News

Bankers changing positions from one bank to another is nothing new in the industry. The volume of moves may ebb and flow over time, but we have witnessed this play out in the Arkansas market for years. While there is risk inherent in any move, bankers and their new employers are well advised to consider a few steps to mitigate legal risks accompanying the change. A recent Federal Reserve action imposing a lifetime ban on two Wyoming bankers is an alarming reminder of the severity of these risks.

Congress’s most recent COVID-19 relief bill was signed into law on Sunday, Dec. 27, 2020, as the Consolidated Appropriation Act of 2021 (CAA). Title X of the CAA provides additional bankruptcy relief for individual and corporate debtors, as well as creditors impacted by COVID-19. Most changes are temporary as noted below.

As a component of the Coronavirus Aid, Relief & Economic Security Act, the Federal Reserve established the Main Street Lending Program to provide up to $600 billion in financing to businesses and nonprofit organizations negatively impacted by the onset of the COVID-19 pandemic.

On October 30th, the Federal Reserve Board announced two adjustments to the terms of its Main Street Lending Program. These changes are designed to better provide support to smaller for-profit businesses and nonprofit organizations.

With interest rates remaining historically low, a number of Arkansas banks have taken steps to secure an additional capital cushion through a subordinated debt offering. As reported earlier this year by American Banker, the pandemic has incentivized institutions to shore up capital as a protection against credit losses, as well as preparing to take advantage of potential lending and M&A opportunities.

On August 24, the U.S. Small Business Administration (SBA) released a new interim final rule regarding the Paycheck Protection Program (PPP). This new interim final rule provides additional guidance on the applicability of owner compensation rules and the eligibility of certain nonpayroll costs for forgiveness.

On August 3, 2020, the Federal Financial Institutions Examination Council (FFIEC) issued a joint statement addressing additional loan accommodations related to Covid-19. As borrowers near the end of initial loan accommodation periods, the FFIEC encourages financial institutions to consider loan arrangements that might mitigate adverse effects on borrowers. Specifically, the FFIEC promoted the following practices: