After several days of intense negotiation that had everyone biting their nails, Senate Democrats and Republicans agreed on legislation to provide relief to American businesses and individuals from the effects of the novel coronavirus and the harsh—but necessary—restrictions imposed in an effort to slow its spread. 

The White House and U.S. Senate leadership (finally) reached an agreement on a massive coronavirus relief package bill in the early hours Wednesday morning (March 25), and the Senate voted and passed the bill at midnight this morning (March 26).  

Paired with $4 trillion in new liquidity from the Federal Reserve, the $2 trillion package is intended to provide significant relief to workers and businesses, Phase 3 of the government’s response to the pandemic. “The Senate stepped up,” Majority Leader Mitch McConnell (R-Ky.) said on the floor prior to the vote. “This is not a stimulus bill. It’s emergency relief.”  

“We’ll win this fight because Americans will find a way to stand together, even while standing six feet apart,” McConnell continued. Minority Leader Chuck Schumer (D-N.Y.) said the bill is still flawed but “much, much better” after Senate Democrats’ actions and is ready for “swift approval,” by the House. Schumer yielded the floor calling the bill “imperfect, but necessary.” 

S. 3548, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), weighs in at a colossal 38,531 words. Since you don’t have that kind of time, here’s a brief overview of what Wisconsin banks need to know (WBA will continue to provide updated information as it becomes available):  

Key information for banks:  

Deposit Guarantee Authority (Modified TAG). Authorizes the Federal Deposit Insurance Corporation (FDIC) to temporarily establish a debt guarantee program to guarantee debt of solvent insured depositories and depository institution holding companies. Noninterest-bearing transaction accounts may be treated as a debt guarantee program. The National Credit Union Administration (NCUA) is given authority to temporarily increase share insurance coverage for noninterest-bearing transaction accounts. Such authorities, programs, guarantees, and increases shall terminate no later than Dec. 31, 2020. 

Temporary Relief for Community Banks. Requires the federal banking agencies by interim rule to temporarily reduce the Community Bank Leverage Ratio (CBLR) for qualifying community banks (from 9% to 8%) and provides for a reasonable grace period if a community bank’s CBLR falls below the prescribed level. The interim rule expires at the earlier of Dec. 31, 2020, or the date on which the national emergency declaration related to coronavirus is terminated. 

Temporary Relief from Troubled Debt Restructurings. A financial institution may elect to suspend requirements under U.S. Generally Accepted Accounting Principles (GAAP) for loan modifications related to the coronavirus pandemic and suspend any such determination regarding loans modified as a result of the effects of the coronavirus. Federal banking agencies and the NCUA must defer to a financial institution to make a suspension. Such election may begin on March 1, 2020 and last no later than 60 days after the lifting of the coronavirus national health emergency. 

Credit Protection During Covid-19. This section requires that furnishers to credit reporting agencies who agree to account forbearance, or agree to modified payments with respect to an obligation or account of a consumer that has been impacted by COVID-19, report such obligation or account as “current” or as the status reported prior to the accommodation during the period of accommodation unless the consumer becomes current. This applies only to accounts for which the consumer has fulfilled requirements pursuant to the forbearance or modified payment agreement. Such credit protection is available beginning Jan. 31, 2020 and ends at the later of 120 days after enactment or 120 days after the date the national emergency declaration related to the coronavirus is terminated. 

Foreclosure Moratorium and Consumer Right to Request Forbearance. Prohibits foreclosures on all federally backed mortgage loans for a 60-day period beginning on March 18, 2020. Provides up to 180 days of forbearance for borrowers of a federally backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency. Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. The authority provided under this section terminates on the earlier of the termination date of the national emergency concerning the coronavirus or Dec. 31, 2020. 

Forbearance of Residential Mortgage Loan Payments for Multifamily Properties with Federally Backed Loans. Provides up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan who have experienced a financial hardship. Borrowers receiving forbearance may not evict or charge late fees to tenants for the duration of the forbearance period. Applicable mortgages include loans to real property designed for five or more families that are purchased, insured, or assisted by Fannie Mae, Freddie Mac, or HUD. The authority provided under this section terminates on the earlier of the termination date of the national emergency concerning the coronavirus or Dec. 31, 2020. 

Temporary Moratorium on Eviction Filings. For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties, or other charges to the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994. 

Also of interest:

Small Business Interruption Loans: Creates a $350 billion loan program for small businesses. The SBA 7(a) guarantee program is expanded for the period of March 1, 2020 through Dec. 31, 2020 to more businesses and a maximum loan amount of $10 million for purposes of payroll support, mortgage or rent payments, utilities, and other debt obligations incurred prior to the covered period. Fees are waived during the same period, as well.  

Non-SBA Lenders: Gives authority to the Treasury and the Small Business Administration to establish criteria for financial institutions that do not already participate in SBA lending to participate in the program. 

Corporate Tax Delay: Delays the due date for corporate income and payroll taxes to Oct. 15, 2020.  

Relief Loans and Guarantees: Authorizes the Treasury Secretary to make or guarantee up to $208 billion in loans: $50 billion for passenger air carriers, $8 billion for cargo air carriers, and $150 billion for other businesses directly impacted by the coronavirus. 

Additional Oversight: Creates a Treasury Oversight Board and Special Inspector General for pandemic recovery to scrutinize the lending decisions and detect abusive or fraudulent behavior. Additionally, the Treasury must quickly make public the names and terms of all loans and loan guarantees.  

Businesses granted these loans are subject to additional restrictions, including stock buy-backs and increases to executive compensation. 

State and Local Government Assistance: State, local, and tribal governments will receive $150 billion—distributed at the county and state level—to help them weather tax revenue drop-offs and costs of fighting the pandemic. This includes $8 billion set aside specifically for tribal governments. 

Unemployment/Paid Leave: Extends unemployment insurance by 13 weeks and provides for a four-month increase to unemployment insurance (raising the maximum benefit by $600 per week) as well as expanding the definition of “unemployed” to cover gig workers, freelancers, and other self-employed individuals who did not previously qualify for unemployment. It will also allow companies to furlough workers so they can stay on as employees, allowing businesses to quickly restart after the crisis is over. 

Support for individuals: Includes direct payments of $1,200 for adults ($2,400 for joint filers) and $500 per child to workers with incomes up to $75,000 per year ($150,000 for joint filers) before phasing out.  

Healthcare: Allocates $100 billion in direct aid to healthcare institutions, over $4 billion to health agencies, $200 million to nursing homes, and $45 billion to FEMA’s Disaster Relief Fund. 

The stimulus bill now moves to the House for approval, and then to President Donald Trump’s desk. Treasury Secretary Steven Mnuchin, who negotiated the funding package with senators, urged House Speaker Nancy Pelosi to pass the Senate version of the funding package without changing it, adding that President Trump would “absolutely” sign it as-is.