubled from 2018 to 2019 and accounted for 40% of total debit transaction growth.
“Card-not-present transactions already represent 27% of all debit transactions and are growing about 10 times faster than card-present transactions,” said Tony Hayes of Oliver Wyman, which conducted the study for Pulse. “That growth will surely accelerate due to a surge in e-commerce and a shift in many traditional card-present merchant categories, such as grocery and restaurants, to remote card-not-present ordering.” Debit activity in the wake of the coronavirus pandemic surged in early March as consumers stocked up on supplies, dropped by as much as 30% in mid-March as lockdown orders were imposed and rebounded partially in April and May as economic impact payments reached consumers.
Overall, Americans conducted 77.5 billion debit transactions in 2019, a 6.5% rise from the year before. The average net fraud loss per debit transaction edged up from 1.1 cents to 1.2 cents. Debit interchange accounted for 6% of non-interest income across financial institutions, making up 5% at nationwide banks, 8% at regional banks and 24% at community banks, according to Pulse, A Discover Company.
Nearly three in 10 issuers deployed contactless cards in 2019—up from 10% in 2018—and 66% projected that they would offer contactless debit cards by the end of 2020. Transactions using mobile wallets nearly doubled but accounted for just 1.7% of all debit transactions, with Apple Pay accounting for 85% of these payments, Pulse found.
Analysis: 9 in 10 Publicly Traded PPP Borrowers Kept Loan Funds
Just 12% of publicly traded Paycheck Protection Program borrowers elected either to decline or return loan funds after approval, while 25% of public companies approved for loans of $5 million to $10 million did the same, according to an analysis by the law firm Bryan Cave Leighton Paisner released yesterday.
“It appears that notwithstanding the fearmongering of [PPP FAQs], the negative media attention and related political scrutiny, over 75% of PPP borrowers approved for a PPP loan in excess of $5 million decided to retain their PPP loan, apparently trusting their earlier determination that they had a good faith belief that they needed to apply for the PPP loan in light of COVID-19,” wrote BCLP partner Rob Klingler.
The analysis—based on a review of Securities and Exchange Commission filings—showed that about 200 public companies with PPP loans of over $2 million kept their loan funds. The Small Business Administration in May extended a safe harbor to PPP loans under $2 million, deeming them to have made the certification as to the loan necessity in good faith. Drawing further on SBA data, the BCLP analysis estimated that about 1,400 PPP loans approved for $5 million to $10 million were subsequently returned or not closed, with about three-quarters of these loans being canceled quickly.
Congress Set to Recess
Both houses of Congress are set to be in recess this week, with no hearings scheduled. However, negotiations could continue on Capitol Hill over a new round of coronavirus relief.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.