STATE GOVERNMENT RELATIONS
Indiana General Assembly Hits Pause on Legislative Session
The second week of the 2021 legislative session ended with an announcement from Gov. Eric Holcomb that, out of an abundance of caution, the state government complex would be closed to the public Tuesday and Wednesday this week due to recent national events, threats to other state capitols and COVID-19 restrictions. The closure meant that there were no committee hearings or session this week.
Over 1,000 bills have been introduced this session. The IBA Government Relations Team is still reviewing all the bills to determine their impact on the industry.
FEDERAL GOVERNMENT RELATIONS
PPP Forgiveness Forms and Information Released
The Department of the Treasury has released new forgiveness application forms with instructions, a new interim final rule on PPP forgiveness, and a form in regard to borrower’s disclosure of certain controlling interests.
- PPP – Loan Forgiveness Application and Instructions – Form 3508S
- PPP – Loan Forgiveness Application and Instructions – Form 3508EZ
- PPP – Loan Forgiveness Application and Instructions – Form 3508
- New Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as Amended by Economic Aid Act
- PPP – Borrower’s Disclosure of Certain Controlling Interests
Form 3508S provides a streamlined forgiveness application for all PPP loans of $150,000 or less. The interim final rule consolidates previous guidance with new requirements as a result of the Economic Aid Act. The Small Business Administration has indicated that it will revise pre-existing FAQs, and the IBA GR Team will notify members as soon as updated FAQs are released.
SBA Guidance on Second-Draw PPP Loans
The SBA has released a new FAQ document for second-draw PPP loans in regard to “How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide.” Second-draw loans are available for borrowers with 300 or fewer employees that experienced a 25% or greater revenue drop in 2020 compared to 2019. In addition, the borrowers must have used or intend to use the full amount of their first-draw PPP loans by the time they receive their second-draw loans.
The SBA noted that “borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act, the Economic Aid Act, and the Paycheck Protection Program Interim Final Rules. The U.S. government will not challenge lender PPP actions that conform to this guidance and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time the action is taken.”
PPP Resources Released
The SBA has released additional PPP resources, including:
- Procedural Notice - PPP Borrower Resubmissions of Loan Forgiveness Applications Using Form 3508S, Lender Notice Responsibilities to PPP Borrowers, and Offset of Remittances to Lender for Lender Debts
- Procedural Notice - Paycheck Protection Program Excess Loan Amount Errors
In addition, the SBA reminded lenders to make sure the PPP first-draw loan number is included in the second-draw PPP loan application (Form 2483-SD), and that PPP lenders should ensure borrowers can easily access their SBA loan numbers, which have the following format: XXXXXXXX-XX.
View Second Draw Borrower Application Form
Federal Banking Agencies Issue FAQs on Suspicious Activity Reporting
The federal banking agencies on Tuesday issued a set of frequently asked questions providing clarity about suspicious activity reporting and other anti-money laundering issues. The agencies issued the FAQs at the recommendation of the Bank Secrecy Act Advisory Group. The FAQs clarify existing expectations and do not establish new requirements.
The agencies said that the FAQs are intended to enable financial institutions to focus resources on activities that "produce the greatest value to law enforcement agencies and other government users of Bank Secrecy Act reporting."
Among other provisions, the FAQs address SAR character limits, maintaining a customer relationship following the filing of a SAR, requests by law enforcement for financial institutions to maintain accounts as well as receipt of grand jury subpoenas and law enforcement inquiries.
Agencies Issue Final Rules Clarifying Role of Supervisory Guidance
The Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the National Credit Union Administration on Tuesday each issued final rules codifying that regulatory guidance does not have the force and effect of law, granting much of a joint petition filed by ABA and the Bank Policy Institute that sought a formal rulemaking to ensure that banking organizations would not need to rely on a 2018 interagency statement to clarify the role of guidance.
The agencies confirmed in the final rule that they do not "take enforcement actions or issue supervisory criticisms based on non-compliance with supervisory guidance. Rather, supervisory guidance outlines supervisory expectations and priorities, or articulates views regarding appropriate practices for a given subject area." Meanwhile, regulations do have the force and effect of law and enforcement actions can be taken if regulated institutions are in violation. Regulations are also generally required to go through the notice and comment process.
