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

SBA has announced that the PPP will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Mon., Jan. 11 and Second Draw PPP Loans on Wed., Jan. 13. The definition of community financial institutions can be found below. 

The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on Jan. 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.  
Read the SBA announcement here.

New PPP FAQs to Reflect Changes Made by Economic Aid Act 
A new series of frequently asked questions (FAQs) has been created to address revisions to SBA’s PPP as made by the Economic Aid Act. The information is in addition to the recap previously released in the WBA Omnibus Law Summary. Any item updated or revised by the Economic Aid Act has been highlighted.   

WBA will continue to update the FAQ document, as necessary. A separate FAQ document to address SBA’s PPP Second Draw Loans interim rule is currently in the works and will be made available as soon as possible.   
Read the FAQ

Heather MacKinnon, WBA VP – Legal, contributed to the contents of this article. 

New DOL Guidance Regarding FFCRA  
As previously mentioned in last week’s release of the WBA Omnibus Law Summary, WBA stated it would share any guidance issued by the Department of Labor (DOL) regarding paid sick leave and expanded family and medical leave under FFCRA. DOL has since issued guidance. The guidance comes in the form of new FAQs added to DOL’s existing FFCRA guidance. The two questions (#104 and 105) may be found at the end of the listing, designated by a 12/31/2020, date.  

The questions outline that an employer is no longer required to provide FFCRA leave after December 31, 2020, but that the coverage is now voluntarily until March 31, 2021. The FAQs also confirm employers are still responsible for FFCRA leave that occurred prior to December 30, 2020. Lastly, the guidance also provides a link to an IRS website if employers have questions about claiming the refundable tax credit for qualified FFCRA wages. The DOL guidance may be viewed here.

PPP Definition of Community Financial Institution
While the phrase "community financial institutions" may be familiar due to your bank’s relationship with the Federal Home Loan Banks, this phrase is used uniquely in connection with the new law. Per the Economic Aid Act, a Community Financial Institution (CFI) is one of the four types of lenders:   

  • Community Development Financial Institution (CDFI) 
  • Minority Depository Institution (MDI) 
  • Community Development Corporation (CDC) 
  • Microlender Intermediary  

The source for this definition is 15 USC 636 (xi). Unfortunately, it does not include banks regardless of size unless a bank is also a CDFI or MDI. 

WBA understands the portal will likely open for all banks the week of January 18. There is no public confirmation of this yet; however, WBA is encouraging its members to be prepared for the likely broader opening of the portal that week.

By, Alex Paniagua

WBA staff has created this document on PPP FAQs due to the Economic Aid Act.

This document was last updated on 1/8/2021.


By, Eric Skrum

WBA staff has created this master document outlining changes made in the Consolidated Appropriations Act of 2021 that affect the banking industry.

This document was last updated on 1/7/2021.


By, Ally Bates

Chairman Sanfelippo and Members of the Committee:   

My name is Michael Semmann, Executive Vice President and Chief Operations Officer for the Wisconsin Bankers Association, the state’s largest financial industry trade association. WBA represents 225 commercial banks and savings institutions, their nearly 2,300 branch offices and 28,000 employees.

On behalf of its membership, WBA supports 2021 Assembly Bill 1, specifically the provisions protecting Wisconsin businesses from liability claims related to contraction or exposure to COVID-19 in the workplace.

Wisconsin’s financial institutions are on the economic frontlines of this crisis and have been since its inception. Before government programs were even developed, financial institutions across the state were already proactively engaging with their customers to determine the impact the COVID-19 pandemic was having on their financial well-being.

Over the course of the last ten months, and from the moment emergency health declarations were made at the state and federal level, WBA began hearing concerns from customers about their financial stresses. WBA continues to hear stories of economic hardship as people continue to take steps both on their own and in response to various actions to help mitigate the spread of the virus.  

The pandemic has indeed created challenging situations for individuals and businesses. Banks, as a steadfast and essential industry, have worked overtime as a resource in these uncertain times, especially through the execution of the Paycheck Protection Program (PPP). Wisconsin banks helped facilitate nearly 90,000 loans to small businesses worth over $9.9 billion – ranking the state as  18th best in the country by volume. Throughout the pandemic, drive-thru lanes and lobbies have remained open and staffed by personnel dedicated to customer service.

