Pub. 9 2019-2020 Issue 6

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S May • June 2020 3 presentations to video audiences. We focused the CBA board’s attention on PR dangers: high, unrealistic public expectations of banks due to statements by public officials, SBA and the U.S. Chamber; the public perception that banks are the bottleneck; and banks making money off of others’ problems. CBA coordinated with ABA and state bankers associations via 1-2 daily Zoom meetings (so 1-2 hours per day) and periodic weekend meetings as needed, plus special calls with Treasury Secretary Mnuchin, Comptroller Otting, FDIC Chair McWilliams, Senate Small Business Chair Rubio, SBA Administrator Carranza, Rep. Luetkemeyer (HFSC) to address specific issues, with extensive Q&A. Smaller groups of activist associations frequently developed action plans on key topics. CBA worked with state associations inMontana, Wyoming and NewMexico to allow their banks on CBA webinars. We worked with the Independent Bankers of Colorado andMountainWest Credit Union Association to quantify those doing PPP, why or why not, and public messaging. The sheer size of SBA’s ramp-up and substandard rollout created enormous bank challenges. In a nutshell, we saw banker angst over $349B (or $600B) of unsecured, non-recourse loans, no underwriting, access problems, unclear/conflicting/ changing terms/guidance, and early bank funding paid later by SBA. SBA and Treasury PPP issues causing a bottleneck/ chokepoint involved the continuing issues of conflicting rules, SOPs and guidance and insufficient or changing answers and unanswered questions dealingwith access, loandocumentation, forgiveness and the SBA guarantee. Specific unresolved topics included E-Tran access (unprecedented volume overwhelmed system and security features blocking access), various SBA forms and documents, daily reportsonthe statusofColoradoPPPactivities, inconsistent direction from SBA offices, early fund disbursements by banks with later SBA payment, the new wave of independent contractors, SBA directives on closing and funding loans, and definition or verification of payroll for loan calculations. Dozens of other issues are in the unresolved category. Issues, now relatively resolved, that CBA worked on throughout this ordeal include terms or features of the CARES Act (before Congressional adoption), interest rate changes of .5% to 1%, origination fees, who qualifies (such as loans to nonprofits, banks, ag businesses, bank director’s businesses and churches), promissory notes, bank employees (essential, documentation, safety while serving customers), five-day disbursement, capital rules, reserve requirements, CECL, Community Bank Leverage Ratio, bank liability if it knows that the borrower has misrepresented, Federal Reserve liquidity facility, FDIC “TAG” deposit insurance, small business panic about PPP funds adequacy, additional $250B PPP funding and an admonition to banks to rely only on official SBA documents. Your CBA teamof hard-working, talented staff and dedicated officers and board members are working hard to prepare for challenges on the horizon. In the meantime, rest assured that your exhausted yet invigorated CBA staff is working overtime — from our homes. We’re here for you. n CSI KNOWS MAGIC TRICKS. Making your technology burdens disappear is our specialty. CSI’s managed services solutions streamline your IT infrastructure, creating a technology enterprise that’s more secure, scalable and compliant. www.csiweb.com/presto CO BKR 0519.indd 1 7/22/19 3:49 PM