In November 2021, Gateway Bank President James Christensen traveled to Washington D.C. for the American Bankers Association Community Bankers Council meeting. In addition to talking shop with bank leaders from across the country, James enjoyed hearing about hot topics and trends in community banking and lending. Here are some of the key takeaways from the event, courtesy of Bryan Bruns, Chair of the Community Bankers Council.

Paycheck Protection Program

ABA’s Vice President of Congressional Relations, Dan Martini, advised bankers to encourage their customers to apply for forgiveness of loans up to $150,000 through the bank or the SBA PPP loan forgiveness portal within 10 months after the last day of the loan’s covered period (8-24 weeks).

To date, there are a few million PPP loans still outstanding, and there’s a potential ‘black hole’ scenario whereby many loans will be caught in the auditing process. Martini noted that the Department of Justice is actively pursuing PPP fraud cases, and so far there have been no actions against banks, as banks have been adhering to fraud mitigation efforts.

Martini also mentioned that the SBA is considering offering loans up to $150,000 directly to consumers, which is problematic as the SBA doesn’t have the infrastructure that banks do to service loans.

Diversity, equity, and inclusion

ABA Senior Vice President of DEI Naomi Mercer and Senior Vice President of ABA’s Office of Strategic Engagement Sabrina Bergen gave a presentation on ways to build diversity, equity, and inclusion (DEI) into an organization through employee recruitment, retention, and performance, as well as through office policies. Bergen stressed the importance of increasing voluntary measures to reduce the likelihood of public policy recommendations for measures such as board diversity or mandates for data reporting.

Section 1071: new data collecting and reporting legislation

Senior Vice President of Fair and Responsible Banking Kitty Ryan talked about the CFPB’s notice of proposed rulemaking (ANPR) to implement Section 1071 of the Dodd-Frank Act, which will require financial institutions to collect and report certain data in connection with credit applications made by small businesses including women- or minority-owned small businesses. The amount and types of data collection required would place undue burden on small community banks. While there is a 90-day comment period, ABA is seeking a 45-day extension.

ABA’s Chief Policy Officer Naomi Camper and Executive Vice President of Congressional Relations James Ballentine encouraged the industry to band together, especially on the IRS reporting proposal. While the proposal has been rescinded from the latest budget bill, it could still resurface in the final version before it’s signed. House Financial Services Committee Chair Maxine Waters and Senate Banking Committee Chair Sherrod Brown focused on financial inclusion and stressed the importance of the industry demonstrating voluntary DEI efforts (i.e., data reporting and Bank On) to avoid mandates with stricter measures.