Daily Financial Regulation Update -- Wednesday, July 14, 2021

July 14, 2021

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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 the full text of the Consolidated Appropriations Act, 2021, Enacted December 27, 2020.

Click here to view the full text of the American Rescue Plan of 2021, Enacted March 11, 2021.

Click here to view the full text of the PPP Extension Act of 2021, Enacted March 30, 2021.

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.

Major Developments

Agencies Request Comment on Proposed Risk Management Guidance for Third-Party Relationships

July 13, 2021

The federal bank regulatory agencies requested public comment on proposed guidance addressing third-party relationships, including relationships with fintechs. The proposed guidance homogenizes separate guidance by each agency identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance.

U.S. Senate

Committee on Banking, Housing, and Urban Affairs

Opening Statements at Hearing for Two Housing and Urban Development Nominees

July 13, 2021

U.S. Senator Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs (Committee), and Pat Toomey (R-PA), Ranking Member of the Committee, delivered opening statements at the nomination hearing for Arun Venkataraman to be Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service, and for Damon Y. Smith to be General Counsel of the Department of Housing and Urban Development.

Federal Agencies

Conference of State Bank Supervisors

Blog: Tough Times Ahead? Maybe…But Not Yet

July 13, 2021

CSBS published a blog post titled, "Tough Times Ahead? Maybe … But Not Yet." According to the post, second quarter 2021 Community Bank Sentiment Index indicates that community bankers remain optimistic, but policy concerns persist. Similar to last quarter's survey, community bankers expect better business conditions, higher profitability, stronger capital spending, greater franchise values, and plan to expand operations in the coming year. Yet at the same time, community bankers worry about a regulatory environment that is more heavy-handed and about harmful longer-run economic outcomes from possible monetary-policy missteps.

Blog Post

Consumer Financial Protection Bureau

Blog: Trends in Reported Assistance on Consumers' Credit Records

July 13, 2021

The Consumer Financial Protection Bureau (CFPB) published a blog post titled, "Trends in Reported Assistance on Consumers' Credit Records," the second in a series documenting trends in consumer credit outcomes during the COVID-19 pandemic.

Blog Post

International

European Banking Authority

EBA Publishes Final Guidelines for the Use of Data Inputs in the Expected Shortfall Risk Measure under the Internal Model Approach

July 13, 2021

The European Banking Authority (EBA) published its final Guidelines clarifying the requirements that the data inputs used to determine the scenarios of future shocks applied to modellable risk factors should meet. The Guidelines, which are part of the deliverables included in the roadmap for the new market and counterparty credit risk approaches, will be applicable beginning January 1, 2022.

Bank of England

Report: Financial Stability Report – July 2021

July 13, 2021

The Bank of England's Financial Policy Committee issued its Financial Stability Report setting forth its views on the stability of the UK financial system and what it is doing to remove or reduce any risks to it.

Report: Assessing the Resilience of Market-Based Finance

July 13, 2021

The Bank of England produced a report, "Assessing the Resilience of Market-Based Finance." The report includes the conclusions of the joint Bank of England and Financial Conduct Authority review into vulnerabilities associated with liquidity mismatch in open-ended funds.

Bank of England Prudential Regulation Authority

Statement: Update on Shareholder Distributions by Large UK Banks

July 13, 2021

The Prudential Regulation Authority (PRA) published a statement on December 10, 2020 titled, "Capital distributions by large UK banks." The PRA has reviewed its approach to shareholder distributions, paying particular attention to: developments in, and uncertainty around, the economic outlook, including the evolution of the COVID-19 pandemic and policies to mitigate the health impact – most notably vaccination programs; and banks' capital positions and trajectories, drawing on the interim results of the 2021 solvency stress test.