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  • Daily Financial Regulation Update -- Saturday, January 23, 2020

    by
    FedACTion Task Force
    | Jan 23, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Administration Changes

    Modernizing Regulatory Review

    January 20, 2021

    The Biden Administration released a Memorandum for the Head of Executive Departments and Agencies titled “Modernizing Regulatory Review,” in which President Biden ordered the Director of Office of Management and Budget, in consultation with representatives of executive departments and agencies to begin a process with the goal of producing a set of recommendations for improving and modernizing regulatory review. 

    Regulatory Freeze Pending Review

    January 20, 2021

    The Biden Administration released a Memorandum on behalf of President Biden to the Heads of Executive Departments and Agencies titled “Regulatory Freeze Pending Review.” The Memorandum sets forth President Biden’s plan for managing the Federal regulatory process at the outset of his Administration and requests that the recipients of the Memorandum take certain steps in order to ensure that the President’s appointees or designees have the opportunity to review any new or pending rules.

    Appointments/Confirmation Hearings

    Department of the Treasury – Janet Yellen (Nominee)

    Consumer Financial Protection Bureau – Rohit Chopra (Nominee)

    Securities and Exchange Commission – Gary Gensler (Nominee)

    Small Business Administration – Isabel Guzman (Nominee)

    Department of Education – Miguel Cardona (Nominee)

    Commodity Futures Trade Commission

    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 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 Announces Democratic Committee Members for 117th Congress

    January 22, 2021

    House Small Business Committee Chairwoman Representative Nydia M. Velázquez (D-NY) announced the Committee’s Democratic roster for the 117th Congress. The Democratic Steering and Policy Committee selected the members and the Democratic Caucus voted for their approval. 

    Federal Agencies

    U.S. Department of the Treasury

    Fact Sheet: Treasury to Work to Ensure Families Get Access to Economic Impact Payments

    January 22, 2021

    In response to President Biden’s COVID-19 Economic Relief Executive Order, the U.S. Department of the Treasury announced its effort to help households who have not yet been able to access their stimulus payments. As many as 8 million households may be eligible for but have not yet received payments from the CARES Act.

    Federal Housing Finance Agency

    Annual Adjustment of the Cap on Average Total Assets That Defines Community Financial Institutions

    January 22, 2021

    Effective January 1, 2021, the Federal Housing Finance Agency has adjusted the cap on average total assets that is used in determining whether a Federal Home Loan Bank member qualifies as a “community financial institution” to $1.239 million, based on the annual percentage increase in the Consumer Price Index for all urban consumers.

    International

    Bank of England

    How Could the Recent Increase in Homeworking Affect the Economy?

    January 22, 2021

    The Bank of England released a post titled “How Could the Recent Increase in Homeworking Affect the Economy?” According to the post, it’s not yet clear if more widespread homeworking will persist and what, if any, economic effects it will have. There could be economic effects from more widespread homeworking, especially in the labor market. It could increase the amount of time spent on work: full-time homeworkers tend to work longer hours than their workplace-based colleagues, possibly because they spend less time commuting.

  • Daily Financial Regulation Update -- Friday, January 22, 2020

    by
    FedACTion Task Force
    | Jan 22, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Administration Changes

    Appointments/Confirmation Hearings

    Department of the Treasury – Janet Yellen (Nominee)

    Consumer Financial Protection Bureau – Rohit Chopra (Nominee)

    Securities and Exchange Commission – Gary Gensler (Nominee)

    Small Business Administration – Isabel Guzman (Nominee)

    Department of Education – Miguel Cardona (Nominee)

    Commodity Futures Trade Commission

    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 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

    Congresswoman Waters Announces Democratic Financial Services Committee Membership for the 117th Congress

    January 21, 2021

    Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee (Committee), announced the Democratic Committee membership for the 117th Congress. Appointments to the Committee are finalized once approved by the House Democratic Caucus.

    Federal Agencies

    Department of Housing and Urban Development/Federal Housing Administration

    Biden Administration Authorizes Extension of Federal Housing Administration Single Family Foreclosure and Eviction Moratorium

    January 21, 2021

    The Biden Administration requested the U.S. Department of Housing and Urban Development (HUD) and other federal agencies to extend its foreclosure and eviction moratorium for single family mortgages insured by the Federal Housing Administration or guaranteed by HUD’s Office of Native American Programs through March 31, 2021. The moratorium prohibits servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions for HUD insured or guaranteed single family forward and reverse mortgages, except for those secured by legally vacant and abandoned properties. Further, HUD requires mortgage servicers to provide up to six months of COVID-19 forbearance when a borrower experiencing a financial hardship due to COVID-19 requests this assistance, and up to an additional six months of COVID-19 forbearance for a borrower who requests an extension of the initial forbearance.

    U.S. Department of Labor

    Labor Department Issues Release on Unemployment Insurance Weekly Claims

    January 21, 2021

    The U.S. Department of Labor issued a release regarding weekly unemployment insurance claims. The release states that, in the week ending January 16, the advance figure for seasonally adjusted initial claims was 900,000, a decrease of 26,000 from the previous week’s revised level; the previous week’s level was revised down by 39,000 from 965,000 to 926,000; the four-week moving average was 848,000, an increase of 23,500 from the previous week’s revised average; and the previous week’s average was revised down by 9,750 from 834,250 to 824,500.

    U.S. Department of Education

    Secretary of Education Will Extend Pause on Federal Student Loan Payments

    January 21, 2021

    The U.S. Department of Education announced that the Acting Secretary of Education will extend the pause on federal student loan payments and collections and keep the interest rate at 0%.

    State Agencies

    New York State Department of Financial Services

    As Part of New York's Ongoing Response to the Covid-19 Pandemic, Governor Cuomo Announces Open Enrollment for New Yorkers Extended Through March 31, 2021

    January 21, 2021

    Governor Andrew Cuomo announced that the Open Enrollment Period for uninsured New Yorkers will be extended through March 31, 2021. New Yorkers can apply for coverage through New York’s Official Health Plan Marketplace or through insurers.

    Governor Cuomo Announces Investigations into Prescription Drug Price Spikes Connected To the COVID-19 Pandemic

    January 21, 2021

    Governor Andrew Cuomo announced the New York State Department of Financial Services’ newly formed Office of Pharmacy Benefits has initiated investigations into significant price spikes for six drugs that were connected to the COVID-19 pandemic.

  • Daily Financial Regulation Update -- Thursday, January 21, 2020

    by
    FedACTion Task Force
    | Jan 21, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    Treasury and SBA Issue Interim Final Rule on Loan Forgiveness Requirements and Updates Loan Forgiveness Applications

    January 19, 2021

    The U.S. Department of the Treasury and the U.S. Small Business Administration (i) issued an Interim Final Rule on loan forgiveness requirements and loan review procedures for loans made under the Paycheck Protection Program, as amended by the Economic Aid Act, and (ii) updated loan forgiveness applications related to such loans.

    PH FedACTion is now including updates to the regulatory landscape by the Biden-Harris Administration in addition to our continuing updates regarding the federal and state legal and regulatory response to the ongoing COVID-19 pandemic.

