There will be no love lost when we send 2020 packing. But before the door slams, this cruelest of years has one last insult to flip us off. And it has to do with that most valuable of currencies: time.
Pub 2 2020 Issue 7
The Pennsylvania Association of Community Bankers joined with the Independent Community Bankers of America and state banking associations, representing over 50,000 community bank locations across the nation, to urge Congress to include a series of recommendations in the next legislative package to create relief for American small businesses impacted by COVID-19 and the millions of people they employ.
The CARES Act was signed into law on March 27, 2020, in response to the impact of the COVID-19 pandemic. The law established the Paycheck Protection Program (“PPP”). Section 1106 of the CARES Act sets forth the statutory rules relating to the PPP loan forgiveness. After much Guidance and FAQS were released by the Small Business Association (“SBA”) and the Department of Treasury, on June 5, 2020, the Paycheck Protection Program Flexibility Act was signed and offered additional changes to section 1106 of the CARES Act. On June 11, 2020, the SBA posted an interim final rule revising the first PPP interim final rule to incorporate the Flexibility Act amendments, including those relating to loan forgiveness. On June 17, 2020, SBA posted another interim final rule revising the interim final rule again, to incorporate Flexibility Act amendments, including those relating to loan forgiveness. Most notably, forgiveness for PPP loans was amended to reduce, from 75% to 60%, the portion of PPP loan proceeds that must be used for payroll costs for the full amount of the PPP loan to be eligible for forgiveness. Guidance on all the Covid-19 legislation continues to be released almost weekly, and the information recommended in this article is subject to change.
Many of us are feeling a little uncertain as our personal lives, daily routines and defined professional roles are in a constant state of flux. It can be unnerving, overwhelming and often isolating. PACB is here to bring some stability, ease and connection for community bankers across the Commonwealth.
Brent Smith, president of LINKBANK in Camp Hill, PA, recently was recognized nationally as a “40 Under 40: Emerging Community Bank Leaders” by Independent Banker magazine. “Brent Smith lives the community bank philosophy every day and Pennsylvania community bankers are proud that Brent was recognized for his contributions to the community,” said Kevin L. Shivers, PACB president and CEO. “Brent has worked hard not only to learn his profession but also to make a positive impact on the lives of those who live in the community. Brent’s meaningful involvement with so many local charities personifies a true community banker.” Brent Smith’s vision for community banking began with his instrumental role in founding LINKBANK, a new community-driven, locally focused community bank in South Central PA, with a vision to foster personal relationships, inspire trust, and empower digital innovation. In addition to starting the bank, Smith established the LINK Foundation, which proudly allocates LINKBANK’s resources back into the communities they serve. He also serves on the board for Rider Musser Corp., Brethren Housing Assoc. and The Meeting House Church.
As challenging as the Covid-19 pandemic is for community bank customers, it has been especially difficult for the banks themselves. Moreover, while experts may disagree on the timing and parameters of COVID-19 for the rest of this year and beyond, economic and political turmoil will almost certainly continue. The key for community banks is to develop “readiness” strategies to address these concerns and best serve their customers in a post-pandemic world.
We’ve all recently experienced what it’s like to have a sudden shift in focus to more immediate challenges, such as working with limited staff or working remotely. As these recent times have demonstrated, the way we do business can change abruptly at any time and cause a variety of challenges and distractions.
Insured Cash Sweep® and CDARS®: A Game Changer for Banks and Local Communities
In the past, many large-dollar depositors, such as public entities, institutional investors and nonprofits, were reluctant to deposit their cash at small banks because their deposits could only be insured up to $250,000. They feared losing money if their bank failed. In effect, small banks were penalized for their size on the mistaken belief that small automatically equaled risky. This changed in 2002 when Promontory Interfinancial Network began offering the first “reciprocal deposit” placement service — CDARS® and, later, another called Insured Cash Sweep, or ICS®.
Communities across Pennsylvania are growing and thriving because their community banks care. The service and commitment demonstrated by community bank employees keeps customers faithful, and their sincerity keeps others hopeful. It is because of these employees that communities across the Commonwealth are thriving and becoming better places to live and work.