PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Friday, April 3, 2020
April 04, 2020
FedACTion Task Force
Major Developments
COVID-19: SBA Officially Launches Paycheck Protection Program for Small Businesses Affected by the Coronavirus Pandemic
April 3, 2020
The U.S. Small Business Administration Administrator Jovita Carranza launched the Paycheck Protection Program, a $349 billion emergency loan program created in connection with the Coronavirus Aid, Relief, and Economic Security Act (CARES). The program provides forgivable loans up to $10 million to small businesses left financially distressed by the Coronavirus (COVID-19) pandemic. The loans, which will be administered at the local level by a national network of banks and credit unions, are designed to maintain the viability of small businesses struggling to meet payroll and day-to-day operating expenses.
COVID-19: Federal agencies issue policy statement outlining regulatory flexibility for mortgage servicers working with struggling homeowners affected by COVID-19
April 3, 2020
The Board of Governors of the Federal Reserve System, Conference of State Bank Supervisors, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency issued a joint policy statement providing regulatory flexibility to mortgage servicers offering short-term forbearance or repayment plans to homeowners impacted by the COVID-19 crisis. The policy statement clarifies that the agencies do not intend to take supervisory or enforcement action against mortgage servicers for delays in sending certain early intervention and loss mitigation notices and taking certain actions relating to loss mitigation set out in the mortgage servicing rules.
COVID-19: U.S. Department Of Labor Announces New Cares Act Guidance On Unemployment Insurance For States In Response To Covid-19 Crisis
April 2, 2020
The U.S. Department of Labor today announced the publication of Unemployment Insurance Program Letter 14-20 (UIPL) outlining relevant provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act related to the administration of and eligibility criteria for state unemployment insurance (UI) programs. The programs include Pandemic Unemployment Assistance (PUA) for those not typically eligible for UI, such as gig workers, as well as expanded UI benefits.
Congress
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 Development, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.
Federal Agencies
Securities and Exchange Commission
COVID-19: Commissioner Allison Harren Lee Issues Statement on Regulatory Priorities and COVID-19
April 3, 2020
Commissioner Allison Harren Lee issued a statement highlighting two considerations that she believes should inform the regulatory approach of the Securities and Exchange Commission in the current climate. According to the statement, the SEC should move to extend current and recently closed comment periods to ensure that the public has an adequate opportunity to provide full and complete. In addition, the SEC should proceed with great caution in considering whether to take regulatory action outside of that called for by the public health crisis and its ramifications for the public, investors, markets, and the economy.
COVID-19: Chief Accountant Sagar Teotia Issues Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19
April 3, 2020
Chief Accountant Sagar Teotia issued a statement detailing how the Office of the Chief Accountant is interfacing with the Commission and other Divisions and Offices of the Securities and Exchange Commission to monitor the impact of issues raised by the coronavirus on investors and global capital markets.
Consumer Financial Protection Bureau
COVID-19: Consumer Financial Protection Bureau Releases Video on How Mortgage Forbearance Works Under CARES Act
April 3, 2020
The Consumer Financial Protection Bureau (Bureau) released a video on how struggling homeowners can obtain mortgage forbearance if their finances are impacted due to the COVID-19 pandemic. The Bureau also issued additional information for consumers on mortgage and student loan payment relief and how to avoid scams.
VIDEO: CARES Act Mortgage Forbearance: What You Need to Know
What you need to know about student loans and the coronavirus pandemic
Financial Crimes Enforcement Network
COVID-19: The Financial Crimes Enforcement Network Provides Further Information to Financial Institutions in Response to the Coronavirus Disease 2019 (COVID-19) Pandemic
April 3, 2020
The Financial Crimes Enforcement Network’s (FinCEN’s) issued a notice updating its prior guidance from March 16, 2020 in response to COVID-19. The updated notice provides additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the COVID-19 pandemic, and announces a direct contact mechanism for urgent COVID-19-related issues.
FINRA
FINRA Delays Effectiveness of Rule Regarding Treasuries Executed to Hedge Primary Market Transactions
April 3, 2020
As described in a December 2019 TRACE Technical Notice, beginning June 1, 2020, members would be required to report transactions in U.S. Treasury Securities executed to hedge a List or Fixed Offering Price Transaction or a Takedown Transaction (as defined in FINRA Rule 6710) with an appropriate identifier. Due to current market conditions FINRA is delaying the effectiveness of the rule until Monday, August 3, 2020. The testing for the change will operate as follows: From Monday, June 1, 2020, through Friday, July 31, 2020, members may conduct testing for the upcoming change. The testing will be available through the NASDAQ Testing Facility (NTF).
