November 25, 2020-...------------------------------------------------------------------------------------------------No copyright infringement intended
Vendor * Spotlight

Treasury Declines to Extend CARES Act Facilities; Addresses Deductibility of Expenses

Treasury Secretary Steven Mnuchin declined to extend the Main Street Lending Program and other CARES Act facilities scheduled to expire Dec. 31, and he asked the Federal Reserve to return the $455 billion in unused funds to Treasury.
 
In a letter to Fed Chair Jerome Powell, Mnuchin said that in the "unlikely event" that these programs need to be reestablished in the future, the Fed can request approval from Treasury and funding from Congress.
 
The Fed responded with a statement saying it "would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue" to operate.
 
In his letter, Mnuchin also asked the Fed for a 90-day extension of the Paycheck Protection Program Liquidity Facility and other facilities not funded by the CARES Act.

Also, the Treasury Department and IRS issued guidance providing that Paycheck Protection Program borrowers may not deduct expenses if they have a reasonable expectation that the covered loans will be forgiven.
 
Because the guidance applies even to PPP borrowers that have not submitted a forgiveness application by the end of the taxable year, the agencies encouraged borrowers to apply as soon as possible.
 
The agencies said that because businesses are not taxed on the proceeds of a forgiven PPP loan, the ruling results in neither a tax benefit nor tax harm because the taxpayer has not paid anything out of pocket.
Source: U.S. Treasury Department
Coalition Call For PPP Relief

A coalition of more than 110 business and financial organizations joined ICBA in calling for Congress to pass PPP streamlined forgiveness and hold-harmless protections before the end of the year.
 
The groups advocated immediate passage of S. 4117/H.R. 7777, introduced by Sen. Kevin Cramer (R-N.D.) and Rep. Chrissy Houlahan (D-Pa.), to simplify forgiveness for PPP loans under $150,000 to reduce compliance costs and support the success of the PPP.
 
ICBA's Be Heard grassroots action center allows community banks to send custom letters urging Congress to pass these and other urgent policies in the next pandemic relief bill.

Source: Independent Community Bankers of America
Agencies Respond to Push on Asset Thresholds
 
Federal regulators announced relief from regulatory burdens caused by participating in federal coronavirus response programs.
 
Under the interim final rule, community banks that have crossed certain regulatory asset thresholds will be able to calculate their asset size during calendar years 2020 and 2021 based on the lower of either total assets as of Dec. 31, 2019, or total assets as of the normal measurement date.
 
The rule applies to the community bank leverage ratio, the Fed’s debit card interchange and routing rule, management interlocks, call reports, examination frequency rules, the Small Bank Holding Company Policy Statement, and other thresholds. It applies to institutions with less than $10 billion in total assets as of Dec. 31, 2019.
Source: FDIC
State Regulators Issue Ransomware Assessment Tool
 
State financial regulators recently issued a self-assessment tool to banks they supervise to help mitigate ransomware attacks. The tools allow banks to assess their efforts to mitigate ransomware risks and identify gaps that require increased security.
 
The nonprofit Center for Internet Security also offers a CIS Controls set of actions to protect organizations and data from known cyberattack vectors.
Source: Conference of State Bank Supervisors
Key Thresholds Unchanged in 2021

Federal regulators said they will leave a couple of regulatory thresholds based on the Consumer Price Index unchanged in 2021.
 
The agencies announced the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will stay at $27,200.
 
They also said Truth in Lending Act and the Consumer Leasing Act protections generally will apply to consumer credit transactions and consumer leases of $58,300 or less in 2021, the same as this year.
 
The thresholds are based on the annual percentage increase in the CPI as of June 1.
 Source: Federal Reserve Board
PPP Loan Forgiveness Tops $38B

The Small Business Administration said it has forgiven 367,321 Paycheck Protection Program loans worth $38.4 billion as of noon Sunday. In a new section of its PPP webpage, the agency also said it has received 595,144 loan submissions worth $83.2 billion.
 
Community bankers are urged to continue pressuring Congress to include PPP reforms in the next economic stimulus package, such as simplifying forgiveness, addressing the conflict with EIDL advances, and excluding PPP loans from regulatory asset thresholds.

 Source: Small Business Administration