Although I have now been retired from Wisconsin Bankers Association for longer than I held the position of WBA CEO from 1990 to 2004, I continue to maintain a very high level of interest in banking.  

Having worked for two other state bankers associations prior to joining WBA, and later serving as president/CEO for the Graduate School of Banking at the University of Wisconsin, as a board member for two Wisconsin banks, and doing selective consulting for various organizations, I believe it’s natural that I have become an “arm’s length observer” of banking.

With a total of 40+ years in these various roles, coupled with the multitude and rapid pace of changes in banking, it’s noteworthy that the primary functions of bankers associations have basically remained steady – government relations advocacy; banker education/training; communications with the membership and general public through the media; providing unique products and services to the membership; serving as a trusted legal resource for banks; and offering a specialized assembly function for member bankers.

While each of these is important, government relations advocacy is absolutely vital.  In a perfect world, which of course does not exist, if every banker communicated with every elected official and every regulator on every issue, WBA’s GR role would be very different from what it is.  

WBA has long held a highly positive reputation as having an unquestioned level of credibility in representing the interests of member banks and their customers with state and federal officials.  Without question, credibility is the most critical element to having a successful GR program for organizations like WBA.  

Allow me to share the details of a conversation I had decades ago when I was named CEO of the North Dakota Bankers Association; I had been working as the communications director for the Nebraska Bankers Association.  The gentleman who was NBA’s lead lobbyist, attorney and a former state senator, told me to “keep in mind that if a legislator ever agrees to support what you’re saying, it’s not because he or she likes you, it’s not because they think you’re smart, and it’s certainly not because they think you’re good looking.  It’s because of who you represent!”  That’s advice I always took to heart and frequently shared with others.

For an association GR program to be effective, it is essential for the association membership to be actively involved.  This includes timely contact with your local elected officials when there are pending issues and prior to elections.  Like everything else, the cost to get elected or re-elected to office requires greater expenditures each election cycle.    

The importance of political action committees and conduit dollars cannot be overemphasized.  If you contribute directly to local candidates, that’s great.  Just please keep in mind that the WBA GR staff literally receives a torrent of requests for financial support from pro-banking candidates as elections approach.  They must have this capability so WBA can continue being a key player in Madison and Washington.

A word or two about political fundraising events. Let me be the first to say the obvious – generally these are not a whole lot of fun to attend, until you realize how vital they are to “show the flag” for WBA. Candidates do remember who was present for their event and their contributions. They need reminding that WBA is the membership, not just the lobbyists. So please participate when WBA invites your attendance. A final suggestion – get there early. You’re much more likely to be remembered if you’re among the early arrivals and hopefully have some quality time with the candidate before it gets crowded.

This leads me to a request for you to help enhance banking’s reputation. Over the years, I’ve detected some reluctance by more than a few bankers to really tell the story of their positive role in the community. I believe in the theory that if you’ve done it, then it’s not bragging. So please proudly tell the world in a forthright manner about the results of what you and your bank staff are doing every day.

One reason I chose to apply for the WBA CEO position in 1990 was my awareness of how successful the organization has always been viewed by elected officials and regulators, other associations, the news media and most importantly, its members. I know that this reputation has only grown and expanded in recent years under the stellar leadership of President/CEO Rose Oswald Poels.  

Finally, if you are already involved with WBA in a volunteer role, I commend you. If not, I hope you’ll give this your serious consideration. As talented as the WBA staff is, combining that with the expertise of volunteer bankers creates an even greater strength for WBA to continue to excel as a diverse and reliable professional resource for Wisconsin banks.

By, Alex Paniagua

Updates and revisions continue to be an evolving part of the newest round of PPP. To address the immense amount of change from this past week alone, I find it important to detail the most recent PPP-related information and beneficial resources that have come to light.  

On Jan. 27, WBA added three PPP Loan Forgiveness Application Forms. Form 3508S, Form 3508EZ, and Form 3508 are all available for WBA members. WBA and FIPCO have also added a new PPP Addendum and PPP Maker Certification forms. These forms are being provided to the WBA Membership on a complimentary basis from FIPCO and are also available in the software from FIPCO.  

WBA has released two FAQs highlighting new and updated information on PPP due to Economic Aid Act and Second Draw Loans. The information reflects new or revised FAQs due to new SBA Guidance or Instruction.  

