The CARES Act—the new coronavirus relief law signed by President Trump last week—provides an unprecedented amount of relief to consumers and businesses hit by the economic repercussions of the coronavirus pandemic. The legislation anticipates that banks of all sizes will serve as the delivery mechanism for much of that relief. Key provisions affecting banks and their ability to work with customers include:

• A 100% guarantee of loans made for a new SBA 7(a) Payment Protection Program.
• Temporary relief from troubled debt restructuring categorizations and an option to delay the implementation of the current expected credit loss standard.
• A lower community bank leverage ratio of 8%.
• $500 billion for the U.S. Treasury’s Exchange Stabilization fund to provide sufficiently collateralized loans, loan guarantees and other investments to eligible entities.
• Authority for the FDIC to establish a temporary program to guarantee bank debt.
• Forbearance policies for loans backed by federal government agencies or GSEs.

The ABA will host a webinar today at 1 p.m. CDT with ABA President and CEO Rob Nichols and a panel of ABA experts who will offer an overview of these and other provision, followed by a moderated banker Q&A. Register for the webinar.