Week of June 8

In This Issue…

• President Trump signs Paycheck Protection Program Flexibility Act
• OBA, State Election Board hosts press conference announcing plan to aid absentee voters
• OBA education corner …
  

President Trump signs Paycheck Protection Program Flexibility Act

On Friday, President Trump signed into law H.R. 7010 (Public Law 116-1420), the Paycheck Protection Program Flexibility Act, which was passed by the Senate on a voice vote earlier in the week.

“The bill is generally a good thing for the (PPP) program, but at the same time it raises some questions,” OBA Executive Vice President/Government Relations Adrian Beverage said.

Here are the highlights:

• Extends the covered period for loan forgiveness from eight to 24 weeks after the date of loan disbursement. Existing PPP borrowers retain the option to use an eight-week “covered period” by which to create more jobs.
• Changes the required of loan proceeds that must be used for payroll purposes from 75 to 60 percent. In addition, no less than 60 percent of the loan forgiveness amount must have been spent on payroll costs during the new “forgiveness period” of 24 months.
• Provides a “safe harbor” from “forgiveness reductions” that’s based on the number of FTEs that are unable to return to the same level of business activity before Feb. 15.
• There is also a new safe harbor from “forgiveness reductions” in the number of FTEs for small business borrowers that are unable to rehire individuals they had on Feb. 15 or not able to hire employees that are similarly qualified for unfilled positions by the end of December of this year.
• Increases PPP loan maturity (approved by SBA) on or after June 5, 2020.
• Extends payment deferral period for principle, interest and fees to 10 months or to the date the SBA remits the borrower’s loan forgiveness amount.

“Some questions linger about what these changes may mean,” Beverage said. “Originally, the 5-year extension was going to be applied to all PPP loans, although it’s difficult to understand how that was supposed to work. It’s the reason there were two ‘holds’ on the bill before the Senate could take up the measure. As it was changed, it does not now apply to existing PPP loans unless the lender agrees to such an extension, and it will apply to new PPP loans.

“Another question is what changes on which existing forms will be necessary because of the bill’s language? We’re still looking for answers in conjunction with the Alliance of state bankers associations.”

Beverage also pointed out any new PPP loans made after June 5 must automatically be extended to a minimum of five years, and a maximum of 10 years.

“We tried to tell folks on the Hill that this requirement may force a lot of lenders out of the PPP lending business,” Beverage said. “One of the questions we’re also facing is why (a lender) would choose to stay with the program if the interest rate remains at 1 percent? I’ve heard from a few (bankers) who say their bank is planning to ‘opt out’ of the program, while other banks are staying with it.

“Remember, there is more than $130 billion still available to lend. What happens if the Program ends on time (June 30) and part of the $130 billion is still available? We are still seeking answers to these and other questions.”

Back to top

OBA, State Election Board host press conference announcing plan to aid absentee voters

The Oklahoma Bankers Association and the Oklahoma State Election Board held a joint press conference on June 5 to announce a plan for banks across the state to offer free absentee voting services to all Oklahoma voters.

“Community banks across Oklahoma are excited for the opportunity to make absentee voting easier for all Oklahomans,” OBA Chief of Staff/EVP Adrian Beverage said.

Participating institutions will offer one or more of the following services to voters:
• Free ID copy (lobby and/or drive-thru).
• Free absentee ballot notarization (lobby and/or drive-thru).

In addition OBA member banks, other participating entities include members of the Community Bankers Association of Oklahoma and the Oklahoma Credit Union Association. Voters can find a list of participating banks and credit unions at elections.ok.gov. Services and hours may vary by location.

“Banks and credit unions are in almost every community in Oklahoma. They’re our neighbors and community partners and they realize the importance of democracy. That’s why we’re excited to work with these financial institutions to ensure that every voter—both customers and non-customers alike—have free and convenient absentee services available to them,” Secretary of the State Election Board Paul Ziriax said.

You can view the entire press conference via Periscope by clicking here.

If you have any questions about this program, you can contact Adrian Beverage at the OBA (405-424-5252), or Pam Slater, director of support services at the State Election Board (405-521-2391).

Back to top

OBA education corner …