The agencies are adopting the final rule on an agency-by-agency basis, rather than pursue a joint final rulemaking, noting that “having separate final rules has enabled agencies to better focus on explaining any agency-specific issues to their respective audiences of supervised institutions and agency employees.” The Federal Reserve is expected to adopt a similar rule in the near future.
FDIC Revises Guidelines for Appeals of Material Supervisory Determinations
The Federal Deposit Insurance Corporation board on Tuesday approved changes to the agency’s guidelines or appeals of material supervisory determinations. Among other provisions, the changes establish a new Office of Supervisory Appeals that will replace the current Supervision Appeals Review Committee and will be independent from the divisions within the FDIC that have the authority to issue material supervisory determinations.
Under this new structure, appeals submitted to the office will be decided by a panel of reviewing officials that the FDIC plans to recruit from outside the agency. Reviewing officials will have prior bank supervisory or examination experience and serve term appointments, the FDIC said.
In addition, the guidelines make changes to the standard of review for appeals made to the division director, address the communications between the Office of Supervisory Appeals and supervisory staff or the appealing institution, allow banks to request expedited reviews and modify the procedures and timeframes for when determinations underlying formal enforcement-related actions may be appealed.
FDIC to Resume Resolution Planning for $100B+ Asset Banks
The Federal Deposit Insurance Corporation formally announced that it will resume requiring resolution plans from covered insured depository institutions, lifting a moratorium in place since November 2018 while the FDIC revamped the process.
“Given the passage of time from the last submissions pursuant to the IDI Rule and the uncertain economic outlook, the FDIC will resume requiring resolution plan submissions for IDIs with $100 billion or more in assets,” the FDIC said. “No firm will be required to submit a resolution plan without at least 12 months advance notice provided to the firm.”
The agency added that it intends to continue targeted, periodic engagement with IDIs and testing of resolution capabilities. It also said it will provide further details about its “modified approach,” which it said “will provide greater utility for the agency in planning for a resolution and is expected to be less burdensome on institutions subject to the rule.”
EIP-Eligible Taxpayers Should Consider Rebate: IRS
Eligible individuals who have not received Economic Impact Payments should carefully review the guidelines for the Recovery Rebate Credit when filing their 2020 tax returns, according to the IRS.
In an announcement that the 2021 tax filing season begins Feb. 12, the IRS noted that stimulus payments are not taxable and do not reduce taxpayer refunds.
USDA Finalizes Hemp Rule
The U.S. Department of Agriculture has issued its final rule regulating the production of hemp. The rule – which takes effect March 22 – includes licensing and recordkeeping requirements, procedures for testing THC levels, compliance provisions and more.
FHFA Extends Foreclosure, Eviction Moratoriums
The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will extend the moratoriums on single-family foreclosures and real-estate-owned evictions from Jan. 31 until at least Feb. 28. The foreclosure moratorium applies to enterprise-backed, single-family mortgages. The REO eviction moratorium applies to properties that have been acquired by an enterprise through foreclosure or deed-in-lieu-of-foreclosure transactions.
Biden Picks Chopra to Lead CFPB, Gensler to Chair SEC
President Biden has announced that he will nominate Rohit Chopra to serve as director of the Consumer Financial Protection Bureau. Chopra has served since 2018 as a Democratic member of the Federal Trade Commission, and he was a member of the launch team for the CFPB, serving as assistant director of the bureau for student lending and as student loan ombudsman.
Biden also announced his selection of Gary Gensler to chair the Securities and Exchange Commission. Gensler was chairman of the Commodity Futures Trading Commission from 2009 to 2014, where he led rulemaking to implement several Dodd-Frank Act reforms to swaps and derivatives markets. Gensler is currently an economics and management professor at the Massachusetts Institute of Technology, co-director of the MIT Computer Science and Artificial Intelligence Laboratory’s fintech project and a senior adviser to MIT’s Digital Currency Initiative.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.