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Tag Archive for: PPP

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Compliance, Member News, News

Executive Letter: Retention of PPP Loan Records is Now 10 Years

By Rose Oswald Poels

In an interim final rule published in the Federal Register this past Friday, August 23, SBA announced it has lengthened the required records retention for lenders that made loans under the Paycheck Protection Program (PPP) to ten years from the date of final disposition of each individual PPP loan. The interim final rule was issued without advance notice or public comment. The rule is effective August 22, 2024.

SBA stated that the interim final rule was necessary to harmonize PPP lender records retention requirements with subsequent legislation extending the statute of limitations for criminal charges and civil enforcement actions for alleged PPP borrower fraud to ten years after the offense. In particular, the Bank Fraud Enforcement Harmonization Act was signed into law in August 2022 which amended section 7(a) of the Small Business Act to provide, for both First Draw PPP Loans and Second Draw PPP Loans, that notwithstanding any other provision of law, any criminal charge or civil enforcement action alleging that a borrower engaged in fraud with respect to a PPP loan guaranteed by SBA shall be filed not later than 10 years after the offense was committed.

SBA further provided that the majority of lenders that participated in PPP are federally-regulated lenders having participated under existing SBA Form 750 (Loan Guaranty Agreement (Deferred Participation)) or by signing Form 3506 (CARES Act Section 1102 Lender Agreement). Under the Consolidated Forgiveness and Loan Review Interim Final Rule, federally-regulated lenders that participated in the PPP Program are currently required to retain their PPP loan records in accordance with the records retention requirements imposed by their federal financial institution regulator. SBA has determined that there do not appear to be any consistent or specific time requirements imposed by federal financial institution regulators that are applicable to PPP records retention as a whole. Instead, federally-regulated PPP lenders may implement and follow general internal records retention policies that are acceptable to their regulators. SBA believes it is likely that many of these general internal records retention policies allow for periodic destruction of certain records after a loan is paid in full, which for PPP would include payment in full through forgiveness or otherwise. SBA has extended the record retention period to allow law enforcement to continue to investigate fraud cases.

The interim final rule applies to all PPP lender loan records. This includes PPP loan applications that were withdrawn, approved, denied, or cancelled, and all other PPP lender loan records for PPP loans with an outstanding balance, PPP loans that have been forgiven, and PPP loans that are in repayment or have been paid in full by the borrower as of the effective date of the interim rule. To the extent that a federally-regulated PPP lender destroyed any PPP loan records before the effective date of the interim final rule in accordance with a general internal records retention policy that was acceptable to the PPP lender’s federal regulator, SBA will not enforce compliance by that federally-regulated PPP lender with respect to the PPP loan records that were destroyed before the effective date of this rule.

The extended records retention requirements apply equally to federally-regulated lenders (including lenders that executed an SBA Form 3506) and SBA Supervised Lenders (including lenders that executed an SBA Form 3507).

August 29, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Yellow-on-Light-Blue.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-08-29 07:59:362024-08-29 07:59:36Executive Letter: Retention of PPP Loan Records is Now 10 Years
Group of people working as a team
News

An Era of Evolution: Changing Roles of Bankers

By Hannah Flanders

It has been two years since March 11, 2020, yet its transformation is still felt far and wide. A time marked by swift transition and angst among all — bankers will recall the call to action by their community members to be there through this time of uncertainty.

2020 and 2021 were marked by Wisconsin bankers’ quick action in providing Paycheck Protection Program (PPP) loans to local businesses, increased digitalized services, and defense from COVID-related fraud. Bankers continually step up to the challenge of providing critical support and the sense of stability to communities throughout Wisconsin, a tradition as old as the industry itself, and the events of the last several years have only highlighted the dedication they have for one another.

At the onset of the pandemic, many bank branches in Wisconsin closed their lobbies and non-client facing employees were sent home to work. As restrictions have eased throughout the last two years, bankers not only have returned to the office with a greater sense of commitment to their communities, but a new perspective on their role within the bank.

“Even as the pandemic seems to be winding down, our bank’s focus continues to be protecting the health and safety of our associates, clients, and communities,” says Paul Hoffmann, president and CEO of Monona Bank. In an effort to provide this for the Monona Bank team, Hoffmann explains the bank’s effort in establishing a ‘COVID team’ responsible for keeping fellow employees updated regarding recent trends.

From IT departments and marketing officers to the frontline staff, many experienced a major shift in the way their position impacted the bank.

One of the immediate changes Loni Meiborg, senior vice president of organizational development at Fortifi Bank, Berlin, noticed as the pandemic wore on is the need to do more with less. “[Fortifi was] already running with lean branch staff, and we had to prepare for the worst — the potential of a total sweep of our team,” said Meiborg. “This led us to cross-train more aggressively, ask the team for schedule flexibility, and deploy support staff to front-line environments to remain open in some circumstances. We felt our integrity and reputation rested on the clients’ access to their money. Even when lobbies closed, we found a way to reassure clients that we’re here and open through this.”

Additionally, Meiborg’s role as senior vice president of marketing transitioned to its current title of senior vice president of organizational development during the pandemic to allow Fortifi Bank to further understand the functionalities of the bank in addition to prioritizing the strong relationship between employee and client. This trend was hardly exclusive to Wisconsin community banks, as bankers throughout the industry took on greater responsibility in ensuring the bank continued to operate smoothly and that it was also meeting the needs of both the customers and its employees.

The roles of bankers were also dependent on the physical location. Front-line staff faced the challenge of assisting customers in ways they never previously had and became responsible for
making bank offices and lobbies COVID-friendly. Those working partially or fully remote grappled with PPP-related coverage, assisting in departments apart from their own, and engaging with customers from a distance. However, though these challenges proved difficult, bankers were able to adapt to their circumstances, grow as team members, and gain valuable work experience in other aspects of the bank. These involuntary exercises in team building have given bankers a greater perspective on the operations of their bank and have helped prepare staff for the potential of future interruptions.

“Each spring, Westbury Bank holds a celebration for its staff and their hard work over the past year,” told Lisa Dixon, senior vice president of retail banking. “The final stages of planning were brought to a screeching halt in March 2020. Between remote workers, alternating branch staff, and limited in-person meetings, our staff quickly began to feel a sense of isolation. It was important for our bank to find new ways to engage team members safely and meaningfully.”

These activities included Friday bingo, weekly trivia, designing masks, and pumpkin carving shared via the intranet. Dixon explains that it continues to be important for banks to foster an environment of unity for the betterment of employee culture — even as bankers return to their offices and COVID-related restrictions subside.

Recently, the media has shown strives to rebound to the “way things were” before March 2020. Individuals and businesses alike have seen a dramatic shift in their day-today operations, but efforts to embrace the realities of the future in every opportunity and challenge it provides should not be forgotten.

In addition to the ways the roles of bankers have changed, the tools bankers now use to perform daily functions have adapted to the digital world. Technology streamlined through remote  work — Teams, Zoom, digital signatures, and many others — continue to be resources bankers rely on to perform their tasks and meet the needs of customers.

The digital evolution of banks and their bankers were critical in limiting exposure during the virus’s peak and continue to be important in talent retention and attracting new customers. During the pandemic, it was critical that banks invest in the technology that would keep their staff and customers connected. In the aftermath, these advancements have been important in keeping the banking industry relevant among constant development.

“Increased usage of our mobile app for banking, along with the desire to move toward an ‘appointment’ approach for our bankers, had been on our agenda for quite some time,” says Dixon. “The pandemic gave us the opportunity to further promote those services we knew our customers would love. They’ve [since] embraced them whole heartedly as it gives them the ability to bank on their schedule.”

Over the course of the pandemic, bankers throughout Wisconsin expanded their reach, reinforced their bonds with community members, and established loyal customers who understand the importance of banking local. “Clients have come to rely on us for guidance in the market, business economics, and planning for their future,” says Meiborg. “We proved that we were reliable when the world wasn’t.”

“[Monona Bank] has never had so many unsolicited recommendations and referrals as the past several years, which I attribute to being there when they needed us when others were not,” says Hoffmann. “We helped many clients keep their businesses open and their employees working. This helped us build loyalty and trust with our clients and community.”

Bankers have truly stepped up and into their communities over the last two years. In reassuring Wisconsinites that their community banks were the safest place not only to keep their money, but to obtain trusted guidance and comradery, the industry has proven itself to be a reliable asset to every community. As the banking industry continues to evolve and grow, bankers prove themselves as dedicated and adaptable for not only the benefit of their communities, but for their team as well.

April 11, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/10/teamwork-hands-community-2.jpg 533 800 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-04-11 07:57:362022-04-11 07:57:36An Era of Evolution: Changing Roles of Bankers
Compliance, News

SBA Releases New Procedure for SBA Loan Review of Partial Approval Forgiveness Decisions

On January 28, SBA released Procedural Notice 5000-827666 regarding SBA loan reviews of PPP Lender partial approval forgiveness decisions. The notice outlines a new process to allow PPP Borrowers to request an SBA loan review of partial approval forgiveness decisions issued by their PPP Lenders. The procedures in the notice apply to loan forgiveness decisions submitted by Lenders to SBA through both the regular forgiveness process as well as the Direct Borrower Forgiveness process. The notice is effective January 27, 2022.

The notice reiterates the process for a partial approval forgiveness decision and the steps that need to be taken by the Lender when it receives a forgiveness application from a Borrower. The notice also outlines a new process for borrower requests of SBA loan review of a partial approval forgiveness decision.

Starting from the effective date of the notice, when a Lender receives a forgiveness remittance from SBA on a partial approval decision, including where the Lender required the borrower to apply for forgiveness in an amount less than the full amount of the loan, the Lender’s post-forgiveness remittance notification must inform the borrower that the borrower has 30 calendar days from receipt of the notification to seek, through the Lender, an SBA loan review of the Lender’s partial approval decision. Within five calendar days of a Lender’s receipt of a borrower’s timely request for an SBA loan review, the Lender must notify SBA through the Platform. The Lender’s notice to SBA of the borrower’s timely request for review must include a copy of the Lender’s notice to the borrower of the reason(s) for the Lender’s partial approval decision. SBA reserves the right to review the Lender’s decision at its sole discretion.

