Pub. 17 2020 Issue 2

2 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S My biggest fear is that once these businesses exhaust the funds they have received from the PPP loans, we will begin to see massive layoffs and business closures that we were trying to avoid. PRESIDENT’S MESSAGE JASON WYATT NMBA PRESIDENT A s the first “Quarter of Corona” has come to an end, a significant amount of uncertainty remains. Many states have gradually begun to open their economies, which should help some businesses; however, many more businesses are still struggling to stay afloat. Although PPP loan applications have slowed substantially, banks must now undertake the process of forgiveness, which by all accounts appears to be significantly more complicated and time-consuming than the origination process. Although many of us feared this would be the case, we still chose to originate these loans with the intent of helping our customers and our communities when they needed it the most. I have been told by many bankers that if they had known what forgive- ness would entail, they may have declined to participate in the program. Likewise, many customers have told me that if they would have known how complicated forgiveness would be, in addition to the enormous legal liability they would have to shoulder, they would not have participated. This might be the reason there is over $130 billion in the program that has yet to be allocated and only 40% of lenders are still taking applications. On the positive side, these loans enabled thousands of businesses to remain open and continue to make payroll. Without this program, many businesses would have laid off most, if not all, of their staff. There is little doubt that unemployment and business closures would have been exponentially higher across the nation. My biggest fear is that once these businesses exhaust the funds they have received from the PPP loans, we will begin to see massive layoffs and business closures that we were trying to avoid. If we cannot fully open our economies very soon, we could easily dip back into recession. Although there are dis- cussions regarding another round of stimulus and simplification of the forgiveness process, Congress is in recess until sometime around mid to late July. This means a new stimulus package may not be passed until August at the earliest. If Congress doesn’t take action sooner, another stimulus might be too little, too late for many small businesses around the country. Now is not the time for Congress to drag their feet and play politics. Remember this next time you vote. In reviewing the national statistics of the PPP program, many of you might have noticed that New Mexico had the lowest utilization of PPP loans than any other state. I believe several factors most likely contributed to this. First, New Mexico is a small state in terms of popula- tion; however, other states with less population still had higher utilization rates in terms of the number of PPP loans originated and total dollar amount. Second, New Mexico ranks 47th in both labor force participation and FIRST QUARTER REPORT