PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update -- Friday, August 21, 2020
August 21, 2020
FedACTion Task Force
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Congress
Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), Enacted March 27, 2020.
Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.
Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.
Click here to view 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 Seek Answers Regarding Fannie Mae and Freddie Mac’s Decisions to Increase Mortgage Refinancing Costs for Homeowners during the COVID-19 Economic Downturn
August 20, 2020
In a letter to Mark Calabria, Director of the Federal Housing Finance Agency, U.S. Senator Sherrod Brown (D-OH), Ranking Member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and 15 Senate Democrats expressed concerns and requested answers regarding the announcement that Fannie Mae and Freddie Mac will begin charging an additional 50 basis points in up-front fees for all refinance loans delivered to such entities on or after September 1, 2020.
Federal Agencies
Federal Reserve Bank of New York
Market Function Purchases by the Federal Reserve
August 20, 2020
The Federal Reserve Bank of New York’s Liberty Street Economics blog released a post discussing market function purchases by the Federal Reserve. In mid-March, the Federal Reserve began an asset purchase program designed to improve market functioning in U.S. Treasury and agency mortgage-backed securities markets. Although the 2020 purchases have no parallel, the authors recap several instances of large System Open Market Account purchases that were undertaken to support U.S. Treasury market functioning in earlier decades--once in 1939 at the start of World War II, a second in 1958 in connection with a poorly received U.S. Treasury financing, and a third in 1970, also in connection with a poorly received U.S. Treasury financing.
Federal Deposit Insurance Corporation
FDIC Issues Financial Institution Letter Announcing PPP Loan Forgiveness Webinar
August 20, 2020
The Federal Deposit Insurance Corporation (FDIC) released a Financial Institution Letter announcing that the FDIC, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the National Credit Union Administration, as well as the Conference of State Bank Supervisors will host a webinar for bankers on August 27, 2020 beginning at 11:00 a.m., Eastern, to discuss the loan forgiveness process and recent changes in the Paycheck Protection Program. Participants must pre-register at the link below.
Department of Labor
DOL Releases Unemployment Insurance Weekly Claims Report Update
August 20, 2020
The U.S. Department of Labor’s Unemployment Insurance Weekly Claims Report found that in the week ending August 15, 2020, the advance figure for seasonally adjusted initial claims was 1,106,000, an increase of 135,000 from the previous week’s revised level. The previous week’s level was revised up by 8,000 from 963,000 to 971,000. The 4-week moving average was 1,175,750, a decrease of 79,000 from the previous week’s revised average. The previous week’s average was revised up by 2,000 from 1,252,750 to 1,254,750.
International
Bank of England
Reduction in US Dollar Liquidity-Providing Operations Commencing September 1, 2020
August 20, 2020
In view of continuing improvements in U.S. dollar funding conditions and the low demand at recent 7-day maturity U.S. dollar liquidity-providing operations, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to further reduce the frequency of their 7-day operations from three times per week to once per week. The operational change will be effective as of September 1, 2020. At the same time, such central banks will continue to hold weekly operations with an 84-day maturity.