Pub. 10 2021 Issue 3

8 By Rob Nichols, President and CEO, American Bankers Associat ion WASHINGTON UPDATE Perspective on the Paycheck Protection Program A t the end of May, the government’s Paycheck Protection Program came to a close. If Congress does not extend the program, we can expect the “Monday morning quarterbacking” about the program’s impact on the economy, its design and implementation, and its ultimate cost to begin. Those are appropriate questions to ask as we consider the lessons learned from the nation’s response to the coronavirus pandemic. Here’s what I know already: The biggest small business rescue program in U.S. history would have been an unmitigated failure without the extraordinary efforts of America’s banks and their dedicated employees. It would never have produced the positive results it did without the incredible collaboration between ABA and our state association alliance partners. It’s easy to forget what the world was like when PPP first launched in April 2020. The nation’s economy had largely shut down, many Americans were isolated in their homes, and businesses of all sizes were dealing with the stark new reality posed by COVID-19. Banks across the country were trying to figure out how to keep the banking system fully functioning in the middle of a global pandemic and how to help their customers survive the economic disruption while also trying to figure out how to protect the health and safety of their employees and customers from an invisible threat. It was against that backdrop that the federal government asked banks and other financial institutions to help the Small Business Administration launch the Paycheck Protection Program. On paper, the program dwarfed any previous SBA lending program in its history, and the agency was asked to launch it within days of lawmakers passing the CARES Act. That launch, to be generous, did not go perfectly. SBA’s technical systems, built for its more traditional 7(a) lending program, could not handle the incredible load demanded by a program of this scale. The agency staff was overwhelmed and was slow in issuing the guidance banks needed to begin processing loans, and the guidance they did release was sometimes contradictory. From the start, ABA and our state association alliance partners encouraged banks to step up and participate in PPP despite all the obstacles, and step up you have. As of April 11, banks were responsible for 80% of the nearly 9.6 million PPP loans so far and 93% of the $755 billion in PPP funding. I am particularly pleased to see how banks of all sizes supported the program. From our largest members to our smallest, the commitment to our small business customers has been truly remarkable. We have been united in this effort.