Finally, there are important issues to be aware of as you and your borrowers work through the loan process. The first issue deals with the “Number of Employees” box in the new First Draw and Second Draw loan applications. More information on the forgiveness rules (which remain largely unchanged from the 2020 PPP program) can be found starting on page 29 in recent FAQs issued by SBA

The second issue relates to PPP borrowers that used a “draft” 2019 tax return to form the basis of the business’ PPP application last year and now as these same borrowers apply for forgiveness, a copy of the real 2019 tax return that was filed with the IRS is being shared with the lender, causing the lender to realize significant and meaningful discrepancies exist. More information on these issues can be found here

This form of unparalleled communication with members and commitment to learning is what drives WBA as a trade organization. And as always, the most up-to-date material and information are available on our coronavirus resource page here. We at WBA know how challenging these changes can be, and we are proud to be your source of accurate and timely information as you help your borrowers navigate the newest guidelines.  

I hope to see most of you virtually next week at our annual Bank Executives Conference which begins February 1. Just like the valuable information WBA has shared on PPP, this year’s conference will share valuable information for your team on culture and other banking issues. Being able to gather and learn from each other in this way is yet another example of the leadership present in our industry. I hope you can join us. 

By, Alex Paniagua

SBA, in continuing established communications messaging, provided the following:

SBA is receiving a significant number of questions from lenders regarding the revised rules on First Draw PPP loans, First Draw Loan Increases, Second Draw PPP loans, and streamlined Forgiveness. In response, SBA issued a release providing updated information along with recently released additional PPP guidance and resources. To assist lenders in how to best access PPP as amended by the Economic Aid Act, SBA issued a couple of reminders related to existing program guidance.  

First Draw PPP Loans Under Review May Be Delayed Getting Second Draw PPP Loan number

As described in SBA’s interim final rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities, SBA may review any PPP loan, of any size, at any time, as the Administrator deems appropriate. If a borrower’s First Draw PPP Loan is under review by SBA for any reason, including if information in SBA’s possession indicates that the borrower may have been ineligible for the First Draw PPP Loan it received or for the loan amount it received, the lender will receive notification from SBA when the lender submits an application for a guaranty of a Second Draw PPP Loan, and will not receive an SBA loan number until the issue related to the unresolved borrower’s First Draw PPP Loan is resolved. SBA is working to improve the information provided to lenders about the issues and how lenders can help clear issues as expeditiously as possible. 

Additionally, Second Draw loan applications require an SBA loan number used for the First Draw PPP loan that was originated in 2020. Please verify that the applicant has the correct SBA loan number, and the correct Borrower TIN to assure that the portal can match up the two loans. 

Recent Guidance Issued

Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide (Released 1/19/2021) provides detailed information regarding calculating and documenting the mandatory 25% reduction in revenues and maximum loan amount.

PPP: How to Calculate Maximum Loan Amounts for First Draw Loans and What Documents to Provide ( (released 1/17/2021) provides updated guidance, by business type, regarding calculating and documenting payroll costs in order to determine the maximum amount of a First Draw loan.

Interim Final Rule: Loan Forgiveness Requirements and Loan Review Procedures as Amended by Economic Aid Act (1/19/21)

PPP Loan Forgiveness Application Form 3508 (Revised 1/19/21)

PPP Loan Forgiveness Application Form 3508EZ (Revised 1/19/21)

PPP Loan Forgiveness Application Form 3508S (Revised 1/19/21)

Borrower’s Disclosure Of Certain Controlling Interests Form 3508D (Released 1/19/2021). The 3508-D only needs to be completed by borrowers that received a PPP loan before 12/27/20 and were directly or indirectly controlled by certain government officials (president, VP, member of congress, head of executive department and their spouses) at the time the loan was made.

For more information and guidance, visit WBA's Coronavirus Resource Page.

By, Ally Bates

After a year in which the coronavirus pandemic brought bank mergers and acquisitions to a halt in Wisconsin, it’s likely deals will resume in 2021.

Only six bank mergers were announced in the state last year as the pandemic, with its economic shockwaves and uncertainty, forced potential buyers to focus internally rather than look to expand. One of the proposed deals in the state – Nicolet National Bank’s purchase of Commerce State Bank – was called off amid the pandemic.

Acquirers needed to make sure they themselves were girded for the rapid recession spurred by the spread of COVID-19. At the same time, the economic disruption made it more difficult to evaluate a potential seller’s loan portfolio and financial strength. 

The small number of mergers was in contrast to 2019, when there were 17 in Wisconsin.

While there still are many unknowns as the new year begins and the pandemic lingers, Wisconsin attorneys who specialize in bank mergers and acquisitions think banks that have wanted to buy or sell could make those decisions in 2021.

