FEDERAL GOVERNMENT RELATIONS
Register for ABA Virtual Washington Fly-In: Midwest Region
While the IBA’s Virtual Washington Trip concluded this week, the need for grassroots advocacy continues on as bankers work to ensure the best possible environment for our customers and communities that are navigating the COVID-19 pandemic. Join with fellow bankers and industry leaders from across the Midwest for a virtual meeting with agency leadership. In partnership with state bankers associations, the ABA is hosting a Washington Fly-in to ensure policies crucial to the banking industry remain front and center, and to provide a forum for critical questions from your bank. You will not want to miss out on this opportunity to speak directly to regulators about the need for commonsense policies and smart reform that will help America’s banks better serve their communities and grow the economy.
The Midwest Regional Virtual Washington Fly-in begins Oct. 5 with an in-depth discussion with ABA experts on key issues facing our industry at the federal level, followed by discussions with:
ABA Federal Issues Briefing – 10/5 (12:00 – 1:30 p.m. EST)
FDIC Briefing with Chairman Jelena McWilliams – 10/5 (2:00 – 3:00 p.m. EST)
OCC Briefing with Acting Comptroller Brian Brooks – 10/6 (3:30 – 4:30 p.m. EST)
Federal Reserve Briefing with Federal Reserve Board Governor Michelle Bowman – 10/8 (9:00-10:00 a.m. EST)
CFPB Briefing with CFPB Director Kathy Kraninger - TBD
Register for ABA Virtual Washington Fly-In
Beige Book: Economy Rebounding, but Growth Remains Modest amid Uncertainty
Economic activity continued rebounding in all regions in the U.S., but growth was modest and remained well below levels seen before the pandemic began, according to the Federal Reserve’s sixth Beige Book release of this year. Consumer spending continued picking up, driven by retail, auto sales and tourism, but many districts noted that these areas saw slowing growth in the most recent period.
Home sales were “notably higher,” according to the Fed, while commercial real estate activity remained in contraction. Loan demand increased slightly, led by residential mortgages. The Fed noted that the economic outlook among most districts had improved to modest optimism, but that uncertainty - given the unknown course and severity of the pandemic - persisted.
Unemployment also showed improvement across districts as many businesses reopened or ramped up activity, particularly manufacturing. Service industries saw volatility in hiring. Employers continued reporting difficulties in bringing employees back to work due to health and safety concerns, childcare needs and unemployment insurance benefits.
BLS: Job Growth to Slow, Labor Force Participation to Drop by 2029
Jobs in the U.S. economy are projected to rise from 162.8 million in 2019 to 168.8 million in 2029, according to figures from the Occupational Outlook Handbook released by the Bureau of Labor Statistics on Tuesday. The projected annual growth rate of 0.4% would be slower than the growth rate of 1.3% observed in the prior decade as the economy came out of the Great Recession.
Labor force growth will also slow to 0.5% annually from 0.6% annually in the prior decade, BLS projected, with men’s participation in the labor force anticipated to fall from 69.2% in 2019 to 66.1% in 2029, and women’s participation slipping from 57.4% to 56.6%.
BLS projected that the health and social assistance sector would see the most new jobs, with six of the fastest-growing occupations related to health care and more than three million new jobs expected in that sector. Other sectors seeing large numbers of new jobs in the next decade will be professional, scientific and technical services; and accommodation and food services. Sectors seeing the biggest declines will be manufacturing, retail trade and wholesale trade, BLS reported.
House Dems, GOP Release Dueling PPP Reports
In advance of an oversight hearing on Tuesday, Democrats and Republicans on the House Select Subcommittee on the Coronavirus Crisis released dueling reports assessing the Paycheck Protection Program. The Republican staff report called it a “resounding success,” while the Democratic staff report focused on risks of fraud and abuse in the program.
“Data show the PPP supported more than 51 million jobs across the country,” the GOP report indicated. In a very short period of time, the PPP funneled $117 billion in loans to “historically underutilized business,” or HUB, zones of economic distress, supporting 13 million jobs in those areas.
Assessing concerns raised by Democrats that some financial institutions prioritized existing customers in making PPP loans, the GOP report pointed to banks’ compliance with Bank Secrecy Act and know-your-customer requirements. “The evidence … confirmed that the banks were limited by the requirement to collect and verify BSA/AML information from any new customers,” according to the report.
Meanwhile, the Democratic report identified what it called risks of waste, fraud and abuse in how the Small Business Administration managed the PPP. Examples it cited included $1 billion, or 0.2%, of PPP loans going to companies receiving multiple loans (which the report attributed to “a vulnerability in SBA’s loan processing system”); $96 million, or less than 0.02%, of PPP loans going to companies prohibited from doing business with the federal government; and $195 million, or less than 0.04%, of PPP loans going to government contractors with performance issues.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.