Wisconsin’s banks have a unique perspective in the state economy and admirably stepped up to help Wisconsin consumers. They have been part of the solution to the hardships this pandemic has created. A key component of our state’s economic recovery is for banks to continue to serve their customers smoothly and help them maintain access to their finances in the months ahead. If banks are taking the necessary precautions and actions to keep their customers and employees safe, they should be shielded from predatory lawsuits. AB 1 accomplished this and many other goals.

WBA appreciates the efforts by the committee to address liability retroactively without affecting suits which have already been filed, and extend protection of individuals, businesses, schools, and universities from liabilities related COVID-19. We applaud the efforts to ensure compliance with applicable statutes, rules, and guidance should be substantial and not absolute.

Those who aid in the state and the public during a pandemic or other emergency should have assurance that their actions and good intentions are met with in-kind action by government. Wisconsin businesses, non-profits, schools, and homeowners need a measure of consistency and security as we turn the page to 2021 and look to emerge from the COVID-19 pandemic.

I want to thank the members of this committee, along with the other members in the Assembly and Senate for working on this important legislation to ensure everyone in Wisconsin can move forward with confidence.

For more information, contact WBA’s Mike Semmann at 608-441-1206, or John Cronin at 608-441-1215, 

By, Alex Paniagua

Yesterday, Assembly Speaker Robin Vos introduced a bill related to state government actions to address the COVID-19 pandemic. The 63-page bill extends the time limit for emergency rule procedures, provides an exemption from emergency rule procedures, and grants rule-making authority. A Senate companion bill is expected shortly. The legislature is expected to take quick action, with a hearing before the Assembly Health Committee today that WBA’s Executive VP and COO Michael Semmann will submit written testimony supporting liability provisions in the bill and the bill as a whole. Potential floor votes may come as early as this week. Out of 44 provisions, key points include: 

  • Creating a liability exemption for an entity for the death of or injury to an individual or damages caused by an act or omission resulting in or relating to exposure (directly or indirectly) to COVID-19 in the course of or through the performance or provision of the entity's functions or services. 
  • Prohibiting employers from requiring their employees to receive a vaccine against the SARScoV-2 coronavirus, or showing proof of having received such a vaccine. 
  • Allowing the Board of Commissioners of Public Lands (BCPL) to offer loans to a city, village, or town to ensure that a municipal utility is able to maintain liquidity through April 15, 2021. 
  • Permit extension: Specify that a person who has received a covered approval relating to challenged permit or challenged plat or survey may obtain a term or duration extension by notifying the governmental unit that issued the covered approval of the person's decision to exercise the extension not less than 90 days before the expiration of the unextended term or duration of the covered approval. 
  • Changing local health order restrictions such that the duration of any order issued by a local health officer to close or restrict capacity of businesses to control outbreaks and epidemics of the 2019 novel coronavirus may not exceed 14 days unless the governing body of the local governmental unit in which the order is intended to apply approves, by a vote of two-thirds of the elected members, an extension of the order, with each extension not to exceed 14 days. For these purposes, define a "local governmental unit" as a city, village, town, or county. 
  • Requiring the Governor submit a plan to the Joint Committee on Finance for expenditure of federal COVID-19 funds under a 14-day passive review process. 
  • Occupancy prior to final inspection: specify that a dwelling unit occupied in accordance with local ordinances before undergoing all inspections for compliance with the one- and two-family dwelling code may be granted an occupancy permit if the dwelling unit later passes a final inspection for compliance with the one and two-family dwelling code.  
  • Extending the 2019 Act 185 waiver of the unemployment insurance (UI) waiting week requirement through the week ending March 13, 2021. Currently, under Act 185, the waiting week requirement is waived from March 12, 2020, through February 7, 2021. 
  • Requiring the Department of Workforce Development to develop a plan to reduce the number of weekly claims for UI benefits in processing to levels comparable to those in January 2020, and February 2020 and to include measures to ensure maintenance of program integrity and fraud detection. 

"Banks have a unique perspective in the state economy and admirably stepped up to help Wisconsin consumers and have been part of the solution to the hardships this pandemic has created,” Semmann states in his testimony. “A key component of our state’s economic recovery is for banks to continue in their abilities to serve their customers smoothly and help them maintain access to their finances in the months ahead. If banks are taking the necessary precautions and actions to keep their customers and employees safe, they should be shielded from predatory lawsuits. AB 1 accomplished that, and many other goals.

WBA appreciates the efforts by the committee to address liability retroactively without affecting suits which have already been filed, and extend protection of individuals, businesses, schools, and universities from liabilities related COVID-19. We applaud the efforts to ensure compliance with applicable statutes, rules, and guidance should be substantial and not absolute.” 

