ICBA to Congress: PPP Forgiveness Should Be Straightforward

Community Banks Made 60 Percent of PPP Loans to Small Businesses

Washington, D.C. (Sept. 1, 2021) — The Independent Community Bankers of America (ICBA) today told Congress that the Small Business Administration’s Paycheck Protection Program needs a simple, easy-to-use forgiveness process to ensure the program works as intended for small-business borrowers.

Testifying before the House Small Business Committee, ICBA Chairman Robert Fisher said community banks have led PPP lending to small businesses and support a forgiveness process that is minimally burdensome for borrowers so they can focus on preserving their businesses.

“My bank’s PPP lending is typical of a community bank. We made a total of 929 loans for $64.8 million, saving roughly 10,000 jobs,” the president and CEO of Tioga State Bank in Spencer, N.Y., told lawmakers. “A straightforward, relatively simple loan-forgiveness process with minimal fraud is how the PPP’s success must be measured.”

Fisher said that while ICBA appreciates the SBA’s creation of its Direct Borrower Forgiveness Portal to streamline forgiveness for borrowers with smaller loans, the agency must respect lenders that choose not to use the portal. And while community banks have experienced little to no PPP fraud due to their robust underwriting, the SBA should proceed cautiously before changing its loan programs due to the higher incidence of fraud among nonbank lenders with little experience that crowded into the PPP.

According to SBA data, community banks:

• Were the predominant PPP lenders to local small businesses. Their 4.7 million PPP loans worth $429 billion served 55.8 percent of all PPP recipients and accounted for nearly 60 percent of the program’s total loan amount.
• Supported minority-owned small businesses. Community banks accounted for the following shares of the banking industry’s PPP lending: 86.9 percent to minority-owned businesses, 81.0 percent to women-owned businesses, and 68.9 percent to veteran-owned businesses.
• Served communities in rural, suburban, and urban America. Community banks made PPP loans in 98.5 percent of low-income or economically distressed counties, 97 percent of rural counties, and 93.8 percent of urban counties.
• Saved local jobs in food services, health care, and construction. Nearly one-third of the jobs they saved were in those critical sectors, and the nearly 49 million jobs they saved accounted for 58.3 percent of the program total.
• Had fast turnaround times, processing PPP loans five to 10 days faster than other PPP lenders.

For more information, visit www.icba.org.

About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.7 trillion in assets, over $4.7 trillion in deposits, and more than $3.6 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org

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