The Paycheck Protection Program (PPP) was the focus of several papers at this year’s Community Banking in the 21st Century Research and Policy Conference, and their findings were very much in line with the conference’s overall theme of industry resilience and innovation.
The nation’s community bankers are emerging from the COVID-19 pandemic a little battered but somewhat buoyed by operational changes that have turned into newfound efficiencies.
Two years ago, community banks cited the availability and cost of funding as their greatest challenges, according to the Conference of State Bank Supervisors’ 2019 National Survey of Community Banks. Interest rates had recently risen, increasing the cost of deposits and prompting more reliance on wholesale funding.
Read More about Banks Navigate Surging Deposits, Tepid Loan Activity since COVID-19 Onset
The Federal Reserve recently unveiled a tool to help small community banks—those with less than $1 billion in assets—comply with a new accounting standard they are required to implement by 2023. The standard is the current expected credit loss (CECL) methodology for setting banks’ loan loss allowances, and the tool is called SCALE—the Scaled CECL Allowance for Losses Estimator.
The Paycheck Protection Program (PPP)—which involved thousands of participating lenders, millions of borrowers and hundreds of billions of dollars in loans—ended on May 31, 2021.