Department of Housing and Urban Development/Federal Housing Administration
COVID-19: HUD Makes $200 Million of COVID-19 Relief Funding Available To Help Native American Communities Across The Nation
April 3, 2020
U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced $200 million in Indian Housing Block Grants (IHBG) to American Indian Tribes and Tribally Designated Housing Entities (TDHEs) across the country to respond to COVID-19. IHBGs primarily benefit low-income American Indian families. The amount of each grant is based on a formula that considers local needs and housing units under management by the Tribe or TDHE. Eligible activities for the funds include housing development, operation and maintenance, modernization of existing housing, housing services to eligible families and individuals, housing management services, and crime prevention and safety activities.
Department of Labor
COVID-19: U.S. Department Of Labor Announces Additional Guidance Following Paid Sick Leave And Expanded Family And Medical Leave Implementation
April 3, 2020
The U.S. Department of Labor announced additional guidance to provide information to workers and employers about how each can take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA), which went into effect April 1, 2020. The guidance includes a comprehensive webinar explaining which employers are covered by the new law, which workers are eligible, and what benefits and protections the law provides. The Wage and Hour Division (WHD) also added additional Questions and Answers to its website in response to the questions most frequently received to-date through its extensive stakeholder engagement.
COVID-19 and the Family and Medical Leave Act: Questions and Answers
COVID-19 and the Fair Labor Standards Act: Questions and Answers
Webinar: The Families First Coronavirus Response Act (FFCRA)
Occupational Safety and Health Administration
COVID-19: U.S. Department Of Labor Issues Guidance For Respiratory Protection During N95 Shortage Due To Covid-19 Pandemic
April 3, 2020
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) issued interim enforcement guidance to help combat supply shortages of disposable N95 filtering face piece respirators (N95 FFRs). According to the guidance, employers should reassess their engineering controls, work practices and administrative controls to identify any changes they can make to decrease the need for N95 respirators. If respiratory protection must be used, employers may consider use of alternative classes of respirators that provide equal or greater protection compared to an N95 FFR, such as National Institute for Occupational Safety and Health (NIOSH)-approved, non-disposable, elastomeric respirators or powered, air-purifying respirators.
International
European Commission
COVID-19: Commission waives customs duties and VAT on the import of medical equipment from non-EU countries
April 3, 2020
The European Commission decided to approve requests from Member States and the UK to temporarily waive customs duties and VAT on the import of medical devices, and protective equipment, from third countries in order to help in the fight against coronavirus.
COVID-19: State aid: Commission extends Temporary Framework to enable Member States to accelerate research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the coronavirus outbreak
April 3, 2020
The European Commission adopted an amendment to its Temporary Framework for state aid measures to support the economy during COVID-19, originally adopted on March 19, 2020. The amendment extends the Temporary Framework by enabling Member States to accelerate the research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the context of the outbreak.
COVID-19: Commission postpones application of the Medical Devices Regulation to prioritize the fight against coronavirus
April 3, 2020
The European Commission adopted a proposal to postpone by one year the date of application of the Medical Devices Regulation to allow Member States, health institutions and economic operators to prioritize the fight against the coronavirus pandemic.
Bank of England Prudential Regulation Authority
COVID-19: PRA and FCA Issue Statement on ‘Senior Managers and Certification Regime and Coronavirus
April 3, 2020
The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) issued a joint statement that sets out their approach to the Senior Managers and Certification Regime (SM&CR) for dual-regulated firms in light of the Coronavirus (Covid-19) outbreak. Under normal circumstances, the FCA’s and PRA’s rules allow individuals to perform Senior Management Functions (SMFs) without approval for up to 12 weeks in a consecutive one-year period if their firm experiences an SMF vacancy that is (a) temporary; and/or (b) reasonably unforeseen. According to the statement, the FCA and PRA are currently gathering evidence on whether the 12-week rule is likely to give dual-regulated firms enough flexibility to deal with temporary absences of SMF as a result of coronavirus.
UK Financial Conduct Authority
COVID-19: FCA Issues Statement on Expectations Relating to Senior Managers and Certification Regime (SM&CR) and Coronavirus (Covid-19)
April 3, 2020
The Financial Conduct Authority (FCA) issued a statement regarding its expectations related to the Senior Managers and Certification Regime (SM&CR) in light of issues arising from the Coronavirus. According to the statement, the FCA does not intend to enforce the requirement on firms to submit updated Statements of Responsibilities (SoRs) if the change is made to cover multiple sicknesses, or other temporary changes in responsibilities in direct response to the pandemic, and is temporary and expected to revert to the firm’s previous arrangements. In addition, the FCA intends to issue a Modification by Consent to the 12-week rule relating to temporary substitutions for Senior Managers. According to the statement, if temporary arrangements last longer than 12-weeks as a result of the crisis, firms can notify the FCA that they consent to a modification of the 12-week rule. In such cases, temporary arrangements can be extended up to 36 weeks.