“I think so,” said Peter Wilder, a shareholder with the banking and financial institutions practice group of the law firm Godfrey & Kahn in Milwaukee. “I think we’re still in the same posture as the second half of last year, where there’s some openness to it – there are discussions but there’s still some hesitancy.”

But if 2021 is relatively stable, pent-up demand left over from 2020 could help drive bank mergers this year, he said.

John T. Reichert, shareholder in the banking and finance practice of the Milwaukee law firm Reinhart Boerner Van Deuren, said bankers are talking about potential deals again.

“In ’21, I don’t believe there have been any deals announced in the first three weeks, but I certainly think I won’t be surprised if we get back to double digits this year based on the early activity,” Reichert said. “We are working on five or six things in the hopper. I think two or three can be announced in the first quarter. Things are starting to come back online. The fundamentals haven’t changed at all.”

Among those fundamentals are aging bank executives, some in their 60s and 70s, who want to retire, travel, and spend time with their grandchildren, Reichert said.

Another factor is shareholders seeking liquidity from their investment.

“You’ve got so many shareholders that are also older and looking to sell their shares. Or people have inherited them and they don’t have the same connections to the community, and so you have a lot of pent-up shareholder demand,” Reichert said.

Wilder said in some cases, older leaders of banks without succession plans just want to retire from the business.

“I mean, they’ve owned this for a long time. They’re ready to retire and do something else,” Wilder said.

The ongoing costs of technology and cybersecurity to run a competitive bank also weigh on the minds of longtime bankers, especially those operating smaller community banks.

“Everything’s got to be digital and mobile, and remote this and remote that – plus security. Cyber fraud and cybersecurity are huge,” Reichert said. “So the amount of resources it takes for technology increases constantly, and if you’re a smaller bank, that’s a hard burden.”

Banks looking to sell likely will face additional scrutiny from buyers, given the effects – potential and real – of the COVID-caused downturn, and could mean a lower sale price.

Buyers will be concerned about the pandemic’s impact on credit quality and loan portfolios, an issue that last year made it difficult to value sellers, Wilder said.

Reichert said the COVID credit concern is the variable that has the biggest chance of tempering banker mergers and acquisitions this year.

“It’s very challenging to get your arms around credit right now, both yours and the target’s,” Reichert said, adding that it’s possible the avalanche of Payroll Protection Program loans might have hidden impacts of the downturn on some banks.

“The question mark – and it’s a big one – is what, if anything, is it masking?” Reichert said. “Are these stimulus programs actually helping or are they just delaying and deferring a lot of eventual credit pain. And nobody knows.”

Still, Wilder said, in spite of uncertainty, it appears banks that wanted to acquire last year but held off still are in the market. He cited comments from a Jan. 19 conference call between executives at Old National Bancorp and Wall Street analysts as one piece of early evidence.

On that call, according to a transcript by Seeking Alpha, Old Bancorp Chairman Jim Ryan said: “I suspect there will be M&A opportunities that will present themselves during the year. We are getting more comfortable that we could put a credit mark on somebody else's loan portfolio, but we will continue to be an active looker and a selective buyer.”

Along with the pandemic’s fallout, a new administration in Washington D.C. and the potential for higher taxes could figure into whether a bank will want to sell, Wilder said.

With Democrats controlling the presidency and Congress, for instance, an increase in capital gains rates could shift the calculus for potential sellers, Wilder said. In addition, other types of changes to the tax code could affect estate and tax planning strategies for family-owned institutions, perhaps causing them to sell or hold depending on their situation, he said.

While the outlook for higher taxes and when they would take effect is unclear, Reichert said, “If you plan to sell in the next three years, you may be inclined to sell this year.”

For some banks, finding another bank willing to buy might not be easy, Reichert said. For starters, the sheer number of banks has been decreasing. Data from the

Federal Deposit Insurance Corp. shows the number of insured institutions based in Wisconsin has shrunk by almost 100 in the last decade – to 180 through September 2020 from 279 banks at the same time in 2010.

Any acquisition has to make sense for a buyer’s growth plan. For rural community banks, it’s often tougher to attract buyers, Reichert said. That’s a reason that some banks will end up being purchased with cash by credit unions.

“That trend will continue, undoubtedly,” he said.

There were a lot of discussions about deals in 2020 before the pandemic hit, and some of those banks are likely determined to sell in 2021.

“I think people who were on the fence this time last year no longer are on the fence,” Reichert said. “So even if multiples and pricing have come down – and they have – there a number of people who have called me, and I know they’ve called others, who have said. “I’m ready to sell, we’re ready to sell.’ Because they remember what it took to get through the Great Recession and nobody knows what the next three to five years look like.”

