April 2020Presenter:

Elizabeth K. Madlem, Associate General Counsel

Guest Speakers:

Darlia Fogarty, President

Victoria Stephen, Deputy General Counsel

H U D D L E

Huddle Agenda

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• Introductions• ABA Releases New SBA FAQ here.• C/A’s Top PPP FAQs• Open PPP Forum• Miscellaneous Questions and Open

Forum

ABA Releases New SBA FAQ (1)

Takeaways:

• Lenders can rely on borrower certifications as to applicability of

affiliation rules.

• Lenders do not need to re-verify beneficial ownership information for

existing customers.

• How payroll is defined under CARES Act, including calculation of non-

cash benefits and coverage of paid leave

• Methods for determining payroll to calculate the maximum loan

amounts

3This Photo by Unknown Author is licensed under CC BY-NC-ND

ABA Releases New SBA FAQ (2)

Takeaways:

• That lenders who processed applications based on April 2 Interim Final

Rule may rely on the laws, rules and practices available at that time

• Amount of forgiveness 8-week period begins on date of first

disbursement (Lender must disburse within 10 days of loan “approval”)

• Release of an SBA Promissory Note Form (Not Required)

4This Photo by Unknown Author is licensed under CC BY-NC-ND

C/A’s Top PPP FAQs (1)

Q1: Does Regulation O apply to PPP and bank insiders?

Q2: Can employers include wages paid to H1-B Visa workers or legal, seasonal immigrant workers in their payroll calculations?

Q3: How do you qualify a self-employed person based on net earnings?

Q4: Are small business customer's that have 1099 employees eligible? The Final Rule seems to contradict itself.

5This Photo by Unknown Author is licensed under CC BY-SA

C/A’s Top PPP FAQs (2)

Q5: Is beneficial ownership required for PPP Loans?

Q6: Is it a hardline rule or a best practice to not require a deposit account or control account?

Q7: Do the loan documents have to be dated the same date as the SBA approval for SBA in order to

fund? What if the loan documents are dated April 3, but SBA approval isn't dated until April 4: will

there be a chance that SBA wouldn't fund the loans?

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C/A’s Top PPP FAQs (3)

Q8: Are banks free to rely on borrower attestations on eligibility of business, like with

affiliation?

Q9: How do lenders get paid their processing fee from the SBA?

Q10: How are PPP loans to be treated on the Call Report? Do PPP loans count towards

CRA?

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Open PPP Forum8

Two ways to ask a question:

1. Use the Chat Box feature to send in a message.

2. Raise your hand to request to be unmuted.

Please remember to always lower your hand with you are done speaking so we can mute you again.

Background noise will delay getting to as many questions as possible.

This Photo by Unknown Author is licensed under CC BY

Miscellaneous Questions and Open Forum

Will the policies that are offered the 120 days to pay be in effect until the end of

that 120 period? In other words, will they pay in the event of a loss that occurs

within that 120 days?

If YES:

• The Dec page we have on file will have the original expiration date. Would the

bank be responsible for documenting that this was a COVID-19 extension?

• We would not have to start force-place process until the 121 day? We would

mail the 45 day letter on the 121 day to start the clock ticking?

If NO:

• How would we ensure coverage during that 120 day period?

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Miscellaneous Questions and Open Forum (2)

• Are banks waiving the 6-withdrawal limit on their non-

transaction accounts for their customers?

• Are examiners postponing the exams or just handling

via electronic documents only?

• Are there any large servicers (or soon to be) who used

a vendor to develop various periodic statement

scenarios (temporary loss mitigation, bankruptcy,

etc.?)

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Miscellaneous Questions and Open Forum (3)

• Capitalization of interest to assist borrowers during

COVID-19

• CARES Act FDIC Debt Guarantee

• Pandemic modifications to LMI for CRA considerations

• Any third party sites to perform geocoding of

marketing campaigns?

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Questions?

Thank you for your participation and input into the conversation!

If you have any additional questions to submit towards next week’s FAQ, contact Compliance Alliance at:

admin@bankersalliance.org

Members are free to use the hotline for follow-up questions.

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