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Advice for Businesses in Dealing with the Expanding Coronavirus Events

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Daily Financial Regulation Update -- Tuesday, August 11, 2020

By
FedACTion Task Force
On Aug 11, 2020

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Major Developments

Federal Reserve Board

Federal Reserve Board Announces Individual Large Bank Capital Requirements, which will be Effective on October 1, 2020

August 10, 2020

The Board of Governors of the Federal Reserve System (Federal Reserve) announced individual large bank (i.e., those with more than $100 billion in total assets) capital requirements, effective October 1, 2020. The Federal Reserve’s release shows the total common equity tier 1, or CET1, capital requirements for each large bank.

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.

Federal Agencies

Federal Reserve Bank of New York

The Gradual Improvement in Consumer Expectations Halted in July

August 10, 2020

The Federal Reserve Bank of New York’s Center for Microeconomic Data released the July 2020 Survey of Consumer Expectations, which shows that household expectations regarding their employment prospects and their year-ahead financial situation slightly deteriorated in July after two months of gradual improvement. Other indicators, such as the expected growth in home price and in household income, remained steady at a considerably higher level than in March and April, but below their pre-COVID-19 levels. Median inflation expectations increased 0.2 points at the one-year and three-year horizons, respectively, while disagreement about future inflation also increased.

Implications of the COVID-19 Disruption for Corporate Leverage

August 10, 2020

The Federal Reserve Bank of New York’s Liberty Street Economics blog released a post titled “Implications of the COVID-19 Disruption for Corporate Leverage”. The authors examine the preliminary impact of the significant economic disruptions caused by the COVID-19 pandemic on the cash flow and leverage of U.S. public companies. The authors find that the pandemic had a negative impact on cash flow while also reducing corporations’ interest expenses. Looking ahead, they find that a sizable share of U.S. companies have interest expense greater than cash flow, raising concerns about the ability of those companies to endure further liquidity shocks.

Department of Housing and Urban Development/Federal Housing Administration

HUD Awards $472 Million to Public Housing Authorities to Help Keep Residents Housed

August 10, 2020

U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced $472 million in CARES Act funding to help low-income families during the COVID-19 pandemic. The funding can be used by Public Housing Authorities to help families assisted by Housing Choice Vouchers (HCV) and Mainstream vouchers prevent, prepare for and respond to COVID-19. The funding will be awarded to Public Housing Authorities across the country.