By, Alex Paniagua

WBA Government Relations Committee (GRC) Chair Tom Mews of FNC Bank, AG Section representative Dave Coggins of Investors Community Bank, and WBA’s Rose Oswald Poels met Thursday afternoon with Senator Tammy Baldwin (D-WI), just one day after the inauguration of President Biden, to discuss banking priorities for the 117th Congress.



Coggins and Mews discussed the impacts of the Paycheck Protection Program (PPP) and the current economic climate on the agriculture and hospitality customers, soliciting continued targeted assistance in these areas. Sen. Baldwin detailed her support for the ag community through her work with Sen. Thune (R-SD) on legislation that would revise the way producers calculate their PPP loan award. A measure ultimately adopted in the most recent stimulus passed late last year.

Poels pivoted to request Sen. Baldwin's support of tax legislation to help farmers (ECORA) and to help the banking industry work with CFPB on the disparate impact of rules, particularly on those entities lending to consumers and businesses without the same level of regulatory scrutiny as the banking industry. 

Sen. Baldwin requested talking points when she meets with the new CFPB head and data on lending in rural areas. She also noted the impact ECORA would have on a practical level.

When asked about what she sees next for this Congress, Baldwin remarked that the Senate will need to first pass its organization resolution, followed by confirmations.

“I then hope and expect we’ll see a COVID-19 rescue package to address vaccine funding shortfalls," said Baldwin. "After that, Congress could focus on a larger economic package.”

By, Alex Paniagua

As we continue to field questions around the new PPP program, there are a few issues we want to be sure to highlight for you that you should be aware of, and your borrowers should consider. The first is around employee count. The new First Draw and Second Draw applications have a box on them for “Number of Employees.” Borrowers should be putting into this box their current number of employees at time of application. However, it is important for borrowers to remember that when it comes time for forgiveness, there will be a comparison done of number of employees during the borrower’s reference period (the period on which the maximum loan amount calculation is based; new law permits this to be 2019 or 2020 payroll figures) and the number of employees during the borrower’s covered period (the 8-24 week time period after borrower receives loan proceeds). If there is a reduction in the number of employees from the reference period to the covered period, the borrower’s forgiveness will correspondingly be reduced on a percentage basis unless the borrower’s situation fits into one of the exemptions. So just like when peeling back the layers of an onion it can cause tears to form in your eyes, this PPP program may make borrowers and lenders alike feel the same way. To mitigate surprises at the back end of this program with your borrowers, it may be important to have these conversations now at time of application. More information on the forgiveness rules (which remain largely unchanged from the 2020 PPP program) can be found starting on page 29 in recent FAQs issued by SBA.  

Another issue that has been brought to WBA’s attention relates to PPP borrowers that used a “draft” 2019 tax return to form the basis of the business’ PPP application last year and now as these same borrowers apply for forgiveness, a copy of the real 2019 tax return that was filed with the IRS is being shared with the lender, causing the lender to realize significant and meaningful discrepancies exist. The example shared with WBA relates to a Schedule C sole-proprietor borrower who shared a draft 2019 tax return (presumably prior to having his/her accountant review it) that showed a profit on Line 31. This was then used to calculate the borrower’s maximum loan amount, and the loan was closed and proceeds distributed. Upon receiving the forgiveness application which included a copy of the final tax return filed with the IRS, it was discovered by the lender that Schedule C, Line 31 was a negative number. Of course, this makes the borrower ineligible for a PPP loan in the first place, and may call into question the borrower’s certification that he/she made on the application that all information on the application was truthful and accurate (presumably in these cases the borrower acted in good faith at the time and did not knowingly provide false information). Furthermore, the lender is now in a difficult situation of likely having to deny loan forgiveness based on this new information. As a result, WBA is talking with SBA and advocating for some change to provide relief for these borrowers; however, with the new Biden Administration taking over and the reality that people are shifting around in agency positions so the issuance of new regulations may be frozen for a period of time, it is unknown when or if we will see resolution to this particular circumstance. Given this scenario, WBA urges all lenders to proceed with some caution when accepting “draft” documents (e.g., an unfiled 2020 tax return) from borrowers to substantiate new PPP applications. In addition, if you have a borrower in this situation, it may be best for the borrower to wait a bit longer to apply for forgiveness in case SBA or Congress makes a change that is helpful. 