Read a summary of the provisions here

By, Alex Paniagua

As banks across Wisconsin work to disburse recently received ACH files and negotiate the latest round of Economic Impact Payment (EIP) checks, banks need know there are differences between this round of EIPs and the previous disbursement. Under the newest round, if Treasury issues a check for the payment, “40436” will appear first in the MICR-line of the check. Treasury began printing checks last week and the first run of checks will have a payment date of January 6, 2021. If the payment is sent via ACH file, the ACH data will include “XX” in the ACH identifier (XXTAXEIP2) and the check symbol. The new data is meant to help identify the second round from a first round EIP. The distinction is important as this second round of EIPs is not subject to garnishments.  

If the bank receives an EIP via ACH for an account that is closed, Treasury and IRS have instructed that the bank is to return the ACH as account closed. This is standard procedure. See Chapter 4 of Treasury’s Green Book regarding the processing of electronic payments.

The new law provides that individuals alive on January 1, 2020, are entitled to an EIP this round. IRS is the agency responsible for verifying eligibility for payment before disbursement of an EIP. If the bank is asked to negotiate a Treasury-issued EIP check made payable to a deceased person, bank’s normal procedures regarding how it negotiates a check made payable to a decedent should be implemented. As is true for any check made payable to a deceased person, the bank should be careful to ensure it has a proper endorsement regarding the deceased party.  More information regarding the newest round of EIPs may be viewed here. Treasury’s Fiscal Bureau has created FAQs regarding bank operations which may be viewed here

By, Ally Bates

The Families First Coronavirus Response Act (FFCRA) has not been extended. This means that after December 31, 2020, employers with fewer than 500 employees are no longer required to provide special paid sick leave and expanded family medical leave related to COVID-19. 

However, the recently signed Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA or COVID Relief Bill) does extend certain FFCRA tax credits for employers through March 31, 2021.  As a result, employers who, between January 1, 2021 and March 31, 2021, voluntarily provide paid sick leave and expanded family medical leave will receive tax credits in same fashion had the leave been provided before December 31, 2020.   

The tax credit extension does not change or increase the amount of paid sick leave or expanded family medical leave available under FFCRA. If an employee has used all available FFCRA paid sick leave and expanded family medical leave in 2020, the employee does not receive additional FFCRA leave despite the extended tax credit period. Also, the qualifying COVID related reasons for when an employee may take leave, the caps on the amount of pay an employee may be entitled to receive, and all documentation requirements of FFCRA remain the same.  

Management should consider whether to continue to offer the coverage, should notify staff, and update any FFCRA coverage notices accordingly. Careful recordkeeping should also be maintained to ensure FFCRA-related leave limits are not inadvertently exceeded. WBA is hopeful the Department of Labor will release updated guidance regarding the voluntary coverage, including to clarify that carryover of expanded family medical leave from 2020 into 2021 is permissible if an employer’s FMLA year resets during the extended period and the employee has unused FFCRA-related leave. WBA will share any updated guidance if it becomes available. 

By, Ally Bates

With thousands of Wisconsin business employees successfully working remotely during the coronavirus pandemic, companies are reevaluating how much office space they’ll need in the future. 

That may lead to smaller offices for some companies. For others, it could mean taking unoccupied square footage and adapting it to spread out employees as they come back amid a continued – but hopefully lessened – threat of COVID-19. For companies looking to consolidate office space as a cost-cutting move while the economy rekindles, it might mean adaptations such as two unaffiliated firms in a big office building sharing common areas that aren’t always in use, like meeting rooms. 

As with many industries disrupted by the pandemic, the commercial real estate industry is in the process of trying to figure what the market will look like in 2021 and beyond. 

“I believe that it’s going to be right-sized,” said Tracy Johnson, president and chief executive officer of the Commercial Association of Realtors-Wisconsin. “For some it’s going to be bigger. For some it’s going to be smaller.” 

When the pandemic struck in March, commercial real estate activity – particularly office and retail – took a huge hit. Lockdowns and concern over spreading and catching the novel coronavirus that causes COVID-19 kept employees and consumers at home. 

While businesses deemed “essential” (such as food providers and medical facilities) never shut down, many non-essential retail companies that relied heavily on foot traffic couldn’t make it. 

Now that the virus and its treatment are better understood – and with a vaccine on the way – real estate brokers and landlords are hoping for a recovery in 2021. Johnson said it might take a few more quarters, however, to begin seeing how it will shake out. 