    Administration Changes

    Appointments/Confirmation Hearings

    Department of the Treasury – Janet Yellen (Nominee)

    Consumer Financial Protection Bureau – Rohit Chopra (Nominee)

    • Confirmation hearing to be scheduled (additional details to follow)
    • Director Kathleen L. Kraninger resigned effective January 20, 2021

    Securities and Exchange Commission – Gary Gensler (Nominee)

    • Confirmation hearing to be scheduled (additional details to follow)

    Small Business Administration – Isabel Guzman (Nominee)

    • Confirmation hearing to be scheduled (additional details to follow)

    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 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 Banking, Housing, and Urban Affairs

    Senators Brown and Reed Press FHFA for Information on Loan Sales Made During Covid-19 Pandemic

    January 20, 2021

    Senators Sherrod Brown (D-OH), presumed incoming chair of U.S. Senate Committee on Banking, Housing, and Urban Affairs and Jack Reed (D-RI), sent a letter to the Federal Housing Finance Agency (FHFA) requesting clarification on the FHFA’s policy regarding loan sales by Fannie Mae and Freddie Mac during the COVID-19 pandemic. The lawmakers requested clarity on the FHFA’s and Fannie Mae’s and Freddie Mac’s policies and urged them to do more to ensure that borrowers are protected by the foreclosure moratorium and forbearance protections.

  • Daily Financial Regulation Update -- Wednesday, January 20, 2020

    by
    FedACTion Task Force
    | Jan 20, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    PH FedACTion is now including updates to the regulatory landscape by the Biden-Harris Administration in addition to our continuing updates regarding the federal and state legal and regulatory response to the ongoing COVID-19 pandemic.

    Administration Changes

    Appointments/Confirmation Hearings

    Department of the Treasury – Janet Yellen (nominee)

    Consumer Financial Protection Bureau – Rohit Chopra (nominee)

    • Confirmation hearing to be scheduled (additional detail to follow)

    Securities and Exchange Commission – Gary Gensler (nominee)

    • Confirmation hearing to be scheduled (additional detail to follow)

    Small Business Administration – Isabel Guzman (nominee)

    • Confirmation hearing to be scheduled (additional detail to follow)

    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 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

    Conference of State Bank Supervisors

    CSBS Publishes Blog Post on Current Community Banker Concerns

    January 19, 2021

    The Conference of State Bank Supervisors (CSBS) published a blog post entitled “What Keeps Your Local Community Banker Up at Night?”, in which the CSBS examined issues facing community bankers during the uncertainty and economic turmoil caused by the COVID-19 pandemic.

    Federal Deposit Insurance Corporation

    Office of the Comptroller of the Currency
    Consumer Financial Protection Bureau
    National Credit Union Administration

    Agencies Approve Rule on the Role of Supervisory Guidance

    January 19, 2021

    The Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau and National Credit Union Administration approved a final rule outlining and confirming the agencies’ use of supervisory guidance for regulated institutions. The final rule codifies the interagency statement on the role of supervisory guidance, as amended, issued in September 2018 to clarify the differences between regulations and guidance, and states that the statement is binding on the agency. 

    Commodity Futures Trading Commission

    CFTC Staff Provides Limited Continuation of Certain No-Action Relief to Market Participants in Response to COVID-19

    January 19, 2021

    The Commodity Futures Trading Commission announced the Market Participants Division and the Division of Market Oversight are providing a short continuation of limited parts of the temporary no-action relief issued in response to the COVID-19 pandemic that expired on January 15, 2021.

    CFPB Release Details Prioritized Assessment Work

    January 19, 2021

    The Consumer Financial Protection Bureau (CFPB) issued a special edition of its Supervisory Highlights release, detailing the CFPB’s Prioritized Assessment (PA) supervisory work conducted last year after the sudden onset of the COVID-19 pandemic. The release describes PA observations in the areas of mortgage, auto and student loan servicing, credit card account management, consumer reporting-furnishing, debt collection, deposits, prepaid cards, and small business lending.

    U.S. Small Business Administration

    SBA Provides Update on PPP Loan Approval

    January 19, 2021

    The U.S. Small Business Administration announced it has approved approximately 60,000 Paycheck Protection Program (PPP) loan applications submitted by nearly 3,000 lenders, for more than $5 billion, between the program’s re-opening on January 11 and January 17.  

    International

    European Commission

    Commission Sets Out Key Actions for United Front to Beat COVID-19

    January 19, 2021

    Two days ahead of a meeting of European leaders on a coordinated response to COVID-19, the European Commission (Commission) set out several actions needed to intensify the fight against the COVID-19 pandemic. In a communication adopted today, the Commission calls on Member States to accelerate the rollout of vaccination across the EU.

    European Banking Authority

    EBA Observes Increase in Asset Encumbrance Ratio Amidst Extensive Use of Central Bank Facilities

    January 18, 2021

    The European Banking Authority (EBA) published its annual report (Report) on asset encumbrance. According to the Report, as COVID-19 spread across Europe and activity in primary markets froze, banks made extensive use of central bank liquidity facilities to build precautionary liquidity buffers and the asset encumbrance ratio rose substantially as a result thereof in the first half of 2020.

  • EDPB and EDPS adopt joint opinion on the new draft SCCs

    by
    Sarah Pearce
    | Jan 19, 2021

    On 15 January 2020, the European Data Protection Supervisor ("EDPS") and the European Data Protection Board ("EDPB") issued a press release announcing their adoption of a joint opinion on the draft new standard contractual clauses ("draft SCCs") published by the European Commission in November 2020. The opinions covered both international transfers ("International SCCs") and controller-processor relationships within the European Economic Area ("EEA") ("Controller-Processor SCCs").

    International SCCs

    Both the EDPS, Wojciech Wiewiórowski, and the EDPB Chair, Andrea Jelinek, welcomed the International SCCs, particularly the provisions included by way of response to the Schrems II Judgment providing a level of reinforced protection for data subjects and safeguards in cases where the laws of countries could impact the ability of any persons to comply with the obligations of the clauses.  However, the bodies commented that these International SCCs do not constitute a complete fix for all the issues raised by the judgement. The EDPB and EDPS identified a number of areas in the International SCCs requiring clarification such as their intended scope together with provisions relating to "certain third party beneficiary rights; obligations regarding onward transfers; aspects of the assessment of third country laws regarding access to public data by public authorities; and the notification to the supervisory authority."

    Controller-Processor SCCs

    The Controller-Processor SCCs were similarly welcomed “as a single, strong and EU-wide accountability tool that will facilitate compliance." However, certain clarifications were requested, essentially with a view to ensuring the Controller-Processor SCCs meet the intended aim of harmonization and legal certainty and operate as an effective accountability tool.  As well as increased precision around the relationship, roles and responsibilities of controllers and processors with regards to each processing activity, the bodies identified the "docking clause" (which gives additional parties the opportunity to accede to draft SCCs) as a particular area requiring attention.

    So what's next?

    It is worth noting that the submission of the joint opinions by the EDPS and EDPB was part of a wider public consultation process following the publication of the draft SCCs in November of last year - we have already seen certain other organizations publish critiques and recommended improvements to the draft SCCs and there are no doubt others.  The fate of the draft SCCs is now in the hands of the European Commission and its final decision on standard contractual clauses. On a procedural note, the EDPB and EDPS suggested the European Commission consider the final form of the Recommendations on Supplementary measures (once adopted) alongside their review of the draft SCCs given the importance of the supplementary measures in the new age of international data transfers post Schrems II.