By, Alex Paniagua

With President-Elect Biden taking office today at Noon, it means the political officials at all agencies, including SBA, will no longer be employed. As a result, a lot of guidance was issued last night ahead of this change in government control. The following highlights the new guidance issued on a variety of topics. 

Updated Forgiveness Applications Including Form for $150,000 or Less PPP Loans  

The three existing forgiveness applications have all been updated to incorporate changes made in the Economic Aid Act. Most notably, the new SBA 3508S is the forgiveness application form to be used for PPP loans of $150,000 or less. The new versions of SBA 3508, 3508EZ, and 3508S may be found here. At the same time, SBA issued last night an interim final rule addressing forgiveness requirements and loan review procedures. A summary of these changes follows.   

New Interim Final Rule on Forgiveness Requirements and Loan Review Procedures  

SBA issued a 62-page Interim Final Rule (IFR) that largely incorporates provisions related to forgiveness requirements and loan review procedures from the 2020 program, as amended by the new Economic Aid Act. This interim final rule was written in a question and answer format so WBA will be working on updating its Master FAQ document in the next few days to incorporate these additions. The updated FAQs cover the following forgiveness related topics: loan forgiveness process, eligible payroll costs, eligible non-payroll costs, reductions to forgiveness amount, documentation requirements, and lender hold harmless. In addition, the IFR contains FAQs related to loan review procedures. The new IFR may be found here

New Disclosure Form for Borrowers of Certain Controlling Interests   

The SBA last night issued new SBA Form 3508D – Borrower’s Disclosure of Certain Controlling Interests, which is required to be completed in a narrow set of circumstances with a PPP forgiveness application. The Economic Aid Act requires borrowers that received First Draw PPP Loans before December 27, 2020, to disclose whether a “Covered Individual” directly or indirectly held a “Controlling Interest” in the Borrower at the time the Borrower’s loan application was submitted to the PPP lender. A “Covered Individual” means (a) any one of the following Government Officials: the President, the Vice President, the head of an Executive department as defined in 5 U.S.C. § 101, or a member of Congress, and (b) the Spouse, as determined under applicable common law, of a Government Official described in clause (a), determined as of the time the Borrower’s loan application was submitted to the PPP lender. A copy of the form may be found here

More PPP information may be found on our Coronavirus Resource Page.

By, Ally Bates

WBA has reported on Biden’s political appointees as they’ve been announced. From Secretary of the Treasury Janet Yellen to recently appointed Director of the CFPB Rohit Chopra, we’ve put together a list indicating which ones will be most notable for Wisconsin bankers.

Secretary of the Treasury – Janet Yellen

  • Economist, former Vice-chair (2010-2014) and Chair (2014-2018) of the Federal Reserve
  • Chair of the Council of Economic Advisors in the latter portion of President Clinton’s second term

Deputy Secretary of the Treasury – Adewale “Wally” Adeyemo

  • Economic and political advisor
  • Held roles at the Department of the Treasury, Consumer Financial Protection Bureau, National Economic Council, and was the first president of the Obama Foundation

Secretary of Commerce – Gina Raimondo

  • Elected Governor of Rhode Island in 2014, re-elected in 2018
  • Former General Treasurer of Rhode Island and former Chair of Democratic Governor’s Association

Deputy Secretary of Commerce – Don Graves

  • Banker and government official advising the Department of the Treasury in the late-1990’s.
  • Served in the Obama administration and counseled then-Vice President Joe Biden

Administrator – Small Business Administration – Isabel Guzman

  • Currently serves as director of the Office of the Small Business Advocate within the Governor’s Office of Economic Development in California
  • Former deputy chief of staff to the SBA Administrator under the Obama administration

Chair, Securities and Exchange Commission – Gary Gensler

  • Former government official and investment banker.
  • Held leadership roles at the Department of the Treasury in the ’90s and ’00s, and chaired the Commodity Futures Trading Commission under President Obama

Director, Consumer Financial Protection Bureau – Rohit Chopra

  • Current Commissioner on the Federal Trade Commission
  • Former assistant director at the CFPB, and Student Loan Ombudsman at the Department of the Treasury.

By, Alex Paniagua

American Business Executive Robert Townsend had a theory on leadership back when the concept of a directorial business position was held together by a much stricter, less intimate definition. His theory asked the question: is the person you report to a leader, or just your boss?   

The difference, as Townsend described it, is one of willingness, encouragement, and a focus on working with your team for the sake of their development first and the company second. For Townsend, the difference between a boss and a leader was that of day and night. If you asked people 50 years ago what it means to lead, a majority of responses would likely be opposing this theory of nurture over production. But in recent decades, even in the past few years, what it means to be a leader has evolved drastically to reflect Townsend’s ideas. This has become more apparent as the pandemic inches into a second year, causing many to again ask what it means to be a leader in today’s covidian age. 

