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Dear Oregon Bankers,
 
This week was again focused entirely on issues related to the coronavirus response within our industry, and there is no way I can condense it into five items. Therefore, I will again substitute my usual Friday Five bulletin with an update on pandemic-related issues. For prior updates sent this past Friday and Monday, see the links below that are also on OBA’s pandemic resources page for banks. We also have a resource page for the public. The pages include lots of links and resources, along with this new video message.  Thank you to all of you for staying the course and serving Oregon communities during this challenging time. I am beyond proud of the Oregon banking community.
 
As always, please reach out to me or any member of the OBA team if we can be of assistance.
 
Wishing you well,
 

 

Oregon Bank Announcements
 
It is great to see so many public announcements and published articles from and about our member banks about how you are helping your customers and communities. Some of them pop up in my news feeds and others I have received directly from you. Thank you! While I won’t share a comprehensive list here, I thought I would pass along a couple of examples:
  • Ken Trautman, president and CEO of People’s Bank of Commerce in Medford, is circulating this guest article to local papers. What a thoughtful message.
     
  • Today’s Portland Business Journal included this piece about some of our larger Oregon banks, which are demonstrating impressive leadership and support.
Did you see the press release OBA issued this week jointly with the credit union association?
 
Last but not least, watch for more information soon on a collaborative effort with the City of Portland, Prosper Portland, Oregon Community Foundation and Oregon banks resulting in a small business grant and loan program to immediately help small businesses.
 
Federal Legislation
 
As I write this, the U.S. House is expected to pass today the Senate-passed CARES Act, which is a $2 trillion stimulus package to provide relief to American consumers and businesses struggling as a result of the coronavirus pandemic. I’m thrilled that many of the provisions we have pushed for made it in the final bill. It is great to see congressional action that supports the ability of banks to help their customers and communities rather than – dare I say – getting in the way. The best summary of the legislation I’ve seen thus far is this executive summary by ABA, although there is more analysis and information that will be forthcoming. As you will note, some of the key pieces of the bill are significant enhancements to the Small Business Administration’s lending programs, temporary accounting relief from troubled debt restructurings, an optional CECL delay, a reduction in the community bank leverage ratio from 9% to 8%, and authority for FDIC to increase deposit insurance on transaction accounts (a la TAG of 2008/2009).
 
Small Business Administration and USDA
 
While news is circulating about the major new funding for and enhancements to the SBA 7a programs, we still need clear, consistent information from SBA about the details of the new and enhanced offerings. There is no doubt that banks will be able to get these funds in the hands of small businesses (including nonprofits and independent contractors) much more quickly than SBA direct lending programs. I actually heard a story this morning of an Oregon business owner who was on hold for the SBA disaster assistance program and, after over an hour, she was still 617th in the queue… Let’s hope they act fast to get banks up and running on the new programs. On that note, every bank that is not currently certified as an SBA lender will have the option of quickly becoming one for purposes of the new pandemic program. I’ll send info out as soon as it is released.
 
Over at USDA, they released information this week about assistance efforts, including those related to their guaranteed loan program. Click here.
 
Bank Regulators
 
I won’t go through all of the announcements and actions out of the regulators this week, as your banks already receive those notices directly. You can also visit each regulator’s website. That said, I do want to note a few highlights.
  • The Federal Reserve this week unveiled several new facilities to support the flow of up to $300 billion in financing to households and businesses and committed to quantitative easing “in amounts needed” to support market functioning.
     
  • Speaking of the Fed, it announced this week that it will temporarily reduce its bank examination activities as it pivots to focus on responding to the immediate challenges posed by the coronavirus. All regular examination activity will be suspended until at least the last week in April at institutions with less than $100 billion in total consolidated assets, and the Fed will defer “a significant portion” of planned examination activity for larger institutions. Click here for more.
     