From the beginning of the pandemic, some companies have wondered whether they suddenly might have too much real estate. 

“A lot of business are saying they’re looking to cut expenses in the future, and real estate is the second biggest piece of that,” Johnson said. “So I think it’s going to come in the form of headcount and possibly right-sizing real estate. But there are a lot of things going on.” 

For example, in the second and third quarters of 2020, landlords worked with tenants to renegotiate leases, sometimes for shorter terms, so businesses could try to determine what their real estate needs would be going forward. 

“I think that creates opportunity, though, in Q2 and Q3, to come back to the table and really be that strategic adviser for the company,” Johnson said. “It strengthened the relationships with the landlord and the building owners to say, ‘How are we going to work through this together?’” 

In metro Milwaukee, the state’s biggest commercial real estate market, the vacancy rate at the end of September was 15.1%, according to a report by the Commercial Association of Realtors-Wisconsin. That's up from 14.6% on June 30.  Among vacancy rates, Western downtown Milwaukee’s Class A office space rate stood out 42.2%. 

Madison’s office vacancy rate was about 9%, Johnson said. 

Joe Fazio, CEO of Commerce State Bank, said the pandemic may cause businesses to reconsider whether having a big office in a large metro area is as desirable as it had been. He said the word that best describes the situation is “uncertain.” 

“I think it leaves some question as it relates to commercial office space and large residential apartment towers,” he said.  

Still, a number of commercial real estate projects in downtown Milwaukee that were under way have advanced even during the pandemic. 

When it comes to retail space, the issues are more short-term, Fazio said. 

“You say, ‘How many shopping centers, how many small business centers, how many strip malls are going to be vacant?’ That probably concerns us a little more, and we want to be very selective on that,” Fazio said. “The pandemic has accelerated the whole online shopping experience. I don’t know that that comes back as robust.” 

Nick Egelanian, a Maryland-based retail industry consultant who runs SiteWorks Retail Real Estate Services, recently told the Commercial Association of Realtors-Wisconsin and the Milwaukee Journal Sentinel that changes in the way people shop might eventually leave Wauwatosa’s Mayfair Mall as the only traditional retail regional shopping center in the metro Milwaukee area. 

The good news for malls is that they typically are located in easy-access areas where other types of businesses can re-purpose or redevelop. 

Commercial real estate broker Kevin Schmoldt’s specialty is commercial real estate, and he contends the situation isn’t as gloomy as often portrayed or perceived. 

Schmoldt, managing director of the Milwaukee office of the firm Newmark Knight Frank, said there was “a pause” in business in March through early June in the number of new deals. 

“Landlords were primarily focused on just protecting existing tenants and those relationships and working with those tenants to help get them through,” Schmoldt said. “There really wasn’t a lot of proactive efforts to fill vacancies, just because there wasn’t an audience for it. Nothing was happening.” 

But later in June and in July, as people became more comfortable with safe practices for the pandemic and had a better sense of whether their business could handle the challenges, leasing and renewals picked up again, he said. 

“I would say June-July is really when we sort of started to get back into the proactive gears – renewing tenants, signing new leases, things of that nature,” he said. “And with each month since I would say it’s become busier and busier.”  

He added: “As we sit here in December, it’s certainly not back to what it was a year ago today. But we’re very busy.” 

Schmoldt said the stressors of the pandemic are driving some operations out of business. The category closing most often is restaurants. That’s no surprise, but what might be surprising is that the category of business most often wanting to move into vacant space also is restaurants, he said. 

“Maybe it’s like an executive chef or someone who’s been managing a restaurant who maybe lost their job because the restaurant they worked for closed, but they are good at what they do and they are taking the opportunity,” Schmoldt said. 

Such incoming restaurateurs often are seeking “second generation” space, “meaning it already has a hood and a cooler and all the things a restaurant looks for,” he said.  

“And they are going to open their own restaurant at very little cost to themselves because someone else already built it out for them,” Schmoldt said. 

The industry also is seeing more medical-related business – optical, dental, orthodontic, chiropractic – and service companies moving into neighborhood and strip center retail space that has opened up, he said. 

“We’re getting a ton of interest from these specialty medical groups.  I think a big part of the reason is that from a safety standpoint, if you had the choice to, say, visit your dentist where you had to go into an office building and traverse a corridor or use an elevator – or if you have the opportunity to pull up to retail center and park right in front of the store and walk through a single door and you’re inside the space – I think the choice is pretty clear as a consumer what you’d rather do,” Schmoldt said. 