Additionally, within 30 calendar days of the date of the notice, Lenders must notify all of their borrowers on loans that previously received a partial forgiveness remittance from SBA as a result of Lender partial approval decisions, including where the Lender required the borrower to apply for forgiveness in an amount less than the full amount of the PPP loan, that the borrower has 30 calendar days from receipt of the Lender notification to seek, through the Lender, an SBA loan review of the Lender’s partial approval decision. Within five calendar days of the Lender’s receipt of a borrower’s timely request for an SBA loan review, the Lender must notify SBA through the Platform. The Lender’s notice to SBA of the borrower’s timely request for review must include a copy of the Lender’s prior notice to the borrower of the reason(s) for the Lender’s partial approval decision. Again, SBA reserves the right to review the Lender’s partial approval decision at its sole discretion.

In either circumstance, if SBA selects the loan for an SBA loan review as a result of the borrower’s request, the borrower must continue to make payments on the remaining balance of the loan, and the loan is not deferred.

If SBA determines, as a result of the SBA loan review, that the borrower is entitled to forgiveness in an amount greater than the Lender’s partial approval decision and SBA has previously remitted a partial forgiveness payment to the Lender, SBA will remit an additional forgiveness payment to the Lender to make up the difference. SBA will issue an additional Notice of Paycheck Protection Program Forgiveness Payment (Payment Notice) to the Lender.

If the SBA loan review results in a higher forgiveness amount, but less than full forgiveness, SBA will also issue a final SBA loan review decision to the Lender. The Lender must provide a copy of the Payment Notice and, if applicable, the final SBA loan review decision, to the borrower within 5 business days of the remittance and comply with applicable requirements of the Lender Responsibilities Notice. If a borrower has begun making payments on their loan and the SBA loan review results in full forgiveness, the Lender must refund all payments made by the borrower.

If the SBA loan review results in a higher forgiveness amount, but less than full forgiveness, the lender must re-amortize the PPP loan and refund any excess payments made by the borrower.

Note: PPP Borrowers that have received full denial forgiveness decisions from their Lenders should continue to follow the process outlined in the Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as amended by the Economic Aid Act (86 FR 8283, February 5, 2021), as amended.

Lenders may call the Lender Hotline at (833) 572-0502 for live assistance regarding PPP access and support, policy questions and procedures, and Capital Access Financial System (CAFS) and SBA’s Electronic Transmission (E-Tran) systems support. Questions concerning the notice may be directed to the Lender Relations Specialist in the local SBA Field Office.

Notice 5000-827666 is posted on the WBA website.

January 31, 2022/by Jaclyn Lindquist
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Dark-Blue-on-Light-Blue.jpg 972 1921 Jaclyn Lindquist https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Jaclyn Lindquist2022-01-31 14:52:282022-01-31 17:21:17SBA Releases New Procedure for SBA Loan Review of Partial Approval Forgiveness Decisions
News, Resources

It’s Time to Take Action in 2022

Ken Thompson HeadshotBy Kenneth D. Thompson, WBA Board chair, president and CEO of Capitol Bank, Madison

January marks the halfway point of my time as WBA chair and as we transition into a new year, there are undoubtedly new things to look forward to as an industry and as an association.

Our successes in 2021, many of which related to the ongoing uncertainty of the COVID-19 pandemic, taught us all valuable lessons I hope can be brought with us into the new year. From low levels of past-due loans throughout our industry to excess liquidity, it’s safe to say that stepping outside of our routine has resulted in spectacular results.

Looking onward to 2022, I encourage bankers to approach challenges with the same curiosity we have for the past two years. As our industry continues to grow, how will each of us lead the way in making Wisconsin banks efficient, diverse, and robust?

WBA has long known that banks are cornerstones in our communities and as such, should be leaders in embracing societal developments. Technology, for both our customers and employees, has been and should continue to be an aspect that sets our industry apart. In embracing these digital channels, banks have a unique ability to meet the expectations of customers while also supporting them with cybersecurity and best technological practices.

Our ability to advance diversity, equity, and inclusion (DEI) efforts, as well as offer flexibility to employees, has the potential to set our industry apart. This is especially important to consider as we navigate through a competitive hiring and retention landscape.

As we all envision a brighter 2022, it serves us to remember that innovative solutions, such as PPP and advances in online banking, have provided our communities with much-needed assistance in the past. We must not be held back by what we are familiar with. This pandemic has taught us all that some of the most effective answers may not be the ones that have been tried before.

It is essential for banks to approach these situations with caution instead of resistance and as always, WBA remains a valuable resource in education, advocacy, and community involvement for each of us as we look forward to what’s to come in 2022.

January 3, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Dark-Blue-on-Light-Blue.jpg 972 1921 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-01-03 13:57:002022-01-03 15:15:08It’s Time to Take Action in 2022
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