Further COVID-19 relief:
Negotiations stalled, outlook on progress is murky
With negotiations on a new round of coronavirus relief currently at an impasse, some bank industry advocates do not anticipate significant progress on a bill until September at the earliest. With just 84 days remaining until Election Day, negotiations will not be easy.
Limited conversations continue to take place although the President’s signing of multiple Executive Orders on payroll tax, evictions and unemployment insurance effectively placed a halt on negotiations on many of the top-line issues that had stymied compromise. Whether the Executive Orders effectively meet their intended goals will be left to Congress and potentially the courts to decide.
As you know, CBA, ABA and others have been advocating for the inclusion of a number of items in the next broad package, including several issues associated with the Payroll Protection Program (PPP). Among them a streamlined, one-page PPP forgiveness process (contained in S. 4117), PPP hold harmless language (contained in S. 4321), and PPP 1099C Debt Forgiveness. We have also been supporting the inclusion of E-Sign legislation (S. 4159) and garnishment language (S. 3841).
It appears hold-ups include the amount of potential de minimis forgiveness amounts (ranging from $1 billion to $3 billion) and the issue of funding state governments. It is believed that the U.S. Small Business Administration and the U.S. Treasury already have the ability to set a de minimis amount administratively, though they have opted not to do so, leaving bank advocates and others to seek one via legislative action.
Additionally, 15-20 Republican senators have indicated they will not support any bill.
Although public negotiations have not taken place on a potential banking title, we have been actively working with members of the Senate Banking Committee and House Financial Services Committee on priority banking issues, including Current Expected Credit Loss (CECL), Troubled Debt Restructuring (TDRs), mortgage forbearance and brokered deposits. We will continue to work with committee members and Senate leadership on these and other important issues.
Meanwhile, PPP lending closed over the weekend and it is doubtful it will be extended, though anything is possible in the current environment. On a related note, class action lawsuits are cropping up across the country from agents seeking compensation from banks and other lenders that extended PPP funds to small businesses, claiming they assisted small businesses in obtaining the capital.
Although public negotiations have not taken place on a potential banking title, we have been actively working with members of the Senate Banking Committee and House Financial Services Committee on priority banking issues, including Current Expected Credit Loss (CECL), Troubled Debt Restructuring (TDRs), mortgage forbearance and brokered deposits. We will continue to work with committee members and Senate leadership on these and other important issues.
Outside of the coronavirus package, ABA is working on a handful of issues within the National Defense Authorization Act (NDAA). At the top of the list are reforms to the Anti-Money Laundering (AML) rules. We were pleased that the House recently approved language to incorporate their version of AML reforms in the NDAA bill. We will push conferees (yet to be named) to maintain this language. Unfortunately, the House also approved two amendments that will significantly change the private student loan market. ABA has reached out to Chairman Inhofe to express our opposition to these amendments.
With multiple provisions of interest remaining, we are laser focused on ensuring that provisions that help banks serve their customers and communities remain a priority and part of the discussions. We will use this lull in negotiations to emphasize this with members of the House and Senate. We will be sure to share relevant information with you as it becomes available.
