Topic: Disaster Preparedness
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Will restrictions on collections be relaxed in phase three of the “Restore Illinois” plan?
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The five-phase “Restore Illinois” plan does not address restrictions on collections, which are imposed by a separate Executive Order 2020-25 (EO-25). Whether the restrictions on collection activities in EO-25 will continue depends on whether EO-25 is extended and additional Gubernatorial Disaster Proclamations are issued. EO-25 suspended the service of garnishment summons, wage deduction summons and…
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Do banks qualify for the CARES Act’s Employee Retention Credit if they are paying employees who are not working or working a reduced schedule during the COVID-19 pandemic?
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Yes, banks with one hundred or fewer full-time employees on average in 2019 may qualify for the Employee Retention Credit (subject to the factors discussed below) regardless of whether their employees worked during the COVID-19 pandemic. Banks with more than one hundred full-time employees on average in 2019 may qualify for the Employee Retention Credit…
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Under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020, if a customer has available funds in their account above what is being restricted due to a garnishment or citation, would they still be entitled to the $4K exemption for the funds being held? For example, what if a debtor had an account balance of $6K and a citation comes in for $1K. Would the customer still get to claim the personal property exemption in the $1K being held under the citation? Or what if the customer had an account balance of $8K and $4K was being held under a citation?
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No, we do not believe that the Illinois Supreme Court’s order would entitle a customer to claim a personal property exemption of more than $4,000 in account funds. As stated in the Illinois Supreme Court’s order, Illinois law provides consumer judgment debtors with a personal property exemption “not to exceed $4,000 in value,” and the…
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Are Paycheck Protection Program (PPP) loans of $1 million or less reportable as small business loans for Community Reinvestment Act (CRA) purposes? Can the same loans also be considered community development loans (CDLs) for CRA purposes?
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Generally, PPP loans of $1 million or less may be reported as small business loans for CRA purposes, but we do not believe the same loans also may be reported as CDLs, subject to the caveats below. However, PPP loans over $1 million may qualify as CDLs for CRA purposes if certain criteria are met.…
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Can banks earn Community Reinvestment Act (CRA) credit for making Paycheck Protection Program (PPP) loans?
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Yes, banks can earn CRA credit for making PPP loans. The FDIC has published guidance stating that “in most cases” PPP loans will receive CRA credit. The federal banking agencies also released a Joint Statement on CRA Consideration for Activities in Response to COVID-19 confirming that “the agencies will favorably consider . . . retail…
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In answer to a previous question on GoToIBA.com, you indicated that: “Notaries commissioned to perform notarial acts in Illinois must affix their seal to their signature, and this cannot be done electronically. Further, we believe that when your customer’s signature is being notarized, both your customer and the notary must sign on paper using ink.” Given the COVID-19 pandemic, is any change to this rule anticipated?
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The Illinois Governor authorized the use of remote online notarizations in Executive Order 2020-14 (EO-14), issued during a Gubernatorial Disaster Proclamation related to COVID-19. EO-14 provides that Section 6-102 of the Illinois Notary Act (requiring signatories to appear before a notary) may be satisfied with two-way audio video communication technology — provided the notary and…
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Are you aware of specific COVID-19 signage requirements for branches reopening in Illinois?
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Yes, for all branches in which employees will physically be present, you must post the Illinois Department of Public Health’s Workplace Health and Safety Guidance for Employees and Staff of Businesses. We also recommend posting the U.S. Department of Labor’s Families First Coronavirus Response Act (FFCRA) model notice in your branches. The Illinois Governor’s modified…
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During the process of receiving Paycheck Protection Program (PPP) applications, none of the applicants indicated that they were using an agent. Now we have a borrower who is stating that their accountant helped them and asking us to pay the accountant an agent fee of 1%. Are we on the hook for this fee?
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No, our understanding of the PPP and existing SBA 7(a) loan requirements is that your bank would not be required to pay the agent because the borrower failed to disclose the agent and the agent’s fees on SBA Form 159 as part of the loan application. The Small Business Act requires business owners to “certify…
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If we receive a citation or garnishment directed to two judgment debtors holding a joint account, is each debtor entitled to the $4K exemption under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020? For example, let’s say there is a citation against a husband and wife who have a joint account with a balance of $10K. Are we required to release $8K of that balance (providing a $4K exemption for each debtor)? Similarly, let’s say there is a citation against a husband and wife who have a joint account with a balance of $6K. Are we required to release the $6K ($3K exemption for each debtor)? And would the same principles apply to an account held by unmarried joint owners?
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We believe the Illinois Supreme Court’s order requires garnishees and citation respondents to release $4,000 of property back to each judgment debtor, up to a total of $8,000. In your first hypothetical, the order would require the financial institution to release $8,000 back to the debtors, and in your second hypothetical, the order would require…
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Under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020, if a financial institution releases a debtor’s funds totaling less than $4,000, is the financial institution expected to continue freezing funds that come in after the release? For example, say we receive a citation to discover assets for a judgment of $10,000 on a consumer account containing $3,000. If we release the $3,000, are we expected to place a hold back on the account for purposes of subsequent deposits? If so, would the debtor be entitled to claim an exemption for subsequent deposits up to the remaining $1,000 of the Supreme Court order’s $4,000 threshold?
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Yes, under the Illinois Supreme Court’s order, we believe depository institutions should release from a hold up to a total of $4,000 in funds deposited into a consumer account. In your hypothetical, an additional $1,000 (the remainder of the order’s $4,000 exemption amount) should be released back to the debtor. Once a total of $4,000…