  • Daily Financial Regulation Update -- Saturday, January 16, 2020

    by
    FedACTion Task Force
    | Jan 16, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    President-Elect Biden Releases $1.9 Trillion Coronavirus Plan

    January 14, 2021

    President-elect Biden announced the $1.9 trillion American Rescue Plan focused on
    (i) mounting a national vaccination program, containing the spread of COVID-19, and safely reopening schools; (ii) delivering immediate relief to working families affected by the COVID-19 crisis; and (iii) supporting communities that are struggling in the wake of COVID-19. The plan also will provide emergency funding to upgrade federal information technology infrastructure and address the recent breaches of federal government data systems.

    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 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 Banking, Housing, and Urban Affairs

    Senators Object to the VA’s COVID-19 Veterans Assistance Partial Claim Payment Program Proposal

    January 15, 2021

    Senators Sherrod Brown (D-OH), presumed incoming chair of U.S. Senate Committee on Banking, Housing, and Urban Affairs, Jack Reed (D-RI), presumed incoming chair of the U.S. Senate Committee on Armed Services, and Jon Tester (D-MT), presumed incoming chair of the U.S. Senate Committee on Veterans’ Affairs, sent a letter to the Department of Veterans Affairs (VA) expressing concern about the proposed COVID-19 Veterans Assistance Partial Claim Payment program. The lawmakers said that, as proposed, the program could add additional debt for military borrowers exiting forbearance, raise monthly costs and cause military borrowers to pay hundreds or thousands of dollars more than other borrowers.

    Senator Brown Applauds Biden Economic Rescue Package

    January 14, 2021

    U.S. Senator Sherrod Brown (D-OH), presumed incoming chair of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, released a statement supporting President-elect Biden’sCOVID-19 economic rescue package.

    Committee on Small Business and Entrepreneurship

    Senators Rubio, Cotton, and Colleagues Seek to Preclude PPP Loans to Planned Parenthood Facilities

    January 15, 2021

    U.S. Senators Marco Rubio (R-FL) and Tom Cotton (R-AR) sent a letter urging U.S. Small Business Administration (SBA) Administrator Jovita Carranza to attempt to prevent the SBA from extending Second Draw Paycheck Protection Program loans to Planned Parenthood affiliates.

    U.S. House of Representatives

    Committee on Financial Services

    Committee Releases Report on 2020 Activities

    January 15, 2021

    Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee (Committee), released a report on the Committee’s work during the second session of the 116th Congress. The report summarized that during the COVID-19 crisis, the Committee sought relief and protections to individuals, families and small businesses across the nation.

    Congresswoman Waters Urges President-Elect Biden to Issue Presidential Memorandum to Suspend Midnight Rulemakings

    January 14, 2021

    Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, sent another letter to President-elect Joseph R. Biden urging that the Biden Administration issue a Presidential memorandum on January 20 to temporarily suspend any end of term regulations promulgated by the Trump Administration. The Biden Transition team had already indicated that it would be issuing such a moratorium to review regulations issued at the end of the Trump Administration, according to media reports.

    Federal Agencies

    Federal Reserve Board

    Ten Days Late and Billions of Dollars Short: The Employment Effects of Delays in Paycheck Protection Program Financing

    January 15, 2021

    The Board of Governors of the Federal Reserve System released a paper titled “Ten Days Late and Billions of Dollars Short: The Employment Effects of Delays in Paycheck Protection Program Financing.” According to the authors, delay in the provision of Paycheck Protection Program (PPP) loans due to insufficient initial funding under the CARES Act substantially and persistently reduced employment. The authors’ estimates imply the PPP saved millions of jobs but larger initial funding could have saved millions more, particularly if it had been directed toward the smallest firms. About half of the jobs lost to insufficient PPP funding are lost in firms with fewer than 10 employees, despite such firms accounting for less than 20% of employment.

    Federal Reserve Bank of New York

    U.S. Economy in a Snapshot – January 2021

    January 15, 2021

    The Federal Reserve Bank of New York released analysis titled “U.S. Economy in a Snapshot,” based on data released through January 15, 2021. According to the analysis, consumer spending fell in November 2020, the first decline since April 2020. Real expenditures on goods fell more than spending on services. Overall spending was down 2% over the 2020 year, with purchase of goods up 7% and those for services down 7%.

    Blog: Discretionary and Nondiscretionary Services Expenditures during the COVID-19 Recession

    January 15, 2021

    The Federal Reserve Bank of New York’s Liberty Street Economics blog issued a post titled “Discretionary and Nondiscretionary Services Expenditures during the COVID-19 Recession.” In the post, the author examines the extraordinary impacts of the coronavirus pandemic, and the various measures used to address it, through the lens of personal consumption expenditures on discretionary and nondiscretionary services.

    U.S. Securities and Exchange Commission

    What's Happening from Start-Up to Small Cap: SEC’s Small Business Advocate to Host Capital Call on February 4, 2021

    January 15, 2021

    The U.S. Securities and Exchange Commission’s Office of the Advocate for Small Business Capital Formation will host its second annual Capital Call on February 4, 2021 at 1 p.m. Eastern. During the virtual event, office staff members will discuss what has been happening with capital raising across the country, including a spotlight on the impacts of the COVID-19 pandemic, the unique challenges faced by underrepresented businesses and the policy recommendations the office has developed in response.

    U.S. Small Business Administration

    SBA OIG Inspection of SBA's Implementation of the Paycheck Protection Program

    January 15, 2021

    The Office of Inspector General (OIG) of the U.S. Small Business Administration (SBA) issued an inspection report presenting the results of the OIG’s assessment of the SBA’s implementation of the Paycheck Protection Program, including the timing of implementation, lender participation, guidance provided to lenders and staff, timeliness of loan approval and disbursement and systems used to process lender loan approvals. 

    Ginnie Mae

    The Ginnie Mae Global Market Analysis Report – January 2021

    January 15, 2021

    Ginnie Mae released its Global Market Analysis Report for January 2021. According to the report, although the COVID-19 pandemic created substantial stress for the economy, the mortgage market has performed reasonably well. Lower rates improved payment affordability and widespread availability of forbearance under the CARES Act allowed borrowers impacted by COVID-19 to pause their monthly payments without damaging their credit history. The report also outlines Ginnie Mae’s actions to promote stability during the COVID-19 pandemic.

    International

    Bank of England Prudential Regulation Authority

    UK Deposit Takers Supervision Annual Conference for CEOs of the Non-Systemic UK Banks and Building Societies

    January 15, 2021

    On December 14, 2020, Melanie Beaman, Director of UK Deposit Takers Supervision hosted a webinar for the Chief Executive Officers of the Non-Systemic UK Banks and Building Societies. The webinar provided highlights and trends from COVID-19 data collection and focused on credit risk.

