PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Friday, June 12, 2020
June 12, 2020
FedACTion Task Force
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Major Developments
SBA Issues a new Interim Final Rule Revising First Interim Final Rule for PPP
June 11, 2020
The U.S. Small Business Administration issued a new Interim Final Rule for the Paycheck Protection Program (PPP) revising key provisions of its April 2, 2020 Interim Final Rule to conform to the Paycheck Protection Program Flexibility Act of 2020. The new Interim Final Rule amends the covered period for PPP loans, revises the loan maturity date for new PPP loans, extends the deferral period for loan payments, extends the loan forgiveness time frame and reduces to 60% the amount of loan proceeds that must be used for payroll costs.
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 Small Business
Chairwoman Velázquez Probes Issues within EIDL Program
June 10, 2020
House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) gathered small business owners to examine issues within the U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. In response to COVID-19, Congress expanded the EIDL program to provide relief for small businesses, and appropriated billions of dollars for additional loans and grants within the program. The virtual hearing featured EIDL applicants, who testified on their experiences accessing the EIDL program and the issues they faced throughout the application process.
Federal Agencies
Conference of State Bank Supervisors
State Regulators to Address Post-Crisis Economic Recovery and Financial Infrastructure
June 11, 2020
State financial regulators created a COVID-19 Recovery Steering Group to guide multistate efforts to respond to the personal hardships and financial infrastructure risks caused by the global pandemic. The group, led by Texas Banking Commissioner Charles G. Cooper, will work through the Conference of State Bank Supervisors, and will consider changes to bank and nonbank financial services oversight, and share lessons learned and best practices with fellow regulators and the financial services industry.
Securities and Exchange Commission
SEC’s New York Regional Office to Host Educational Call for Investors
June 11, 2020
On June 23, 2020, from 5:00 to 6:00 p.m. Eastern, the U.S. Securities and Exchange Commission’s (SEC) New York Regional Office will host an educational telephone town hall about avoiding scams related to COVID-19. Marc P. Berger, Director of the SEC’s New York Regional Office, will moderate the event. Speakers at the event will include Craig Carpenito, U.S. Attorney for the District of New Jersey, and Gerri Walsh, President of the Financial Industry Regulatory Authority Foundation.
Federal Housing Finance Agency
FHFA Extends COVID-Related Loan Processing Flexibilities through July
June 11, 2020
The Federal Housing Finance Agency (FHFA) is extending until at least July 31 several loan origination flexibilities, offered by Fannie Mae and Freddie Mac, designed to assist borrowers during COVID-19. The extended flexibilities include:
(i) Alternative appraisals on purchase and rate term refinance loans;
(ii) Alternative methods for verifying employment before loan closing;
(iii) Expanded use of power of attorney and remote online notarizations to assist with loan closings; and
(iv) Authority to purchase mortgages in forbearance.
Department of Labor
Department of Labor Issues Unemployment Insurance Weekly Claims Report
June 11, 2020
The U.S. Department of Labor issued its Unemployment Insurance Weekly Claims report for the week ending June 6, 2020. According to the report, the advance figure for seasonally adjusted initial claims was 1,542,000, a decrease of 355,000 from the previous week’s revised level; the previous week’s level was revised up by 20,000 from 1,877,000 to 1,897,000; the 4-week moving average was 2,002,000, a decrease of 286,250 from the previous week’s revised average; and, the previous week’s average was revised up by 4,250 from 2,284,000 to 2,288,250.
International
European Commission
EIB to Provide BioNTech up to €100 million in Debt Financing for Vaccine Development, Manufacturing
June 11, 2020
The European Investment Bank (EIB) and BioNTech concluded a €100 million debt financing agreement to support the development of BNT162, the company’s COVID-19 vaccine program. The deal will also allow BioNTech to expand its manufacturing capacity in order to quickly supply the vaccine worldwide. BioNTech was the first European company to enter clinical testing, having started a clinical trial in Germany in April, 2020 and a further clinical trial in the United States at the beginning of May, 2020. The EIB’s debt investment will be disbursed in two tranches of €50 million each, following completion of pre-defined milestones. The EIB’s investment is backed by the European Fund for Strategic Investments, the financial heart of the Investment Plan for Europe, in which the EIB and the European Commission partner to kick off investment for EU priority projects.
UK Financial Conduct Authority
FCA Issues Statement on Open Access Regime for Trading, Clearing of Exchange-Traded Derivatives
June 11, 2020
The UK Financial Conduct Authority (FCA) issued a statement on the open access regime for the trading and clearing of exchange-traded derivatives. According to the statement, beginning on July 4, 2020, trading venues and central counterparties (CCPs) offering the trading and clearing of exchange-traded derivatives will be subject to the open access regime set out in articles 35 and 36 of the Markets in Financial Instruments Regulation. Under those provisions, trading venues and CCPs may only deny access where the operational risk and complexity arising from granting access would cause undue risk. The statement notes the FCA supports the approach set out in the European Securities and Markets Authority’s (ESMA) June 11, 2020 statement, in which ESMA recommends relevant competent authorities consider the risks raised by COVID-19 in relation to open access for exchange-traded derivatives.