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Main Street Lending Program – Lessons Learned

As part of the CARES Act the Federal Reserve Bank of Boston has established a special purpose vehicle (SPV) that will purchase a 95% participation in certain qualifying term loans originated by financial institutions. The terms of the loans have been written about elsewhere so we won’t reiterate them here (but would be happy to discuss them with you if you have questions). We recently helped Starion Bank with loan documents for a Main Street Priority Loan that the SPV purchased. It was the SPV’s first purchase in the country. Here are some lessons for those considering making a loan under the Main Street Lending Program umbrella:

Updated Treasury Department FAQs

The Treasury Department has updated its FAQs on the SBA PPP loan program. The FAQs can be found here It answers some but not all of the lenders’ questions.

Q&A for Lenders: CARES Act Paycheck Protection Program

Following is a detailed Q&A about the Paycheck Protection Program (Program). The Program will provide up to $349 billion in funding to eligible “small” businesses to help deal with the financial impact of COVID-19. You will see that we are still waiting for guidance from SBA on many of the questions banks and businesses have about the program.

Borrowers Impacted by COVID-19: Banking Regulators Provide Some Relief for Banks

On March 22, the Federal Reserve, OCC, CFPB, NCUA and State Banking Regulators issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus.” The regulators recognize that the COVID-19 outbreak will adversely impact banks and their borrowers, and have taken steps designed to help relieve these impacts.

The CFPB Issued a Policy Statement on How It Will Interpret and Apply the Dodd-frank Act’s Abusiveness Standard, Providing Minimal Current Insight, but the Promise and Framework for Future Guidance

As of January 24, 2020, the CFPB issued a Policy Statement setting forth its intent regarding future supervisory and enforcement actions applying the Dodd-Frank Act’s prohibition on “abusive” conduct. This Policy Statement lays out a framework for the CFPB to provide clarity in the future as to what conduct is and is not “abusive”, and indicates that the CFPB wishes to ensure businesses, including banks, are not refraining from offering beneficial and innovative new products and services that would benefit consumers for fear of having the CFPB declare the product or service abusive.

So You’re Faced With a Troubled Borrower – What Should You Do?

We’ve been fortunate that for the past eight years or so interest rates have been low and the economy growing. But, history tells us that a slipping economy is inevitable and some borrowers won’t be able to survive. If you’re faced with a borrower that has issues, what should you do – or more importantly, don’t do?

Should I Bank Hemp and CBD Customers?

The most frequently asked question of Wisconsin bankers in 2019 thus far: should I bank customers engaged in hemp or CBD-related activities? Here’s the bottom line: whether or not you choose to bank these customers, and the extent to which you bank such customers, is a business decision.