  • Daily Financial Regulation Update -- Friday, January 15, 2020

    by
    FedACTion Task Force
    | Jan 15, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    SBA Re-Opening Paycheck Protection Program to Small Lenders on Friday, January 15 and All Lenders on Tuesday, January 19

    January 13, 2021

    The U.S. Small Business Administration (SBA), in consultation with the U.S. Department of the Treasury, will re-open the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for first and second draw applications on January 15, 2021 at 9 a.m. Eastern. The portal will fully open on January 19, 2021 to all participating PPP lenders to submit first and second draw loan applications to the SBA.

    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 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

    Federal Reserve Bank of New York

    Speech: The Economic Health of the Region

    January 14, 2021

    Beverly Hirtle, Executive Vice President and Director of Research at the Federal Reserve Bank of New York, gave a speech titled “The Economic Health of the Region.” Ms. Hirtle’s remarks focus on the economic health of the Greater New York region during the COVID-19 pandemic.

    Federal Housing Finance Agency

    FHFA Further Extends COVID-Related Loan Flexibilities

    January 14, 2021

    The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend several loan origination flexibilities until February 28, 2021. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on January 31, 2021.

    U.S. Department of Labor

    Labor Department Issues Release on Unemployment Insurance Weekly Claims

    January 14, 2021

    The U.S. Department of Labor issued a release regarding weekly unemployment insurance claims. The release states that, in the week ending January 9, the advance figure for seasonally adjusted initial claims was 965,000, an increase of 181,000 from the previous week’s revised level; the previous week’s level was revised down by 3,000 from 787,000 to 784,000; the four-week moving average was 834,250, an increase of 18,250 from the previous week’s revised average; and the previous week’s average was revised down by 2,750 from 818,750 to 816,000.

  • Daily Financial Regulation Update -- Thursday, January 14, 2020

    by
    FedACTion Task Force
    | Jan 14, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    Office of the Comptroller of the Currency

    Acting Comptroller Steps Down; Blake Paulson Named New Acting Comptroller

    Acting Comptroller of the Currency Brian P. Brooks is stepping down on January 14, 2021, and pursuant to 12 USC 4, Chief Operating Officer Blake Paulson will become Acting Comptroller of the Currency.

    Federal Reserve Board

    Federal Reserve Releases Beige Book Report

    January 13, 2021

    The Federal Reserve System released its latest Beige Book report (Report), which summarizes commentary on current economic conditions by Federal Reserve District (District). According to the Report, which reflects information collected on or before January 4, 2021, most Districts reported that economic activity increased modestly since the previous Beige Book period, although conditions remained varied: two Districts reported little or no change in activity, while two others noted a decline.

    International

    European Banking Authority

    EBA Points to Continuing Rise in Capital and Leverage Ratios, Subdued Profitability

    January 13, 2021

    The European Banking Authority (EBA) published its quarterly Risk Dashboard, together with the results of the Risk Assessment Questionnaire. The 2020 third quarter data shows a rise in capital ratios, and an improvement in the non-performing loan ratio, while the return on equity remained significantly below banks’ cost of equity. The Risk Dashboard includes, for the first time, data on moratoria and public guarantee schemes.

    Bank of England

    Bank of England Responds to IEO’s Evaluation of its Approach to Quantitative Easing

    January 13, 2021

    The Bank of England (Bank) issued a response to a recent report by the Independent Evaluation Office (IEO) in which the IEO evaluated the Bank’s approach to quantitative easing.

    UK Financial Conduct Authority

    FCA Proposes Update to Guidance on Mortgages and Consumer Credit Repossessions

    January 13, 2021

    The UK Financial Conduct Authority (FCA) published draft guidance setting forth the FCA’s proposed approach to repossessions beginning on January 31, 2021. In November 2020, the FCA issued guidance for firms on the treatment of mortgage and consumer credit customers facing repossession due to COVID-19-related payment difficulties and provided that firms should generally not enforce repossessions before January 31, 2021. The draft guidance would allow consumer credit firms to repossess goods and vehicles beginning on January 31, 2021; however, under the guidance, repossession should be undertaken as a last resort, and subject to complying with relevant government public health guidelines and regulations. Under the proposed guidance, firms would also be expected to consider the impact on customers who may be vulnerable, including because of the COVID-19 pandemic, when deciding whether repossession of goods or vehicles is appropriate.

  • Daily Financial Regulation Update -- Wednesday, January 13, 2020

    by
    FedACTion Task Force
    | Jan 13, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    Federal Reserve Bank of New York

    Heterogeneity Series V: Understanding the Racial and Income Gap in COVID-19

    January 12, 2021

    The Federal Reserve Bank of New York’s Liberty Street Economics blog launched a four-part series that seeks to understand why low-income and majority-minority areas were considerably more affected by COVID-19, as captured by markedly higher case and death rates.

    Federal Reserve Bank of Boston

    Speech: The Economic Outlook – Optimism Despite the Challenges Ahead

    January 12, 2021

    Eric Rosengren, President and Chief Executive Officer of the Federal Reserve Bank of Boston, gave a speech titled “The Economic Outlook – Optimism Despite the Challenges Ahead.” Mr. Rosengren discusses COVID-19’s impact on the economy and the economic outlook for 2021.

    U.S. Small Business Administration

    Webinar about New Grant Program for Live Venues, Cultural Institutions & Related Industries

    January 12, 2021

    The U.S. Small Business Administration is conducting a webinar on January 14, 2021 at 3 p.m. Eastern, for an overview of the Shuttered Venue Operators Grant program included in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Eligible organizations with a reduction in revenue due to the COVID-19 pandemic will have the opportunity to receive up to a $10 million grant under the program.

    International

    Bank of England

    Speech: COVID and the Composition of Spending

    January 12, 2021

    Ben Broadbent, Deputy Governor, Monetary Policy at the Bank of England, gave a speech titled “COVID and the Composition of Spending.” Mr. Broadbent discusses how COVID has changed the spending habits of households, and he explores what this may mean for costs and inflation. 

  • US Banking Regulators Propose a 36 Hour Cyber Incident Reporting Rule

    by
    Behnam Dayanim, Jackie Cooney and Daniel Julian
    | Jan 12, 2021

    Federal financial regulatory agencies, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”) (collectively, the “Regulators”), issued on December 18, 2020, a Notice of Proposed Rulemaking titled “Computer-Security Incident Notification Requirements for Banking Organizations and Their Bank Service Providers.”

    Existing financial services (GLBA) regulatory guidance already requires supervised banking organizations to notify their primary federal regulators “as soon as possible” if they become aware of an incident involving unauthorized access to, or use of, sensitive customer information. However the existing requirements are narrow in scope and limited to incidents that result in the compromise of sensitive customer information. 

    The proposed rule would expand the reporting requirements to require supervised banking organizations to notify their primary federal regulators in the event of any “computer-security incident” that rises to the level of a “notification incident.” The proposed rule would also apply to companies that provide certain services to those banks, including data processing. Service providers would be required to notify “at least two individuals at affected banking organization customers immediately after the bank service provider experiences a computer-security incident that it believes in good faith could disrupt, degrade, or impair services provided for four or more hours.”

    The intent of the proposed rule is to provide the Regulators with an early warning of significant computer-security incidents, and would require notification as soon as possible and no later than 36 hours after a supervised banking organization determines that an incident has occurred. The Regulators note that the notification requirement is not intended to provide a complete and thorough assessment of any particular incident.

