PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update -- Wednesday, October 21, 2020
October 21, 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. Senate
Committee on Small Business and Entrepreneurship
Small Business Capital Recovery Bill Introduced
October 20, 2020
U.S. Senators Marco Rubio (R-FL) and Jim Risch (R-ID), Chairman and former Chairman of the Senate Committee on Small Business and Entrepreneurship, along with Senators Susan Collins (R-ME) and Josh Hawley (R-MO), introduced the Small Business Access to Recovery Capital Act. The legislation would provide expanded relief measures to the Small Business Administration’s Section 7(a) loan program for one year to help businesses cope with challenges posed by the COVID-19 pandemic. The legislation would (i) waive borrower and lender fees; (ii) increase the government guarantee to 95%; (iii) increase the maximum loan value from $5,000,000 to $10,000,000; and (iv) waive debt repayment of principal, interest and fees for any new loans made under the Section 7(a) program for one year.
Federal Agencies
Federal Reserve Board
Agencies Issue Final Rule Addressing the Net Stable Funding Ratio to Strengthen Resilience of Large Banks
October 20, 2020
The Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency finalized a joint rule strengthening the resilience of large banks by requiring them to maintain a minimum level of stable funding over a one-year period. The net stable funding ratio (NSFR) final rule will require large banks to maintain a minimum level of stable funding, relative to each institution’s assets, derivatives, and commitments. The rule will become effective on July 1, 2021. Holding companies and covered nonbank companies regulated by the Federal Reserve will be required to publicly disclose their NSFR levels semiannually beginning in 2023.
The Financial Stability Board’s Roadmap for Addressing Vulnerabilities of Nonbank Financial Intermediaries
October 20, 2020
Randal K. Quarles, Vice Chair for Supervision at the Board of Governors of the Federal Reserve System, gave a speech at the Securities Industry and Financial Markets Association Annual Meeting titled “The Financial Stability Board’s Roadmap for Addressing NBFI Vulnerabilities.” In the speech, Mr. Quarles shares some of the emerging elements of the Financial Stability Board’s (FSB) review of the shocks related to COVID-19 and the associated containment measures, primarily how the shock moved through the financial system and which critical vulnerabilities it exposed. He also outlines further work that the FSB plans to conduct, including a more in-depth assessment of how various segments of the nonbank financial intermediation sector performed.
Modernizing and Strengthening CRA Regulations: A Conversation with the Housing Community
October 20, 2020
Governor Lael Brainard of the Board of Governors of the Federal Reserve System gave a speech at the National Housing Conference Advisory Council Meeting titled “Modernizing and Strengthening CRA Regulations: A Conversation with the Housing Community,” in which she discusses Community Reinvestment Act modernization and how the process can help address housing challenges facing minority and low- and moderate-income communities around the country.
Federal Reserve Bank of New York
The Federal Reserve’s Corporate Credit Facilities: Why, How, and For Whom
October 20, 2020
Daleep Singh, Executive Vice President of the Federal Reserve Bank of New York, gave a speech at the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness titled “The Federal Reserve’s Corporate Credit Facilities: Why, How and For Whom.” Mr. Singh explains why the Federal Reserve’s corporate credit facilities were necessary and why transparency, access and accountability were critical to their implementation.
Federal Deposit Insurance Corporation
The FDIC Approves Interim Final Rule to Provide Temporary Relief from Part 363 Audit and Reporting Requirements
October 20, 2020
The Federal Deposit Insurance Corporation (FDIC) issued an interim final rule (IFR) to provide relief for such insured depository institutions that, without regulatory action, would be required to incur substantial costs of a temporary basis due to the influx of cash resulting from participation in the Paycheck Protection Program, the Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility, or due to other factors such as the effects of other government stimulus efforts. The IFR will allow institutions that have experienced growth to determine whether they are subject to the requirements of Part 363 of the FDIC’s regulations for fiscal years ending in 2021 based on the lesser of the insured depository institution’s (a) consolidated total assets as of December 31, 2019 or (b) consolidated total assets as of the beginning of their fiscal years ending in 2021. The IFR is effective immediately.
Department of Housing and Urban Development/Federal Housing Administration
FHA Extends COVID-19 Forbearance Request Timeframe for Single Family Homeowners
October 20, 2020
The Federal Housing Administration (FHA) announced that it is extending the date for single family homeowners with FHA-insured mortgages to request an initial forbearance from their mortgage servicer to forbear their mortgage payments for up to six months. Homeowners experiencing a financial hardship as a result of the COVID-19 pandemic may now request an initial forbearance through the end of this year. Previously, homeowners with FHA-insured mortgages needing assistance had until October 30, 2020 to request a COVID-19-related financial hardship forbearance from their mortgage servicer.
Freddie Mac
September Securitization Forbearance Report Released
October 20, 2020
Freddie Mac released its September Securitization Forbearance Report, which details data received from master servicers that demonstrates the impact on Freddie Mac securitizations of (i) its forbearance relief plan implemented in March 2020 (which allows qualifying multifamily borrowers to defer up to three months of mortgage payments) and (ii) its supplemental relief options for qualified affected borrowers announced in June 2020.
International
Bank of England
Gertjan Vlieghe Delivers Speech “Assessing the Health of the Economy”
October 20, 2020
Gertjan Vlieghe, External Member of the Monetary Policy Committee of the Bank of England, gave a speech titled “Assessing the Health of the Economy.” In the speech, he examines the impact of the COVID-19 pandemic on the UK economy and the impact of the recent rise in infections on economic recovery.