Changes, Complexity, Optimism

As I write this, it occurred to me that today is the first day of fall. Other than the leaves changing color, one might think it’s just another beautiful summer day as the temperature approaches 90 degrees in Bismarck. While 2020 has kind of been the year to forget, our summer weather was really quite delightful for the most part.

While our weather was pleasant, I can’t say it’s been a pleasant summer of clarity and direction for our bank members relative to the Paycheck Protection Program (PPP) forgiveness process. Community banks across the country including North Dakota stepped up to efficiently process PPP loans and distribute those much-needed funds to our business and ag customers. You accomplished what the federal government couldn’t. And now, in my opinion, you’ve sort of been left holding the bag. Even the General Accounting Office (GAO) recognized this in their report issued this week. As they reported, the complexity and lack of guidance surrounding PPP loan forgiveness could limit the effectiveness of future rounds of the program.

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I applaud Senator Cramer and others for introducing a bill early in the summer that would have substantially addressed the forgiveness mess by providing forgiveness for loans of $150,000 or less. This would have encompassed 85 percent of all PPP-approved loans, but only 26 percent of the PPP funds. This would have really helped your customers and your lenders to concentrate on serving customers during this tenuous time. There was broad bipartisan support for this concept. Unfortunately, politics got in the way and the two sides seem to be miles apart on what the dollar amount should be in the next stimulus bill, if there is one. What’s a couple trillion dollars amongst friends?

My optimism is waning for legislation or agency guidance that will clear some of the fog. We are now in election season and the Senate will be rightfully consumed with the Supreme Court vacancy due to the sad passing of Justice Ruth Bader Ginsburg.

Meanwhile, ICBND member banks are left with a bunch of 1 percent loans on your books and customers who are wondering what the heck is going on. I hope I’m pleasantly surprised by some near-term movement on the PPP forgiveness issue. Until then, hang in there!

Barry