    In the proposed rule a “computer-security incident” is defined as “an occurrence that (i) results in actual or potential harm to the confidentiality, integrity, or availability of an information system or the information that the system processes, stores, or transmits; or (ii) constitutes a violation or imminent threat of violation of security policies, security procedures, or acceptable use policies.”  (Emphases added.)

    As noted above, notice to Regulators would be required where a “computer-security incident” escalates to the level of a “notification incident.” The proposed rule defines a “notification incident” as a computer-security incident that a supervised banking organization believes “in good faith could  materially disrupt, degrade, or impair

    1. the ability of the banking organization to carry out banking operations, activities, or processes, or deliver banking products and services to a material portion of its customer base, in the ordinary course of business;
    2. any business line of a banking organization, including associated operations, services, functions and support, and would result in a material loss of revenue, profit, or franchise value; or
    3. those operations of a banking organization, including associated services, functions and support, as applicable, the failure or discontinuance of which would pose a threat to the financial stability of the United States.”

    In the supplementary information section of the proposed rule, Regulators provide a “non-exhaustive list of events that would be considered “notification incidents” under the proposed rule:

    1. Large-scale distributed denial of service attacks that disrupt customer account access for an extended period of time (e.g., more than 4 hours);
    2. A bank service provider that is used by a banking organization for its core banking platform to operate business applications is experiencing widespread system outages and recovery time is undeterminable;
    3. A failed system upgrade or change that results in widespread user outages for customers and bank employees;
    4. An unrecoverable system failure that results in activation of a banking organization’s business continuity or disaster recovery plan;
    5. A computer hacking incident that disables banking operations for an extended period of time;
    6. Malware propagating on a banking organization’s network that requires the banking organization to disengage all Internet-based network connections; and
    7. A ransom malware attack that encrypts a core banking system or backup data.”

    Regulators acknowledge that a “computer-security incident” may result from non-malicious hardware or software, or from human error – and further explain that “[o]ther computer-security incidents, such as a limited distributed denial of service attack that is promptly and successfully managed by a banking organization, would not require notice to the appropriate agency.”

    Interested parties may submit comments within 90 days following publication of the proposed rule in the Federal Register.

  • Daily Financial Regulation Update -- Tuesday, January 12, 2020

    by
    FedACTion Task Force
    | Jan 12, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    U.S. Small Business Administration

    SBA Re-Opens PPP to Community Financial Institutions First

    January 11, 2021

    The U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury re-opened the Paycheck Protection Program (PPP) loan portal. The SBA is initially granting PPP access exclusively to community financial institutions.

    Management Alert: Paycheck Protection Program Loan Recipients on the Department of the Treasury’s Do Not Pay List

    January 11, 2021

    The Office of Inspector General (OIG) of the U.S. Small Business Administration (SBA) issued a management alert to alert SBA Administrator Jovita Carranza about improper payments to lenders for potentially ineligible recipients of loans under the SBA’s Paycheck Protection Program (PPP). Due to complaints of fraud received by the OIG, the OIG collaborated with the U.S. Department of the Treasury (Treasury) Do Not Pay Business Center, which identified high-risk transactions related to financial assistance to small businesses for the COVID-19 pandemic. The OIG’s review of the Treasury’s analysis showed approximately $3.6 billion in PPP loans to potentially ineligible recipients.

  • GLBA Safeguards Rule Enforcement – Renewed Attention on Vendor Data Security Practices

    by
    Jacqueline Cooney and Daniel Julian
    | Jan 11, 2021

    The Federal Trade Commission (“FTC”) announced a proposed settlement on December 15, 2020, with a mortgage analytics company that it maintains failed to adequately oversee the data security practices of one of its third-party vendors, as required under the Safeguards Rule of the Gramm-Leach Bliley Act (“GLBA”). This proposed settlement signals a focus on third-party scrutiny that companies should take seriously in the coming year.

    The Safeguards Rule and the Proposed Settlement

    The Safeguards Rule requires all applicable financial institutions to develop, implement, and maintain a comprehensive information security program. As part of such a program, financial institutions must review and oversee third-party vendors to ensure they are capable of implementing and maintaining appropriate security for customer information, in addition to including appropriate information security requirements in third-party vendor contracts.

    The FTC alleged that the mortgage analytics company’s third-party vendor, a company engaged to perform text recognition scanning on mortgage documents, stored the data from the scanned documents - including sensitive data about mortgage holders and others, such as names, dates of birth, Social Security numbers, loan information, credit and debit account numbers, and drivers’ license numbers - on a cloud-based server in plain text, and without any protections to block unauthorized access.

    The FTC claimed that the mortgage analytics company violated the Safeguards Rule by failing (i) to adequately review the third-party vendor at issue, as well as other third-party vendors; (ii) to implement information security safeguard requirements in third-party vendor contracts; and (iii) to conduct risk assessments for all of its third-party vendors.

    Pursuant to the proposed settlement, the company is required to implement a comprehensive information security program, as well as:

    • Assess, and document, at least every twelve (12) months and promptly following a security incident, internal and external threats to the security of GLBA covered information;
    • conduct written assessments of each third-party vendor to determine the adequacy of their safeguards at least every twelve (12) months and promptly following a security incident;
    • undergo biennial assessments of the effectiveness of its data security program by an independent organization, which the FTC has authority to approve;
    • have a senior company executive annually certify the institution is complying with the final FTC order;
    • report any future data breaches to the FTC within 10 days of notifying other federal or state government agencies.

    In addressing the importance and increased awareness of the Safeguards Rule requirements, Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, stated that “[o]versight of vendors is a critical part of any comprehensive data security program, particularly where those vendors can put sensitive consumer data at risk.” Financial institutions should ensure that they are in compliance with the Safeguards Rule generally and also engage in initial due diligence and continuous oversight of their vendors in order to avoid enforcement based on their vendors’ conduct.

    Key Takeaways

    This most recent settlement signals three significant considerations for financial institutions subject to FTC oversight and a fourth that is applicable more broadly:

    1. First, as highlighted in a virtual workshop hosted by the FTC in July to discuss proposed rule changes, it appears that the FTC may be increasing enforcements efforts relating to the Safeguards Rule.
    2. A potential point of focus for those Safeguards Rule enforcement efforts may be third-party vendor oversight – including both operational awareness of third-party vendor security measures as well implementation of appropriate contracting based on the types of data involved in the transfer.  
    3. Financial institutions need to operationalize written policies and procedures through implementing functional controls, conducting assessments, and ensuring appropriate contracting efforts, particularly around third-party risk.
    4. Lastly, there is no reason to believe the FTC will confine its scrutiny of vendor relationships solely to financial institutions. While the Safeguards Rule affords a ready basis on which to ground enforcement efforts, the FTC certainly asserts the authority more generally to require reasonable vendor practices as part of its general oversight of companies’ privacy and security representations.  Hence, all companies should take care to review their vendor relationships on a regular basis.
    Paul Hastings’ Privacy and Cybersecurity Solutions Group regularly works with clients to establish, implement and review third-party vendor relationships.  We would be happy to talk with you to discuss whether and how we might help.
  • Daily Financial Regulation Update -- Monday, January 11, 2020

    by
    FedACTion Task Force
    | Jan 11, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    Chairman Rubio Statement on the Reopening of the Paycheck Protection Program, including Summary of Aid Programs to Small Businesses, Nonprofits and Venues

    January 10, 2021

    U.S. Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, released a statement after the U.S. Department of the Treasury and the U.S. Small Business Administration announced the reopening of the Paycheck Protection Program (PPP) and provided for a summary of the various programs impacted by the reopening of the PPP.