What It Means to Lead 

Most people will tell you that the key characteristics of leadership have changed significantly, but the challenges of this past year have caused many to notice what this truly means. 

“Anyone still leading through autocracy has probably learned early on in this pandemic that their style isn’t going to work,” said Dan Peterson, president and CEO of Stephenson National Bank & Trust (SNBT), Marinette. “You need to let people find their own ways in a lot of cases. Forcing someone to follow the rules you’ve made is going to kick you down really fast. As a leader, you have to view everyone as a teammate.” 

Leading by authority has become less popular as more individuals in executive positions have turned to their teams for collaboration. Many bankers have taken notice of this as those in leadership roles have frequently reached out to employees to not only see how they’re doing but to gather their thoughts on day-to-day activity. While some see this as a necessary development during a time when employees are working remotely, others perceive it as an emphasis on what has already existed for quite some time.  

“I don’t think leadership has changed since the pandemic, but what it has done is it has really magnified the essential characteristics of leadership in today’s culture,” said Dr. Fred Johnson, CEO and founder of InitiativeOne. 

Johnson believes a greater majority of people in positions of power today have gotten where they are because they understand the unparalleled benefit of collaboration over individualism. He cites that ideal leadership is best measured by three defining traits: authenticity, transparency, and vulnerability. The use of all three will naturally result in a trait that is necessary but often overlooked: trust.  

“There's an expectation today that you’ll be competent, but today the foundation of leadership is based upon trust,” Johnson said. “I'm not going to follow you if I don’t trust you. I won’t buy into your philosophical leadership priorities if I don’t trust you. I really don’t care what your experiences are if I don’t trust you.” 

The best way to build this trust, according to Johnson, is by showing you care rather than just saying it. Regularly checking in with employees regarding a variety of subjects is yet another task to add to the never-ending list that leaders face, but it’s one that builds the culture in your workplace for the better. It will be just as important after the pandemic as it is today. 

“When you’re in a mode of crisis leadership, to be effective requires an inordinate level of professional maturity,” said Peterson. “You have to trust your team.”  

Although Johnson believes leadership has only been emphasized during the pandemic rather than directly changed, he stated that it has changed positively in recent decades. 

“Leadership has changed fundamentally,” Johnson said. “The old rules used to be that there’s a personal side and there’s a professional side, and those two sides would never mash. Today, especially with the last two generations in the workplace, they’ve started to reject that. They want a life that has fluidity between the two.” 

As a leader, it is important to empower your team to make the right decisions, but to also trust that they’ll be doing the right thing. Be open and honest and let the productivity flow from the morality you’ve helped instill into your team. It may be an uneasy step, but it’s a step in the right direction.   

“One of the biggest takeaways for me during this time is that we have to be comfortable with being uncomfortable,” Peterson said. “With all the times I’ve had to stretch the rubber band in my life, it’s never comfortable, but that’s how things get changed; when you have that tension.”  

They’re People Before Bankers  

Your team is good at what they do. You likely helped hire them and keep them around because they perform well – but at the end of the day, bankers are not born bankers. In fact, many of them have spent a greater part of their lives being something other than their current job title. Tapping into that ability to reach employees as people who are dealing with emotions, especially during this time, is a critical skill for leaders to have.  

“Don’t be afraid to express some humility and remind your employees that you care,” said Peterson. “It’s been hard for us as leaders during this time, but let’s face it – it’s been a lot harder for so many of our employees having to work remote. There’s so much uncertainty, but if you make it comfortable for them and reassure them of their roles and responsibilities, they’ll continue managing their tasks in the best atmosphere given the situation.” 

Peterson aims to do exactly this. By regularly checking in with employees, he seeks to remind them that even if things are not perfect, they’re going to get through it together. He reminds them how massive of a change this past year has been and how significant of a part they’ve played in maintaining morality and responsibility. Every day has been a curveball, but allowing for authenticity helped SNBT emerge stronger because of it. It’s the type of leadership that Johnson notes wasn’t at all prominent just decades ago.  

“The type of leader who sees their employees as workers instead of actual people would have led just fine in the ‘60s,” Johnson said. “But here’s the thing; it’s not the ‘60s.” 

On this subject, Johnson shared a story from a leadership talk he had with a group of east coast NFL coaches. After Johnson addressed some key characteristics of being a leader, one of coaches responded in an unexpected way: he raised his hands to reveal two massive rings on his fingers and stated, ‘the only thing I need to lead are these championship rings.’ 

“What he was telling me was that his experience gave him the authority to lead,” Johnson said. “What he didn’t realize was that his players were coming to me and saying they didn’t trust this guy.”  

The unnamed coach was eventually let go from the team, which didn’t come as much of a surprise to Johnson; it became clear to the head coach that there was a lack of leadership because the relationship was built on a lack of trust.  

“I remember I asked a few of the players why they didn’t trust him, and I’ll never forget what they said:  ‘He doesn’t care about our story. He doesn't want to know my history or who I am as a person. If I can’t be seen by him as a human, I don’t want to know his defensive philosophies.’ 

Whether it’s an NFL stadium or your local community bank, sometimes people need to be reminded that they’re people. They make mistakes, and those mistakes can be fixed.  

“Creating that safe environment is key,” said Peterson. “When someone runs into a problem or has a concern, they’re going to feel comfortable calling you about it and figuring it out. If you didn’t have that environment before, it’s time to figure out how you’ll be implementing it now. Your workers are people before they’re bankers, after all.” 

Strength in Numbers  

Johnson and Peterson both point to collaboration as a key feature of modern leadership that assists teams in going above and beyond what they believed they were originally capable of. This is not only to say that leaders are collaborating with their employees – to access the true potential of a business, employees are being called on to lead, too.  

“Too many leaders have realized they can only get so far when they try to play Superman,” Peterson said. “Effective decisions are made when you have the proper information and all the right people committed to the decision. Always using collaboration is important, and I think sometimes leaders don’t understand that. Then they try to make these choices by themselves. They don’t see that they’re also human and might not have all the answers.” 

Peterson suggested that—if not implemented already—now is the perfect time to emphasize a collaborative approach. Involving your team in the process of making decisions and calling on others to be leaders are critical parts of crisis management mode, people are more likely to support what they’ve had a say in creating.  

“During these intense situations, we need all the leadership capacity we can muster,” added Peterson. “That means involving everyone and trying to fuel that collaboration. If you make them feel like they’re part of the decision, they’ll be on board and you’ll all pull in the right direction.” 

The foundation of this collaboration today is personal connection. Johnson noted that there's no such thing as leading others until you learn to lead yourself first. This requires becoming an expert in knowing yourself and creating a sense of community based on this ability to not only lead, but trust.  

“Leadership today is about connecting with people,” Johnson said. “It’s about making them feel valued, heard and respected. If you can do that as a leader, then setting goals, holding accountability, and making course adjustments become the easiest thing. You’ve created an environment of trust with your people, and they’re going to show you that they see that. That’s the criteria of leadership today.”  

Interested in learning more about topics like this? Dr. Fred Johnson will be speaking at the Bank Executives Conference on Feb. 3.

By, Alex Paniagua

SBA issued more guidance over the weekend around maximum loan amount calculations for this new round of PPP funding. In addition, SBA issued two procedural notices over the weekend to further clarify questions around the forgiveness process.   


The guidance around maximum loan amount calculations is helpful to interpret outstanding questions many of you had as I conducted our “PPP2021 – What’s Next” webinar on Thursday. It contains 14 FAQs and it is critical you promptly read through these ahead of any new applications you receive from borrowers. Importantly, the document states 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 of the Paycheck Protection Program Interim Final Rules. It further states that “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.” Since this was issued tonight, it is guidance in effect now. 

Most of the FAQs address how to calculate maximum loan amount based on the type of entity the borrower is, as well as scenarios where a business may not have been in existence for all of calendar year 2019. In addition, the guidance describes payroll costs using calendar year 2019 as the reference period for payroll costs used to calculate loan amounts. However, borrowers are permitted to use payroll costs from either calendar year 2019 or calendar year 2020 for their First Draw PPP Loan amount calculation. Documentation, including IRS forms, must be supplied for the selected reference period. 

WBA will update its Master FAQ document soon; however, to read the full SBA FAQs, please go HERE


SBA issued two procedural notices earlier this weekend. The first Notice is to inform PPP lenders of (1) the process for borrower resubmission of loan forgiveness applications using PPP Loan Forgiveness Application Form 3508S (SBA Form 3508S); (2) lender responsibilities to notify borrowers of (a) lender decisions to deny forgiveness in full, (b) SBA loan review decisions and borrower appeal rights to SBA’s Office of Hearings and Appeals (OHA), and (c) SBA remittance of loan forgiveness payments; and (3) lender responsibilities in the event of offset of PPP remittances to lenders by the Treasury Offset Program (TOP).  

