PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update -- Friday, July 17, 2020
July 17, 2020
FedACTion Task Force
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Congress
Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), Enacted March 27, 2020.
Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.
Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.
Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing, and Urban Affairs, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.
U.S. House of Representatives
Committee on Financial Services
Subcommittee Holds Hearing on Homeowner Protections during COVID-19
July 16, 2020
The House Committee on Financial Services’ Subcommittee on Oversight and Investigations held a virtual hearing entitled, “Protecting Homeowners during the Pandemic: Oversight of Mortgage Servicers’ Implementation of the CARES Act.” Witnesses at the hearing included Alys Cohen, Staff Attorney at the National Consumer Law Center; Marcia Griffin, Founder and President of HomeFree-USA; Donnell Williams, President of the National Association of Real Estate Brokers; and Ed DeMarco, Ph.D, President of the Housing Policy Council.
Federal Agencies
Federal Reserve Board
Federal Reserve Board Releases Paper on Uncertainty Measures
July 16, 2020
The Board of Governors of the Federal Reserve System released a paper (Paper) entitled, “What is Certain about Uncertainty?” The Paper provides a comprehensive survey of the many existing measures of risk, uncertainty, and volatility and summarizes what these measures capture, how they are constructed, and their effects, paying particular attention to large uncertainty spikes, such as those appearing concurrently with the outbreak of COVID-19. According to the Paper, although uncertainty has significant real and financial effects and spills over across countries, the size and persistence of these effects depend crucially on the source of uncertainty.
Federal Reserve Bank of New York
FRBNY Releases Supplemental Survey Report
July 16, 2020
The Federal Reserve Bank of New York released a Supplemental Survey Report (Report), reflecting responses to supplemental questions in the July 2020 Empire State Manufacturing Survey and Business Leaders Survey. According to the Report, although more than half of all businesses in the region experienced a decline in their workforce during the COVID-19 pandemic, as more parts of the regional economy have reopened, many businesses have recalled workers who were temporarily laid off or furloughed during the pandemic, despite the costs of adjusting to the economic environment during the pandemic.
FRBNY Releases July 2020 Business Leaders Survey
July 16, 2020
The Federal Reserve Bank of New York released its Business Leaders Survey (Survey) for the month of July 2020. According to the Survey, activity in the region’s service sector held fairly steady. The Survey’s headline business activity index climbed 38 points to -1.8. The Survey’s business climate index rose seven points, but at -75.4, indicated that the vast majority of firms still viewed the business climate as worse than normal. Further, according to the Survey, employment levels continued to decline, though at a significantly slower pace than in the previous month; wages held steady; input prices increased at the same pace as in June, while selling prices continued to fall; and, capital spending declined. The Survey showed that firms were less optimistic about the six-month outlook than in June, and the business climate is expected to be worse than normal in the months ahead.
FRBNY Releases Monthly U.S. Economy Snapshot
July 16, 2020
The Federal Reserve Bank of New York released its U.S. Economy in a Snapshot presentation (Snapshot) for July 2020. The findings of the latest Snapshot include that consumer spending rebounded in May; real business equipment spending declined sharply in the first quarter of 2020; housing activity rebounded only moderately in May; payroll employment rebounded further in June; and U.S. equity indices declined slightly over the last month.
FRBNY President Delivers Remarks on Central Banking, Financial Markets and the Pandemic
July 16, 2020
John C. Williams, President and CEO of the Federal Reserve Bank of New York, delivered remarks at the 16th Meeting of the Financial Research Advisory Committee for the U.S. Department of the Treasury’s Office of Financial Research. Mr. Williams’ remarks were entitled, “Rising to the Challenge: Central Banking, Financial Markets, and the Pandemic.”
FRBNY Publishes Blog Post on Federal Reserve Agency CMBS Purchases during Pandemic
July 16, 2020
The Federal Reserve Bank of New York (FRBNY) published a Liberty Street Economics blog post (Blog Post) entitled “Federal Reserve Agency CMBS Purchases”, which describes the deterioration in market conditions that led to agency commercial mortgage-backed securities purchases, how the FRBNY’s Open Market Trading Desk conducts these operations, and how market functioning has improved since the start of the purchase operations.
Commodity Futures Trading Commission
CFTC Commissioner Quintenz Delivers Opening Statement before TAC Meeting
July 16, 2020
Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz delivered the opening statement before the sixth meeting of the CFTC’s Technology Advisory Committee (TAC). Topics addressed at the TAC meeting included cybersecurity lessons learned from the COVID-19 pandemic and remote work environment; the CFTC’s proposed rule on electronic trading risk principles; the resiliency and scalability of distributed ledger technology (DLT) systems and potential use-cases; an overview of central bank digital currencies and their place in the derivatives regulatory landscape; and, an analysis of the volatility of Bitcoin compared to other assets.
Department of Labor
Labor Department Issues News Release on Unemployment Insurance Weekly Claims
July 16, 2020
The U.S. Department of Labor issued a News Release regarding weekly unemployment insurance claims. The News Release states that, for the week ending July 11, 2020, the advance figure for seasonally adjusted initial claims was 1,300,000, a decrease of 10,000 from the previous week’s revised level; the previous week’s level was revised down by 4,000 from 1,314,000 to 1,310,000; the four-week moving average was 1,375,000, a decrease of 60,000 from the previous week’s revised average; and, the previous week’s average was revised down by 2,250, from 1,437,250 to 1,435,000.
International
Bank of England
Bank Releases Quarterly Bank Liabilities Survey
July 16, 2020
The Bank of England (Bank) released its Bank Liabilities Survey for the second quarter of 2020. The Bank utilizes the quarterly survey of banks and building societies to improve its understanding of the role lenders’ liabilities and capital play in driving credit and monetary conditions.
Bank Releases Quarterly Credit Conditions Survey
July 16, 2020
The Bank of England (Bank) released its Credit Conditions Survey (Survey) for the second quarter of 2020. The Bank utilizes the quarterly survey of bank and building society lenders as a means of understanding trends and developments in credit conditions, as part of its mission to maintain monetary stability and financial stability. The Survey covers secured and unsecured lending to households, and lending to non-financial corporations, small businesses, and non-bank financial firms.
UK Financial Conduct Authority
FCA and City Corporation to Collaborate on “Digital Sandbox”
July 16, 2020
The Financial Conduct Authority (FCA) announced it will collaborate with the City of London Corporation on the pilot of a “digital sandbox,” designed to support firms confronting COVID-19-related challenges. According to the FCA’s announcement, in its pilot stage, the digital sandbox will supply relevant data sets and expertise in the areas of detecting and preventing fraud and scams, supporting vulnerable customers, and improving access to finance for small and medium-sized enterprises financially affected by COVID-19.