    Federal Agencies

    U.S. Small Business Administration

    SBA Extends Crucial Lifeline to Borrowers Impacted by COVID-19 with Debt Relief

    January 10, 2021

    U.S. Small Business Administration (SBA) Administrator Jovita Carranza made a statement about Section 325 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act. The SBA is determining how much additional debt relief assistance can be provided to SBA borrowers with the newly issued Congressional appropriation. Debt relief guidance will soon be posted on the SBA website.

  • Daily Financial Regulation Update -- Saturday, January 9, 2020

    by
    FedACTion Task Force
    | Jan 09, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    SBA and Treasury Announce PPP Re-Opening and Issue New Guidance

    January 8, 2021

    The U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, announced that the Paycheck Protection Program (PPP) will re-open the week of January 11, 2021 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make first-draw PPP loans beginning January 11, 2021 and second-draw PPP loans beginning January 13, 2021. The PPP will open to all participating lenders shortly thereafter.

    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 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

    Senator Cardin Releases COVID-19 Relief Guide for Small Businesses

    January 8, 2021

    U.S. Senate Committee on Small Business & Entrepreneurship Ranking Member Ben Cardin (D-MD) released an updated COVID-19 relief guide to help small businesses access the loan and grant programs included in the recently enacted $900 billion relief bill. The guide follows the U.S. Small Business Administration’s announcement that the Paycheck Protection Program (PPP) will reopen to applications from mission lenders, including community development financial institutions, minority-depository institutions, micro-lenders and certified development companies, for first-time PPP borrowers on January 11, 2021. The mission lenders will begin processing second PPP loan applications on January 13, 2021 and the program will open to all participating lenders shortly thereafter.

    Senator Cardin Issues Statement on Nomination of Isabel Guzman as SBA Administrator

    January 8, 2021

    U.S. Senate Committee on Small Business & Entrepreneurship Ranking Member Ben Cardin (D-MD) issued a statement after President-elect Joe Biden announced that he will nominate Isabel Guzman as U.S. Small Business Administration (SBA) Administrator.

    Federal Agencies

    Federal Reserve Board

    Speech: U.S. Economic Outlook and Monetary Policy

    January 8, 2021

    Richard H. Clarida, Vice Chair of the Board of Governors of the Federal Reserve System, gave a speech at the C. Peter McColough Series on International Economics Council on Foreign Relations titled “U.S. Economic Outlook and Monetary Policy.” His speech focuses on the current economic situation and outlook, and the latest Federal Open Market Committee decision and the new monetary policy framework.

    Federal Reserve Bank of New York

    New York Fed Announces Blog Series on Understanding the Racial and Income Gap in COVID-19

    January 8, 2021

    The Federal Reserve Bank of New York’s Liberty Street Economics blog will release a consecutive four-part series exploring the reasons behind income and racial disparities as they relate to low-income and majority-minority areas that were considerably more affected by COVID-19. Each post will examine (i) whether certain factors – including comorbidities, uninsurance, hospital resources, home and transit crowding, social distancing, pollution, demographic, and essential employment factors – affect overall COVID intensity, (ii) whether the income and racial gaps can be further explained when additional factors are included, and (iii) whether and to what extent the factors under consideration independently affect income and racial gaps in COVID intensity.

    National Credit Union Association

    Register Now for Paycheck Protection Program Interagency Webinar

    January 8, 2021

    Officials from the U.S. Small Business Administration and U.S. Department of the Treasury will host a webinar on the new Paycheck Protection Program features associated with the recently-passed Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. The “Ask the Regulators” webinar will take place on January 11, 2021, at 2 p.m. Eastern.

    U.S. Bureau of Labor Statistics

    December 2020 Employment Situation Release

    January 8, 2021

    The U.S. Bureau of Labor Statistics released its December 2020 Employment Situation data. According to the release, total nonfarm payroll employment declined by 140,000 in December 2020, and the unemployment rate was unchanged at 6.7%. The decline in payroll employment reflects the recent increase in COVID-19 cases and efforts to contain the pandemic. In December 2020, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade, and construction.

    Occupational Safety and Health Administration

    U.S. Department of Labor’s OSHA Announces Almost $4 Million In Coronavirus Violations

    January 8, 2021

    The U.S. Department of Labor Occupational Safety and Health Administration announced that, since the start of the coronavirus pandemic through December 31, 2020, it issued citations arising from 300 inspections for violations relating to coronavirus, resulting in proposed penalties totaling approximately $3.9 million.

  • Daily Financial Regulation Update -- Friday, January 8, 2020

    by
    FedACTion Task Force
    | Jan 08, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    Major Developments

    SBA Issues Interim Final Rules on Revised Paycheck Protection Program, as Amended by the Economic Aid Act

    January 6, 2021

    The U.S. Small Business Administration issued interim final rules providing additional guidance on the Paycheck Protection Program (PPP), as amended by the Economic Aid Act under the Consolidated Appropriations Act, 2021. The new rules govern:

    (i) second draw and new PPP loans made under the Economic Aid Act;

    (ii) applications for loan forgiveness on existing PPP loans where the loan forgiveness payment has not been remitted; and

    (iii) loan applications and applications for loan forgiveness submitted for PPP Second Draw Loans.

    Letter from the SBA Administrator: Guidance on Accessing PPP Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns

    January 6, 2021

    The U.S. Small Business Administration (SBA) issued a letter outlining steps the SBA is taking to implement the Economic Aid Act and to ensure increased access to Paycheck Protection Program (PPP) capital for minority, underserved, veteran, and women-owned business concerns, including, among other things:

    (i) accepting PPP loans only from community financial institutions for at least the first two days when the PPP loan portal re-opens;

    (ii) continuing to set aside dedicated hours to process and assist the smallest PPP lenders which their PPP loans;

    (iii) working to directly match borrowers to small lenders who can aid traditionally underserved communities; and

    (iv) continuing to strongly encourage community development financial institutions and minority-, women-, veteran- and military-owned lenders to apply to become PPP lenders.

    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 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

    U.S. Department of the Treasury

    Treasury Launches $25 Billion Emergency Rental Assistance Program

    January 7, 2021

    The U.S. Department of the Treasury launched the $25 billion Emergency Rental Assistance Program (Program) established by the Consolidated Appropriations Act, 2021. The Program assists households that are unable to pay rent and utilities due to the COVID-19 pandemic. The funds are provided directly to states (including the District of Columbia), U.S. Territories, local governments with more than 200,000 residents, the Department of Hawaiian Home Lands, and Indian tribes (defined to include certain Alaska native corporations) or the tribally designated housing entity of an Indian tribe.  Eligible grantees must use the funds to provide assistance to eligible households through existing or newly created rental-assistance programs. 

