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Daily Financial Regulation Update - Friday, June 12, 2020

June 12, 2020

By FedACTion Task Force

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Major Developments

SBA Issues a new Interim Final Rule Revising First Interim Final Rule for PPP

June 11, 2020

The U.S. Small Business Administration issued a new Interim Final Rule for the Paycheck Protection Program (PPP) revising key provisions of its April 2, 2020 Interim Final Rule to conform to the Paycheck Protection Program Flexibility Act of 2020. The new Interim Final Rule amends the covered period for PPP loans, revises the loan maturity date for new PPP loans, extends the deferral period for loan payments, extends the loan forgiveness time frame and reduces to 60% the amount of loan proceeds that must be used for payroll costs.

Congress

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

to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.

to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.

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 Probes Issues within EIDL Program

June 10, 2020

House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) gathered small business owners to examine issues within the U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. In response to COVID-19, Congress expanded the EIDL program to provide relief for small businesses, and appropriated billions of dollars for additional loans and grants within the program. The virtual hearing featured EIDL applicants, who testified on their experiences accessing the EIDL program and the issues they faced throughout the application process.

Federal Agencies

Conference of State Bank Supervisors

State Regulators to Address Post-Crisis Economic Recovery and Financial Infrastructure

June 11, 2020

State financial regulators created a COVID-19 Recovery Steering Group to guide multistate efforts to respond to the personal hardships and financial infrastructure risks caused by the global pandemic. The group, led by Texas Banking Commissioner Charles G. Cooper, will work through the Conference of State Bank Supervisors, and will consider changes to bank and nonbank financial services oversight, and share lessons learned and best practices with fellow regulators and the financial services industry.

Securities and Exchange Commission

SEC’s New York Regional Office to Host Educational Call for Investors

June 11, 2020

On June 23, 2020, from 5:00 to 6:00 p.m. Eastern, the U.S. Securities and Exchange Commission’s (SEC) New York Regional Office will host an educational telephone town hall about avoiding scams related to COVID-19. Marc P. Berger, Director of the SEC’s New York Regional Office, will moderate the event. Speakers at the event will include Craig Carpenito, U.S. Attorney for the District of New Jersey, and Gerri Walsh, President of the Financial Industry Regulatory Authority Foundation.

Federal Housing Finance Agency

FHFA Extends COVID-Related Loan Processing Flexibilities through July

June 11, 2020

The Federal Housing Finance Agency (FHFA) is extending until at least July 31 several loan origination flexibilities, offered by Fannie Mae and Freddie Mac, designed to assist borrowers during COVID-19. The extended flexibilities include:

(i) Alternative appraisals on purchase and rate term refinance loans;

(ii) Alternative methods for verifying employment before loan closing;

(iii) Expanded use of power of attorney and remote online notarizations to assist with loan closings; and

(iv) Authority to purchase mortgages in forbearance.

Department of Labor

Department of Labor Issues Unemployment Insurance Weekly Claims Report

June 11, 2020

The U.S. Department of Labor issued its Unemployment Insurance Weekly Claims report for the week ending June 6, 2020. According to the report, the advance figure for seasonally adjusted initial claims was 1,542,000, a decrease of 355,000 from the previous week’s revised level; the previous week’s level was revised up by 20,000 from 1,877,000 to 1,897,000; the 4-week moving average was 2,002,000, a decrease of 286,250 from the previous week’s revised average; and, the previous week’s average was revised up by 4,250 from 2,284,000 to 2,288,250.

International

European Commission

EIB to Provide BioNTech up to €100 million in Debt Financing for Vaccine Development, Manufacturing

June 11, 2020

The European Investment Bank (EIB) and BioNTech concluded a €100 million debt financing agreement to support the development of BNT162, the company’s COVID-19 vaccine program. The deal will also allow BioNTech to expand its manufacturing capacity in order to quickly supply the vaccine worldwide. BioNTech was the first European company to enter clinical testing, having started a clinical trial in Germany in April, 2020 and a further clinical trial in the United States at the beginning of May, 2020. The EIB’s debt investment will be disbursed in two tranches of €50 million each, following completion of pre-defined milestones. The EIB’s investment is backed by the European Fund for Strategic Investments, the financial heart of the Investment Plan for Europe, in which the EIB and the European Commission partner to kick off investment for EU priority projects.

UK Financial Conduct Authority

FCA Issues Statement on Open Access Regime for Trading, Clearing of Exchange-Traded Derivatives

June 11, 2020

The UK Financial Conduct Authority (FCA) issued a statement on the open access regime for the trading and clearing of exchange-traded derivatives. According to the statement, beginning on July 4, 2020, trading venues and central counterparties (CCPs) offering the trading and clearing of exchange-traded derivatives will be subject to the open access regime set out in articles 35 and 36 of the Markets in Financial Instruments Regulation. Under those provisions, trading venues and CCPs may only deny access where the operational risk and complexity arising from granting access would cause undue risk. The statement notes the FCA supports the approach set out in the European Securities and Markets Authority’s (ESMA) June 11, 2020 statement, in which ESMA recommends relevant competent authorities consider the risks raised by COVID-19 in relation to open access for exchange-traded derivatives.