PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Friday, April 17, 2020

April 18, 2020

FedACTion Task Force

PH Client Alerts

Click here to read more from our Coronavirus series.

Major Developments

COVID-19: SBA Releases Report on the Paycheck Protection Program through April 16

April 17, 2020

The Small Business Administration (SBA) released a report on approvals under the Paycheck Protection Program through noon, Eastern Time, on April 16, 2020. The report indicates the SBA approved more than 1.66 million for more than $342.27 billion through almost five thousand lenders. The data also includes breakdowns by state/territory, loan size, and industry.

COVID-19: Federal Reserve Board announces Regulation O modification to bolster the effectiveness of the Small Business Administration’s Paycheck Protection Program

April 17, 2020

The Federal Reserve Board (the Board) announced a rule change to bolster the effectiveness of the Small Business Administration's (SBA) Paycheck Protection Program (PPP). Board rules generally limit the types and quantity of loans that bank directors, shareholders, officers, and businesses owned by these persons can receive from their related banks. The change will temporarily modify such rules so that certain bank directors and shareholders can apply for PPP loans for their small businesses.

COVID-19: New York Fed Releases Frequently Asked Questions (FAQ) on the Primary Market and Secondary Market Corporate Credit Facilities

April 17, 2020

The Federal Reserve Bank of New York released a series of FAQs to address programmatic inquiries about the Primary Market and Secondary Market Corporate Facilities (PMCCF and SMCCF). The PMCCF and SMCCF support credit for bond and syndicated loan issuances and by providing liquidity for outstanding corporate bonds.


Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), 116 HR. 748, Enacted March 27, 2020.

Click here to view 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

COVID-19: Crapo Outlines Oversight Requirements in Title IV of CARES Act, Urges Action on Lending Facilities

April 16, 2020

U.S. Senator Mike Crapo (R-Idaho), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs (the Committee), sent two letters to the U.S. Department of the Treasury and Federal Reserve Board on provisions under Title IV of the CARES Act. The first letter highlights oversight activities required under Title IV of the CARES Act, including Section 13(3) reporting requirements under the Federal Reserve Act and additional oversight requirements, such as the creation of a Special Inspector General for Pandemic Recovery and the Congressional Oversight Commission. The second letter urges action on several issues with respect to Section 13(3) emergency lending facilities, including the Paycheck Protection Program Loan Facility, Main Street Lending Facilities, TALF, Primary and Secondary Market Corporate Credit Facilities, and the Municipal Lending Facility.

U.S. House of Representatives

Committee on Financial Services

COVID-19: Waters Urges Fed to Address Concerns Regarding COVID-19 Programs and Facilities Needed to Support Small Businesses and the Economy

April 16, 2020

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, sent a letter to Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, urging him to address concerns regarding the implementation of programs and facilities authorized by the CARES Act. In the letter, the Chairwoman outlines numerous issues including:

(i) the Federal Reserve’s narrow design of the Municipal Liquidity Facility;

(ii) exclusion of lenders and organizations looking to participate in the Main Street Lending Program;

(iii) limits to certain Paycheck Protection Program (PPP) lenders who wish to access the PPP Liquidity Facility; and

(iv) other improvements that should be made regarding the Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, and the Commercial Paper Funding Facility.

Federal Agencies

Department of the Treasury

COVID-19: Treasury Partners with Veterans Affairs to Deliver Automatic Economic Impact Payments to Veterans

April 17, 2020

The U.S. Department of the Treasury and the IRS announced that they are working directly with the U.S. Department of Veterans Affairs to ensure Veterans and their beneficiaries who receive Compensation and Pension benefit payments will receive their Economic Impact Payments automatically and without additional paperwork.

Federal Reserve Board

COVID-19: Federal Reserve Board Releases Working Paper on Social Distancing and Supply Disruptions in a Pandemic

April 17, 2020

Martin Bodenstein and Luca Guerrieri of the Federal Reserve Board, along with Giancarlo Corsetti of the University of Cambridge, published a working paper, “Social Distancing and Supply Disruptions in a Pandemic,” for the Federal Reserve Board’s Finance and Economics Discussion Series. The paper argues that the high peak of an infection not mitigated by social distancing may cause very large upfront economic costs in terms of output, consumption and investment and that social distancing measures can reduce these costs, especially if skewed towards non-core industries and occupations with tasks that can be performed from home.

Federal Reserve Bank of New York

COVID-19: Singh Delivers Remarks on the Fed’s Approach to Standing up Emergency Facilities

April 17, 2020

Executive Vice President of the Federal Reserve Bank of New York, Daleep Singh, delivered remarks before the Money Marketeers of New York University on the various policy actions launched by the Federal Reserve and its approach to standing up emergency facilities quickly and carefully.


European Commission

COVID-19: European Commission Welcomes Parliament's Rapid Approval of Proposed New Resources to Address the Pandemic

April 17, 2020

The European Commission (Commission) issued a press release welcoming the European Parliament’s (Parliament) voting on a number of Commission proposals to tackle the coronavirus crisis, including the following:

(i) redirection of cohesion policy funds to address the effects of the public health crisis (CRII+ Initiative);

(ii) providing an additional €3.08 billion of EU funds for healthcare (the Emergency Support Instrument) and emergency medical capacity (rescEU); and

(iii) providing additional funding for the European Centre for Disease Prevention and Control; and a number of other support measures.

The release notes that Parliament's green light follows the swift approval by EU Member States in the Council for the majority of these initiatives; the CRII+ Initiative and the postponing of the Medical Devices Regulation still require approval by the Council.

UK Financial Conduct Authority

COVID-19: FCA proposes help for motor finance and high cost credit customers

April 17, 2020

The Financial Conduct Authority (FCA) announced another proposed package of measures to support consumers facing payment difficulties due to coronavirus (Covid-19). The range of targeted temporary measures cover motor finance and high cost credit agreements, which include high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking. According to these measures, the FCA expects that payday lending firms provide a one-month pay freeze to struggling consumers, while those issuing motor finance, RTO, BNPL programs or pawnbroking are expected to provide three-month freezes.

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