  • Along similar lines, the Federal Financial Institutions Examination Council announced a 30-day extension for Call Reports due on March 31. The Federal Reserve also said it would grant an additional 30 days for banks to file the March 31 FR Y-9C or FR Y-11, and the SEC will grant a 45-day grace period to file forms 10-K and 10-Q that were due on or before July 1, 2020. Over at the CFPB, they have announced delays in requirements or data to be submitted under the Home Mortgage Disclosure Act and Regulation C, the Truth in Lending Act, Regulation Z and Regulation E.
  • A helpful tool released this week by OCC is an FAQ for national banks and savings institutions. I find much of the information useful to all banks. Click here. By the way, speaking of OCC, you might be interested in Comptroller Joseph Otting’s comments about the stability of banking at today’s FSOC meeting. Click here. He explains well – and concisely – how well-positioned banks are today. This is a great statement: “Deposits in national banks and federal savings associations remain 100 percent safe and are insured through the Federal Deposit Insurance Corporation, just as they have been every day since 1933. The federal banking system is a source of strength for the national economy, both in the near and long term.”
State-Level Updates
 
The timing of a special session in Oregon, along with what a final legislative package will entail, remains in flux. We do expect the first of possibly multiple special sessions as soon as next week, but the debate over the top priorities continues. I am very pleased that the onerous proposals directed at state-chartered banks have been tabled at this time. This is due to the hard work of our lobby team and the many contact bankers we deployed to directly talk to key legislators. Great work. Unfortunately, commercial loans continue to be roped into the discussion of statewide eviction and foreclosure moratoriums, alongside residential properties. We understand and respect the need to keep people in their homes during this temporary “stay at home” period, which is the justification for temporary moratoriums on residential eviction and foreclosure, but we are working hard to differentiate between that goal and including ALL commercial loans in an order (not just properties that provide multi-family housing). As we speak, we have asked a new group of contact bankers to reach out to key leaders on this issue. If you would like to join the effort, we’d love to have you. Please contact Kevin Christiansen at kchristiansen@oregonbankers.com or (503) 576-4123. Stay tuned for more information.
 
In addition to the aforementioned state legislative issue, we are also working with our peer business associations across the state to advocate for Corporate Activity Tax relief. See this letter.
 
Also in play is legislation to implement remote notarization legislation which was originally slated to be considered in the 2021 session in Oregon.
 
For the Oregon state-chartered banks on the list, we continue to work with the Division of Financial Regulation on various issues. One worth mentioning is an “emergency” rule we expect to be issued soon that will permit state-chartered banks to hold virtual annual meetings.
 
Other agencies are also busy communicating issues related to the pandemic. We are sharing these with relevant OBA peer groups as we receive them, but following are a couple I’ll share again here:
  • The Oregon Department of Revenue is suspending the issuance of bank garnishments through April 30, 2020. There may be a few exceptions, but you will see a substantial reduction to the volume of garnishments you receive from the department. You may still receive garnishments that were issued prior to their decision, which should be handled through your normal process. If you have any questions about a specific garnishment, contact Steven Ito at steven.ito@oregon.gov or (971) 707-1521.
     
  • The Oregon Department of Human Services (DHS)/Aging and People with Disabilities has asked for our help requesting that banks accept and act on digitally transmitted limited judgment order, specifically to facilitate the work of newly appointed guardians and conservators. With court probate staff out of their offices indefinitely, there will likely be long delays in getting letters of guardianship/conservatorship issued and delivered to banks. OBA General Counsel Ken Sherman, Jr. and his colleague Lindsey Adegbite have reviewed this request and provided our member banks with his recommendations and a model statement. OBA’s Jennifer Schubert has distributed this information to a number of our peer groups; however, if you have not yet received it, please contact Jennifer and she’ll send the detailed information right away, including the new model language. Jennifer can be reached at jschubert@oregonbankers.com or (503) 576-4126.
Partner Announcements and Resources
 
OBA Associate Members and industry business partners are sharing many resources to assist banks during the coronavirus pandemic. Here are a couple of the latest:
  • Cook Security Group is hosting an online forum on Tuesday for their customers, which includes many of you. Their expert Steve Ryker, a longtime banker, will cover questions submitted in advance and other information focused to keep financial institutions safe and operational. Click here for more information.
     
  • IP Services has shared this tip-sheet related to cybersecurity while employees are working from home.
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