The Independent Community Bankers of America (ICBA) said recently released data show that community banks are the unequivocal leaders of the U.S. economic recovery because of their outsized role as providers of Paycheck Protection Program (PPP) small-business loans.
The latest report from the Federal Deposit Insurance Corp. found that FDIC-insured banks made $480 billion in PPP loans in the second quarter, with ICBA stating more than half of those loans were made by community banks.
“The Paycheck Protection Program data clearly demonstrate community banking’s leading role in the nation's economic response to the COVID-19 pandemic,” ICBA President and CEO Rebeca Romero Rainey said in a release accompanying the data. “As American consumers and small businesses in urban, suburban, and rural communities grapple with historic challenges, they can rest assured that their local community bank is there for them every step of the way.”
ICBA said the data from the Small Business Administration data found that community banks served 57.5 percent of all PPP recipients, and 48.1 percent of all small businesses, making 2.8 million loans. In addition, they processed PPP loans five to 10 days faster than other PPP lenders – a trait which could bode well for community banks if and when another round of PPP loans is approved by Congress.
ICBA said the data found that community banks provided the most loans to minority-owned (72.6 percent), women-owned (71.5 percent), and veteran-owned small businesses (63.4 percent). They also made PPP loans in 98.2 percent of low-income or economically distressed counties, 96.6 percent of rural counties, and 92.4 percent of urban counties.