    Treasury is Delivering Millions of Economic Impact Payments by Prepaid Debit Card

    January 7, 2021

    The U.S. Department of the Treasury (Treasury) announced that Treasury and the Internal Revenue Service (IRS) began sending approximately eight million Economic Impact Payments (EIPs) by prepaid debit card. The distribution of EIP cards follows the millions of payments already made by direct deposit and the ongoing mailing of paper checks and are part of Treasury’s and the IRS’s plan to deliver EIPs as rapidly as possible.

    U.S. Department of Labor

    Labor Department Issues Release on Unemployment Insurance Weekly Claims

    January 7, 2021

    The U.S. Department of Labor issued a release regarding weekly unemployment insurance claims. The release states that, in the week ending January 2, the advance figure for seasonally adjusted initial claims was 787,000, a decrease of 3,000 from the previous week’s revised level; the previous week’s level was revised up by 3,000 from 787,000 to 790,000; the four-week moving average was 818,750, a decrease of 18,750 from the previous week’s revised average; and the previous week’s average was revised up by 750 from 836,750 to 837,500.

    International

    European Commission

    Coronavirus Response and Recovery: EU Support for Regions to Work Together in Innovative Pilot Projects

    January 7, 2021

    The European Commission announced the winners of a new EU-funded initiative for interregional partnerships in four areas: coronavirus-related innovative solutions, circular economy in health, sustainable and digital tourism, and hydrogen technologies in carbon–intensive regions. The aim of the new initiative is to mobilize regional and national innovation actors to address the impact of the coronavirus pandemic.

    Bank of England

    Monthly Decision Maker Panel Data - December 2020

    January 7, 2021

    The Bank of England released results from the December 2020 Decision Maker Panel. In December, businesses estimated that their sales in 2020 Q4 would be 16% lower than they otherwise would have been because of COVID-19, with employment 8% lower and investment 20% lower. Overall uncertainty remained high in December, with little change from November. The percentage of businesses that viewed overall economic uncertainty as high or very high rose marginally from 67% to 68% in December, and remains much higher than 41% at the start of 2020.

    Speech: From Lender of Last Resort to Market Maker of Last Resort via the Dash for Cash: Why Central Banks Need New Tools for Dealing with Market Dysfunction

    January 7, 2021

    Andrew Hauser, Executive Director, Markets at the Bank of England, gave a speech titled “From Lender of Last Resort to Market Maker of Last Resort via the Dash for Cash: Why Central Banks Need New Tools for Dealing with Market Dysfunction.” Mr. Hauser discusses the evolving role of the central bank as a provider of market liquidity, and he examines what was learned from the “dash for cash” in March 2020.

    UK Financial Conduct Authority

    FCA Publishes Coronavirus Financial Resilience Survey Data

    January 7, 2021

    The Financial Conduct Authority (FCA) published the results of its coronavirus financial resilience surveys. The surveys were sent to solo-regulated firms to inform the FCA of the impact of coronavirus on firms’ financial resilience.

  • Daily Financial Regulation Update -- Thursday, January 7, 2020

    by
    FedACTion Task Force
    | Jan 07, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    Federal Reserve Board

    Minutes of the Federal Open Market Committee, December 15-16, 2020

    January 6, 2021

    The Board of Governors of the Federal Reserve System and the Federal Open Market Committee (FOMC) released the minutes of the FOMC meeting held on December 15-16, 2020.

    Conference of State Bank Supervisors

    Community Bankers Positive on Business Conditions; Concerned About Regulatory Burden and Profitability

    January 6, 2021

    The Conference of State Bank Supervisors issued a press release titled “Community Bankers Positive on Business Conditions; Concerned about Regulatory Burden and Profitability.” According to the most recent Community Bank Sentiment Index, community bankers’ assessment about future economic and financial conditions improved at the end of 2020 but still indicates a marginally negative outlook that falls well below confidence levels before the COVID-19 pandemic and economic lockdowns.

  • Daily Financial Regulation Update -- Wednesday, January 6, 2020

    by
    FedACTion Task Force
    | Jan 06, 2021

    Subscribe to PH FedACTion: Financial Regulatory Updates

    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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 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

    Federal Housing Finance Agency

    FHFA Announces Fannie Mae's and Freddie Mac's Duty to Serve Underserved Markets Plans for 2021

    January 5, 2021

    The Federal Housing Finance Agency (FHFA) published the 2021 Underserved Markets Plans for Fannie Mae and Freddie Mac under the Duty to Serve program. Due to potential market disruption and uncertainty as a result of the COVID-19 pandemic, FHFA instructed Fannie Mae and Freddie Mac to submit plans for one year (2021) only, as an extension of their 2018-2020 plans. The 2021 plans became effective January 1, 2021.

    Ginnie Mae

    A Time to Reflect on Both the Past and the Future

    January 5, 2021

    Ginnie Mae released a post titled “A Time to Reflect on Both the Past and the Future.” The post describes Ginnie Mae’s strategic response to the COVID-19 pandemic and discusses its upcoming plans for the temporary programs it put in place in 2020.

  • 2021 will be the year of a new enforcement framework for the protection of the EU financial interests

    by
    Nicola Bonucci
    | Jan 05, 2021

    With the formal entry into force of the new European Public Prosecutor’s Office (EPPO) on January 1, 2021, the EU—as well as countries having joined EPPO[1]—are adjusting to the new reality.

    Just before Christmas, the EU issued a new regulation (Regulation 2020/2223F) as regards cooperation with the European Public Prosecutor’s Office and the effectiveness of the investigations to be carried out by the European Anti-Fraud Office (the “Office,” also known as the OLAF).[2]  The Regulation amends and complements existing texts and is crucial in setting up the new framework

    The Regulation recalls that, in order to protect the financial interests of the Union, OLAF conducts administrative investigations into both administrative irregularities and criminal conduct. Until now, the Office, at the end of its investigations, was to make judicial recommendations to the national prosecution authorities, in order to enable them to pursue indictments and prosecutions in Member States. The Regulation provides that, as of January 2021, the Office shall report suspected criminal offences to the Member States participating in the EPPO  and collaborate with the EPPO in the context of any EPPO investigations that may result.

    The Regulation further stresses that the Office should, in principle, not open an administrative investigation in parallel with an investigation by the EPPO into the same facts. However, in certain cases, the protection of the financial interests of the Union may require that the Office carry out a complementary administrative investigation before the conclusion of criminal proceedings initiated by the EPPO.  According to the Regulation, such a complementary investigation may be appropriate, inter alia: (1) to recover amounts due to the Union budget that are subject to specific time-barring rules;(2) where the amounts at risk are very high, or (3) where there is the need to avoid further expenditure in risk situations through administrative measures.

    Importantly, Article 3 of the new Regulation introduces a duty on the part of economic operators to cooperate with the Office in the course of its investigations and notes that the Office may request written and oral information, including through interviews.

    This duty of cooperation is in line with the fact that any person or entity receiving Union funds is due to fully cooperate in the protection of the financial interests of the Union, including in the context of investigations by the Office.

    The Regulation further clarifies OLAF powers to conduct on-the-spot checks and inspections, including access to the premises and documentation of “economic operators” in the framework of its investigations into suspected fraud, corruption or other illegal conduct affecting the financial interests of the Union.  The Regulation provides that OLAF powers for on-the-spot checks and inspections are limited under “the same conditions as those that apply” to limit access to information and documentation by “national administrative inspectors.”