Borrower Resubmission of a Loan Forgiveness Application using SBA Form 3508S  

A borrower that is eligible to use SBA Form 3508S, but applied for loan forgiveness using PPP Loan Forgiveness Application Form 3508EZ or 3508, may resubmit its loan forgiveness application to its lender using SBA Form 3508S at any time until SBA notifies the lender of a final SBA loan review decision or remits to the lender the PPP loan forgiveness payment. If a lender receives a timely borrower resubmission of a loan forgiveness application using SBA Form 3508S, the lender should promptly request the withdrawal of any lender loan forgiveness decision by notifying SBA through the SBA Paycheck Protection Platform. Resubmissions after SBA notifies the lender of a final SBA loan review decision or remits to the lender the PPP loan forgiveness payment are not permitted. After a borrower’s resubmission of a complete loan forgiveness application, the lender must issue a decision to SBA on the new loan forgiveness application not later than 60 days after receipt of the complete loan forgiveness application. When the lender issues its forgiveness decision to SBA on the new loan forgiveness application, SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its forgiveness decision to SBA. 

Notification Responsibilities

Lenders must keep borrowers informed of certain actions during the PPP loan forgiveness process. Specifically, lenders must notify borrowers in writing within 5 business days of any of the following:  

  • A decision by the lender to deny forgiveness in full.  
  • A decision by SBA declining a request for review by a borrower of a lender’s decision to deny forgiveness in full.  
  • A final SBA loan review decision, including an SBA loan review decision on forgiveness (whether approving or denying forgiveness in full or part).  
  • Remittance by SBA to the lender of the loan forgiveness amount, whether partial or full.  

The information that lenders must include with their notifications to borrowers is further described in this Procedural Notice. After sending the notification to the borrower, the lender must upload a copy of the notification correspondence to the SBA Paycheck Protection Platform. Lenders must take care to avoid providing erroneous information to borrowers regarding requests for SBA review of lender loan forgiveness decisions or regarding borrower appeal rights, which are limited to certain specific circumstances, as described in the Procedural Notice. 

TOP Offsets of Remittances to Lenders for Lender Debts 

Forgiveness payment remittances made by SBA to lenders are subject to offset for delinquent debts registered with the Treasury Offset Program (TOP) that the lender owes to the United States, a State, the District of Columbia, Guam, the Virgin Islands, or Puerto Rico. If a lender has a debt that is active for collection in TOP, any forgiveness payments remitted by SBA to the lender will be offset until the lender’s debt has been paid in full or otherwise resolved. If an SBA forgiveness payment is offset, in whole or in part, the lender must credit the borrower’s PPP loan for the full amount of the funds that SBA approved for remittance to the lender (before offset) as set forth in the Payment Notice generated by the SBA Paycheck Protection Platform or SBA’s final loan review decision. After the loan has been credited, the lender must report the remaining amount of the loan, if any, on the next SBA Form 1502 Report submitted by the lender for the PPP loan. Lenders that fail to timely and properly credit a borrower’s PPP loan for the full amount of the funds that SBA approved for remittance to the lender (before offset) will be subject to SBA action, as appropriate. Lenders can obtain further information about their debts in the TOP through the Treasury Department’s website

A copy of the full Procedural Notice is found HERE

Procedural Notice – Excess Loan Amount Errors 

This Notice informs PPP lenders of the effects of “excess loan amount errors” made by the borrower or the lender in completing the PPP Borrower Application Form (SBA Form 2483, SBA Form 2483-SD, or lender’s equivalent form) or the PPP Lender Application Form (SBA Form 2484 or SBA Form 2484-SD) for First Draw PPP Loans and Second Draw PPP Loans (collectively, “PPP loans”). An excess loan amount error is a borrower or lender error made in good faith that caused a borrower to receive a PPP loan amount that exceeds the borrower’s correct maximum loan amount under the CARES Act and the Economic Aid Act. An excess loan amount error does not include a knowing misstatement. Knowing misstatements may result in additional action, such as charges for fraud. 

The Procedural Notice provides detailed explanations and examples of the implications of excess loan amount errors, and lenders should take time to review this notice in its entirety. Notably, if an excess loan amount error is due in whole or in part to the lender’s failure to satisfy its obligations under the PPP rules and the document collection and retention requirements described in the lender application form (SBA Form 2484 and SBA Form 2484-SD), the SBA guarantee will not apply to the excess loan amount.  

A copy of the full Procedural Notice is found HERE

By, Alex Paniagua