Jane Gladstone, new president of Promontory Interfinancial Network, says the recession will accelerate the shakeout among the nonbank disruptors and that small banks have an opportunity to forge new bonds with the survivors.

The class A notes, secured by legacy trust-preferreds and subordinated debt of institutions, carry an investment-grade A1 rating from Moody's. That rating is slightly lower than a prior Hildene CDO, due to elevated pandemic risk to bank profitability.

The company said it had cut 20 positions and found a way to shed 35,000 square feet of office space by the end of 2020.

Banks could end up holding many low-rate Paycheck Protection Program loans on their books for two years, and dealing with irate borrowers who failed to meet federal requirements for forgiveness.

Up to 12% of loans under the $660 billion small-business rescue program could be tied to misleading or completely phony applications, fueling concerns about lenders' potential liability.

The program, created in response to the 2008 financial crisis, generated $19 billion in small-business loans. It could be used as a viable path out of the coronavirus pandemic.

The move is part of an effort by CFPB Director Kathy Kraninger to help smaller lenders by significantly raising loan thresholds for collecting and reporting mortgage data.

The Small Business Administration stopped approving loans when the Paycheck Protection Program hit its cap.

By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.

Measures that delay the Current Expected Credit Losses standard and reduce a community bank capital ratio are temporary, but the industry now sees an opening to argue that they should be permanent.