    In light of these reinforced powers, the Regulation also introduces new guarantees.  Thus, article 9a) of the Regulation creates an independent “Controller of procedural guarantees,” to be appointed for a non-renewable term of office of five years.

    Article 9b) provides a right to lodge complaints to the Controller regarding “the Office’s compliance with the procedural guarantees referred to in Article 9, as well as on the grounds of an infringement of the rules applicable to investigations by the Office, in particular infringements of procedural requirements and fundamental rights.”

    Article 12 of the Regulation deals with the coordination and cooperation between OLAF and EPPO, including both how the Office shall report criminal conduct to EPPO as well as how it should support and coordinate with EPPO to avoid duplication of investigations.

    Finally, yet importantly, the Regulation provides that OLAF “shall agree on working arrangements with the EPPO” that include “practical arrangements for the exchange of information, including personal data, operational, strategic or technical information and classified information, and complementary investigations.”

    The Regulation further specifies that such arrangements shall  cover “continuous exchange of information during the receipt and verification of allegations for the purpose of determining the competence over investigations” and “the transfer of information between the Office and the EPPO, when the Office acts in support or in a complementary manner to the EPPO.”

    The Regulation, which shall be binding in its entirety and directly applicable in all Member States, is of major importance not only for those countries that have joined the EPPO, but also for all EU Members in light of the clarification and reinforcement of OLAF powers of investigation.

    The practical impact of the Regulation is amplified by the political agreement of EU members on December 18, 2020,  setting up the Recovery and Resilience Facility (the “Facility”) to make €672.5 billion in loans and grants in support of reforms and investments by Member States.[3]

    While the EU framework is being established, the national frameworks are also being modified accordingly.  Hence, on December 24, the French Parliament adopted a law to adjust its legal framework to the new European Public Prosecutor’s Office.[4]

    With this framework now in place, it remains to be seen how it will work in practice. In  a recent interview,  EPPO Head Laura Kovesi discussed the concurrent resource and staffing expansion under way at EPPO:

    “[W]ith 3,000 cases expected to land on our desks when we start, we now have funding for 140 European delegated prosecutors, but we are still missing resources for key Luxembourg-based staff, who will be key to the success of our mission.  We need financial investigators and case analysts.  With their expertise, we can aggregate and analyze information to investigate cross-border crime more efficiently. Until now, all the prosecutors were focused on their own internal criminality, and they didn’t always have access to information outside their borders—like bank accounts and specific financial transactions. The EPPO makes this possible.”[5]

    Companies operating in the European Union will therefore be well advised to consider this new framework and become familiar with EPPO as well as with  the new powers and prerogatives provided to OLAF.



    [1] There are currently 22 EU member states participating in the EPPO (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Slovenia, Slovakia, Spain).

    [4] Loi n° 2020-1672 du 24 décembre 2020 relative au Parquet européen, à la justice environnementale et à la justice pénale spécialisée in https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000042737977

  • The UK officially leaves the EU, but what does this mean for transfers of personal data?

    by
    Sarah Pearce and Ashley Webber
    | Jan 05, 2021

    On 24 December 2020, it was announced that the EU and the UK had finally reached a Brexit agreement (the Trade and Cooperation Agreement) and on the evening of 31 December 2020, the Brexit Transition Period officially ended.  We have discussed on several occasions the effects Brexit will have on data privacy (for example, please see here), including the implementation of a UK GDPR in replacement of the GDPR and the effect on transfers of personal data from the EU to the UK.  The points previously raised were discussed in the context of the end of the Transition Period being their “trigger” and, subject to the effects on data transfers (as discussed below), such points are all now very much active issues which any organisation processing personal data in the UK and EU should be aware of. 

    The UK GDPR

    Following the end of the Transition Period, the UK is no longer subject to the GDPR.  However, the UK has incorporated the GDPR into UK law to the fullest extent possible (subject to certain amendments required for the UK legal regime): the key principles and obligations of the GDPR are enshrined in the UK GDPR.  This means that for any organisations processing personal data in the UK post-Brexit, the position with regard to processing UK personal data essentially remains the same as under the GDPR.  

    Data Transfers from the EU to the UK

    As noted above, our previous discussions on the effects of Brexit on data privacy focused on the end of the Transition Period essentially being the trigger for such effects occurring.  It was anticipated that from 1 January 2021, the UK would be considered a third country under the GDPR for data transfer purposes given it was no longer an EU member state.  However, it was agreed in the Trade and Cooperation Agreement that, instead, the UK will be given a further “Specified Period” (i.e., a further Transition Period) with respect to data transfers: during such time the UK will not be treated as a third country.  This means personal data can continue to flow freely from the EU to the UK.  This Transition Period allow for the continued pursuit of a European Commission adequacy decision in favour of the UK. The “Specified Period” began on 1 January 2021 and ends either: 1) on the date on which an adequacy decision is adopted; or 2) four months after the Specified Period begins, which shall be extended by two months unless either the EU or the UK objects (i.e., no later than 1 June 2021).

    This Specified Period for transfers was not something widely discussed or expected before its announcement, and therefore many organisations took steps to ensure data transfers post-Brexit would not be unlawful (e.g., implementation of Standard Contractual Clauses).  It’s important to highlight that such actions were not undertaken in vain: firstly, it is not guaranteed whether an adequacy decision will in fact be granted and, if not, organisations will be required to take such actions (and act quickly to implement); and secondly, undertaking a review of international data transfers and being aware of data flows is key for compliance with data privacy laws, particularly given the impact of the decision in Schrems II in July 2020.

    So what’s next?

    With regard to data transfers, we find ourselves in a sort of “holding pattern” until the Specified Period ends.  The ability to transfer data freely during this transition is particularly useful for those organisations that had not been prepared and not considered the impact Brexit would have on data privacy compliance; such an analysis should nevertheless be undertaken as soon as possible.  Further, the potential for an adequacy decision is hopeful news as such a decision will make the flows of personal data for organisations operating in the EU and the UK significantly easier.  We will continue to monitor the situation and provide updates as to its progress.

  • Daily Financial Regulation Update -- Tuesday, January 5, 2020

    by
    FedACTion Task Force
    | Jan 05, 2021

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    PH Client Alerts

    Click here to read more from our Coronavirus series.

    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.

    International

    Bank of England

    Bank of England Issues Monthly Money and Credit Statistical Release

    January 4, 2021

    The Bank of England (Bank) issued its Money and Credit statistical release (Release) for November 2020. The Release contains monthly statistics on the amount of, and interest rates on, borrowing and deposits by households and businesses.

    Bank of England Issues Monthly Effective Interest Rates Statistical Release

    January 4, 2021

    The Bank of England (Bank) issued its Effective Interest Rates statistical release (Release) for November 2020. The Release contains average interest rates across deposit or loan accounts with UK banks and building societies, calculated using data on rates and balances.

    Bank of England Issues Monthly Capital Issuance Statistical Release

    January 4, 2021

    The Bank of England (Bank) issued its Capital Issuance statistical release (Release) for November 2020. The Release contains statistics on UK-based primary market issuance of bonds, and commercial paper and equity..