The market for apartments remains hot, in large part because there is a shortage of affordable single-family homes and condos in many markets, Johnson said. In this tough time for the travel industry, hotel projects could consider converting to apartments, she said. 

Wisconsin, while taking its lumps during the pandemic, hasn’t seen its commercial real estate market suffer some of the gut punches of bigger communities. The New York Times reported last week that the pandemic is hammering the New York city’s commercial real estate industry so hard it threatens the future of its business districts and municipal finances. 

The Times wrote that damage caused by having fewer workers in office towers and the closure of many stores is worse than many experts had predicted. One possible solution: converting more than a million square feet of Manhattan office space into housing. 

While some retail space in Wisconsin is being redeveloped to include housing – and more probably will be – the situation doesn’t seem as dire here. 

“As a conservative market, there was never too much retail built in our state,” Schmoldt said. 

Schmoldt said he has been particularly impressed by small-business owners who have met challenges and adapted during the pandemic and the economic hardships it has caused. That hard work and resilience should pay off. 

“For the tenants that do survive, I’m just super optimistic on what they’re going to find at the end of ‘21 and into ‘22 when we’re really back and healthy as a country, as a society,” Schmoldt said. “Because if they can keep working and reap rewards of what they’ve done, it’s going to be incredible.” 

Paul Gores is a journalist who covered business news for the Milwaukee Journal Sentinel for 20 years. Have a story idea? Contact him at  

By, Alex Paniagua

The news that multiple coronavirus vaccines are reaching levels of more than 90% effectiveness and being distributed is the first real wave of optimism the public has received regarding an end to the current crisis. While this is an imperative step toward success, U.S. Rep. Bryan Steil stated in an interview with WBA that defeating this pandemic is about more than just stopping the virus’ spread.

“Not everyone has been impacted the same by this virus,” said Steil. “Some individuals and employers have seen a very minimal impact, while others have been impacted significantly. Managing an effective approach consists of providing targeted relief to individuals who have fallen on challenging times due to no fault of their own, rather than providing a broad, blanket approach that we did originally.”

The issue, as Steil explained it, is that the money used to relieve the crisis will bear a burden on the U.S. for generations. By understanding where the funds are most needed now, the hope is to be mindful of the growing national debt.

“It’s important to note how far we’ve come into debt, and Wisconsin bankers are cognizant of that,” said Steil. “We’re ultimately taking on debt that is at some point going to be paid off. The reason I put so much time and effort into having the relief be targeted and be thoughtful of taxpayer’s dollars is the awareness of where we’re at from a national debt standpoint.”

As of October, the U.S. surpassed $27 trillion (about $83,000 per person) of debt with the numbers still climbing. Steil added that there are CARES Act dollars that have been previously allocated in Wisconsin that remain unspent.

Using money that has already been allocated will help to limit federal dollars that would be used. A primary concern is the possibility of going beyond what is required for the given situation. Assuring this does not happen is a crucial way to strengthen the economy while still being considerate of people’s livelihoods.

Gov. Tony Evers has voiced his thoughts on the matter as well, stating that “unless we get additional support from Congress, our state will have to foot the bill for our response after the New Year."

Steil further added how significant of a role Congress has played in Wisconsin’s response to the virus.

“Congress acted appropriately in the beginning of the pandemic by implementing the Paycheck Protection Program,” he said. “It helped ensure that 150,000 workers in southeast Wisconsin received their paychecks during the pandemic. We were able to keep those businesses and jobs in existence during the early days of the pandemic when it was a new challenge, but it’s critical that we continue to keep our smaller employers going through this difficult time. Only then can they come out on the other side and once again flourish.”

Much of Steil’s time is currently spent speaking with workers and job creators about the importance of navigating their way through this turbulent business climate. It is an uphill battle that many are facing, but he is confident that if the proper steps are taken and a stimulus package is released sooner rather than later, our state’s economy will come back stronger than ever.

“There were reasons that we had to flood the market with liquidity early on, but we need to continue being good stewards of taxpayer’s dollars,” Steil emphasized. “We can do that by providing targeted relief that is going to be critical in successfully defeating the virus. Wisconsin bankers understand that ending the pandemic goes beyond just ending the disease.”

Interested in topics like this? Join WBA for an economic discussion at the Midwest Economic Forecast Forum co-hosted with Indiana Bankers Association.  

By, Alex Paniagua