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Dear OBA Members,

In lieu of Friday Five this week, I want to share a special message dedicated to coronavirus pandemic developments in the banking industry. I’ve focused on recent activity only. Note that there are many developments daily, so this won’t be a comprehensive list.

If you have questions about anything on this list, please don’t hesitate to contact any member of the OBA team. We are standing ready to serve you. You can reach me at (503) 576-4124 or lnavarro@oregonbankers.com.

Wishing you and your families well now and always,



Federal Regulatory and Administrative Actions
  • Each regulatory agency has pages devoted to the coronavirus pandemic, which include the many regulatory pronouncements coming out daily. We’ve already seen at least a dozen this week ranging from public assurance that deposits are safe to information about how banks can help customers. Check the following coronavirus pages for details:
  • Among the regulatory actions was FDIC’s release of two sets of frequently asked questions addressing banker and consumer concerns related to the pandemic. The FAQs for banks address payment accommodations and operational challenges, while the consumer FAQs assure consumers that the bank is the safest place for their money. The FDIC—along with the other federal banking agencies—also released a Q&A addressing questions they have fielded about an interim final rule urging banks to use their capital and liquidity buffers to meet the needs of customers during the pandemic.
     
  • I also want to call out FDIC Chair Jelena McWilliams’ letter sent this week to the Financial Accounting Standards Board (FASB) urging exclusion of COVID-19-related modifications from being considered a concession when determining a troubled debt restructuring (TDR) classification; permitting financial institutions currently subject to the current expected credit losses (CECL) methodology an option to postpone implementation of CECL given the current economic environment; and imposing a moratorium on the effective date for those institutions that are not currently required to implement CECL to allow these financial institutions to focus on immediate business challenges relating to the impacts of the current pandemic and its effect on the financial system. Click here to read the letter. We are still awaiting FASB’s response.
     
  • Regulators – including Oregon’s Division of Financial Regulation – are emphasizing that the Fed discount window is open for business. Don’t be hesitant to test it and use it. Regulators want to dispel any stigma related to using it. Plus, among other actions by the Fed this week, they cut the primary credit rate for the discount window.
     
  • The Small Business Administration’s Disaster Assistance Program related to the coronavirus is up and running. Oregon should be added for statewide eligibility any day. The application has been submitted. In the meantime, the following counties are already eligible:  Curry, Gilliam, Harney, Hood River, Jackson, Josephine, Klamath, Lake, Morrow, Sherman, Umatilla, and Wasco. A reminder that nonprofits are eligible to apply too.
     
  • As has been widely publicized, the Federal Housing Finance Agency announced this week that it has directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days for enterprise-backed single-family mortgages. The Department of Housing and Urban Development also announced that it would suspend foreclosures and evictions for all Federal Housing Administration-guaranteed loans until the end of April.
Federal Legislative Actions
  • Two of three tranches of the federal coronavirus legislative package have been enacted. The third, which is the stimulus package, is now under consideration. It looks like what we will get in this bill focuses on SBA program flexibility and enhancements and potentially a Treasury lending program. More to come as it unfolds. In the meantime, we are pushing hard for Congress to create more flexibility and higher guarantees in the SBA 7(a) loan program; provide for a temporary increase in FDIC deposit insurance coverage; increase options for troubled debt restructuring; press FASB to delay CECL implementation; and more. It is also important that any legislative package isn’t laden with onerous provisions that could harm our ability to serve our customers and communities now and in the future. More analysis will be forthcoming, and the bill could pass early next week.
     
  • Here is a link to the official summary of what was included in the recently enacted second tranche – HR 6201 – dealing with issues related to employment and family stabilization.
State and Local Level Actions
  • The Governor continues to update executive orders regarding COVID-19.
     
  • I’ve heard that a statewide ban on evictions may be forthcoming, similar to what was enacted by the City of Portland and Multnomah County. Click here for the FAQ on the Portland/Multnomah County temporary moratorium on evictions. We will keep you posted.
     
  • Word on whether or not Oregon will institute a shelter-in-place requirement like California seems to change by the day/hour. To prepare, OBA is working with the Oregon business community to encourage the Governor to establish a definition of essential operations/services that can be used if such a requirement is issued. We have made it clear that the definition should include financial institutions and other financial services, and I am confident that it will.
     
  • The Oregon Legislature has a special committee on the coronavirus. The committee released yesterday a list of 25 items they want to act on ASAP. The ideas pertaining to banking are of serious concern. They would apply only to state-chartered banks and they prescribe mandates on accepting interest-only payments, prohibiting defaults (including commercial), and providing loans at zero interest. We have mobilized a group of contact bankers to reach out to committee members. We will continue to work to educate legislators and stop these efforts that would hinder rather than help us assist our customers and communities. We will keep you apprised. Questions about state legislative activity can be directed to me or to OBA Government Affairs Director Kevin Christiansen at kchristiansen@oregonbankers.com and (503) 576-4123.
     
  • OBA is also participating – along with several of our members – in discussions with various groups ranging from Oregon Housing and Community Services to the Mayor of Portland/Prosper Portland on initiatives and impact mitigation efforts.
     
  • On Thursday’s semi-weekly call OBA and our member bank leaders are having along with Washington Bankers Association, Jacob Mundaden of the Oregon Division of Financial Regulation stressed that the state will be “flexible” in future exams with regard to the impact of the coronavirus pandemic. When modifying loans, be sure you are documenting that the actions taken are related to COVID-19. While Jacob’s comments are not formal, it is important that our regulators are all acknowledging these unprecedented times and how they will impact banks well into the future.
     
  • Jacob also noted that state-chartered banks are not required to notify the Division of Financial Regulation when modifying branch hours or closing to foot traffic, but banks are required to notify the Division of full branch closures. You are welcome to send them courtesy notices of modifications.
Other Advocacy Issues
  • Many other issues are arising, ranging from challenges obtaining complete appraisals to growing risk of elder abuse resulting from large cash withdrawals. Please keep us informed of what you are seeing and experiencing so we can advocate for solutions and raise awareness.
National Association Resources
  • The Independent Community Bankers of America has developed a new page focused on COVID-19. It includes many useful links and recommendations, including a “playbook” for Congress, sample press releases, and tips for community banks in working with customers. Click here.
     
  • The American Bankers Association continues to update its resources and information found at www.aba.com/coronavirus. It includes relevant links and information about joining their webinars on coronavirus response (for both ABA members and non-members). I find their FAQ for bankers – click here – to be very helpful.
OBA Resources
  • OBA staff is standing ready to serve you however we can.
     
  • We have canceled in-person meetings through April and expect to extend that timeline. We will keep you posted.
     
  • In the meantime, we are still holding virtual peer group meetings. One coming up is a discussion of our Community Engagement Roundtable members about how to continue to support and assist nonprofits and other stakeholders during this incredibly difficult time. On a related note, the federal banking agencies announced this week that they will give favorable Community Reinvestment Act consideration to banks for retail banking, retail lending and community development activities related to the coronavirus pandemic. This favorable consideration will be available for at least six months after the national emergency declaration is lifted. To join the Roundtable if you aren’t already participating, contact OBA’s Jennifer Schubert at jschubert@oreognbankers.com.
     
  • One of OBA’s solutions for members is Compliance Alliance. Many banks already subscribe to the service, but those that don’t can access Compliance Alliance’s updated Pandemic Toolkit for free. Click here.
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