PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update -Thursday, May 28, 2020
May 28, 2020
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Major Developments
Federal Reserve Bank of Boston
Boston Fed Releases Additional Information for Potential Lenders and Borrowers in the Main Street Lending Program
May 27, 2020
The Federal Reserve Bank of Boston released additional information for potential lenders and borrowers in the Main Street Lending Program, including a form loan participation agreement, lender certifications and covenants, borrower certifications and covenants, updated Frequently Asked Questions and other legal documents.
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.
Federal Agencies
Department of the Treasury
SBA and Treasury Revise Paycheck Protection Program FAQ 45
May 27, 2020
The Small Business Administration and U.S. Department of Treasury revised Paycheck Protection Program (PPP) FAQ Question 45 (and related footnote 19) to update the safe harbor deadline for repaying a PPP loan to be eligible for the Employee Retention Credit (ERC). Employers who repaid their PPP loans by May 18, 2020 (revised from May 14, 2020) will be treated as though they had not received a covered PPP loan and thus remain eligible for the ERC.
Federal Reserve Board
Agencies Issue FAQs on CRA Consideration for Activities in Response to the Coronavirus
May 27, 2020
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the Agencies) issued Frequently Asked Questions (FAQs) on Community Reinvestment Act (CRA) consideration for activities in response to COVID-19. The FAQs provide additional clarification of the information included in the Agencies’ Joint Statement on CRA Consideration for Activities in Response to COVID-19 issued March 19, 2020.
Federal Reserve Updates Beige Book
May 27, 2020
The Federal Reserve System released its May 2020 Beige Book, which summarizes commentary on current economic conditions by Federal Reserve District. According to the report, economic activity declined in all districts – falling sharply in most – reflecting disruptions associated with the COVID-19 pandemic. Consumer spending fell further as mandated closures of retail establishments remained largely in place during most of the survey period. Declines were especially severe in the leisure and hospitality sector, with very little activity at travel and tourism businesses. Auto sales were substantially lower than a year ago, although several districts noted recent improvement.
Federal Reserve Bank of New York
New York Fed Posts Article on Job Training Mismatch and the COVID-19 Recovery: “A Cautionary Note from the Great Recession”
May 27, 2020
As part of its Liberty Street Economics web series, the Federal Reserve Bank of New York posted an article written by members of its Research and Statistics Group that discusses the role that workforce development programs may have in bridging worker skills gaps during the COVID-19 pandemic. In response to COVID-19, firms with products and services that complement social distancing may continue hiring during and beyond the recovery, while workers displaced from higher-risk industries are left to adjust to unfamiliar job opportunities. In light of difficulties that workforce development programs face in adjusting to uncertain structural changes, the article suggests that “wage insurance” cash transfers that subsidize some of the difference between prior and new jobs may be a more nimble solution than these programs.
Pandemic Response Accountability Committee
Pandemic Response Accountability Committee Announces Public Forum on June 3
May 26, 2020
Michael E. Horowitz, Acting Chair of the Pandemic Response Accountability Committee (PRAC), announced that the PRAC will hold a virtual public listening forum entitled, “Stakeholder Perspectives on Oversight of the Federal COVID-19 Spending and Response,” on June 3, 2020 at 2:00 pm, Eastern. The PRAC is composed of 20 Inspectors General from across the federal government leading efforts to promote transparency and support and conduct oversight of payments to individual citizens, loans for businesses, support for hospitals and other medical providers, and economic relief for impacted industries.
Fannie Mae
Fannie Mae Issues Payment Deferral Lender Letter
May 27, 2020
Fannie May issued a Lender Letter (LL-2020-05) addressed to all Fannie Mae Single-Family Services which introduces payment deferral, a new home retention workout option that enables servicers to assist eligible borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current.
Department of Labor
U.S. Department of Labor Awards Nearly $24 Million in Dislocated Worker Grants in Response to the Coronavirus Pandemic
May 27, 2020
The U.S. Department of Labor announced the award of four Dislocated Worker Grants (DWGs) totaling approximately $24 million to help address the workforce-related impacts of the public health emergency related to COVID-19. The awards are funded under the CARES Act, which provided $345 million for DWGs to prevent, prepare for and respond to the pandemic. This latest award follows four previous waves of funding, bringing the total amount awarded to states and territories to approximately $222 million.