PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Saturday, May 9, 2020
May 09, 2020
FedACTion Task Force
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Major Developments
SBA’s OIG Issues Flash Report on Small Business Administration's Implementation of the Paycheck Protection Program Requirements
May 8, 2020
The Office of Inspector General (OIG) of the Small Business Administration (SBA) produced a flash report regarding its review of the SBA’s implementation of the Paycheck Protection Program (PPP). The report analyzed key provisions of Section 1102 of the CARES Act and the SBA’s Interim Final Rules and public guidance intended to further inform stakeholders of SBA’s implementation of the PPP. The report found that, while the SBA’s Interim Final Rules and its guidance mostly aligned with the Act, the following areas were not in alignment: prioritizing underserved and rural markets; loan proceeds eligible for forgiveness; guidance on loan deferment; and registration of loans.
Congress
Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), 116 HR. 748, 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 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
Waters, Heck and Brown Introduce Legislation to Provide Emergency Rental Assistance During COVID-19 Crisis
May 8, 2020
Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, Congressman Denny Heck (D-WA), and Senator Sherrod Brown (D-OH), Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, announced the introduction of the Emergency Rental Assistance and Rental Market Stabilization Act of 2020. The legislation would create a $100 billion emergency rental assistance fund to help families and individuals pay their rent and utility bills during the COVID-19 pandemic and would generally utilize the framework of the Emergency Solutions Grant program, an existing federal homeless assistance program that provides temporary rental and utility payment assistance to households.
Federal Agencies
Federal Reserve Board
Federal Reserve Issues Supervision and Regulation Report
May 8, 2020
The Board of Governors of the Federal Reserve System (the Federal Reserve) published a report focused on the Federal Reserve’s regulatory and supervisory response to the economic and financial stresses resulting from containment measures adopted in response to current public health concerns. In addition, the report provides an overview of trends in the banking sector based on data collected by the Federal Reserve and other federal financial regulatory agencies, as well as market indicators of industry conditions.
Agencies Issue Interagency Policy Statement on Allowances for Credit Losses and Guidance on Credit Risk Review Systems
May 8, 2020
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency (the agencies) approved an interagency policy statement on allowances for credit losses. The statement is intended to promote consistency in the interpretation and application of the Financial Accounting Standards Board’s credit losses accounting standard, which introduces the current expected credit losses methodology. The agencies also finalized interagency guidance on credit risk review systems. The guidance presents principles for establishing a system of independent, ongoing credit risk review in accordance with safety and soundness standards.
FINRA
FINRA Files Proposed Rule Change to Temporarily Amend Certain Timing, Method of Service and Other Procedural Requirements in FINRA Rules During the Outbreak of COVID-19
May 8, 2020
The Financial Industry Regulatory Authority, Inc. (FINRA) filed with the Securities and Exchange Commission proposed amendments to FINRA Rules to provide FINRA with temporary relief from certain timing, method of service and other procedural requirements during the period in which FINRA’s operations are impacted by the ongoing COVID-19 global pandemic. The proposed rule change would also require applicants, respondents and other parties to serve or file certain documents or other information by electronic mail, unless the parties agree to an alternative method, during this same time period. As proposed, these changes would be in place through June 15, 2020.
International
European Commission
Commission expands Temporary Framework to Recapitalization and Subordinated Debt Measures to Further Support the Economy during the COVID-19 Outbreak
May 8, 2020
The European Commission adopted a second amendment to extend the scope of the State aid Temporary Framework adopted on March 19, 2020 to enable Member States to support the economy in the context of the coronavirus outbreak. The second amendment complements the types of measures already covered by the Temporary Framework and existing State aid rules by setting out criteria based on which Member States can provide recapitalizations and subordinated debt to companies in need.
Commission invites Member States to Extend Restriction on Non-Essential Travel to the EU until June 15, 2020
May 8, 2020
The European Commission (the Commission) invited Schengen Member States and Schengen Associated States to extend the temporary restriction on non-essential travel to the EU until June 15, 2020. The Commission also emphasized the need for a phased lifting of travel restrictions as underlined in the Joint European Roadmap, which states that internal border controls will need to start being lifted gradually and in a coordinated manner before restrictions at the external borders can be relaxed in a second stage.