PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Friday, May 22, 2020
May 22, 2020
FedACTion Task Force
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Major Developments
May 21, 2020
Federal Reserve Bank of Boston to Hold Main Street Lending Program Drop-in Sessions starting on May 22, 2020
The Federal Reserve Bank of Boston is offering drop-in sessions to learn about the Main Street Lending Programs:
SBA Releases Interim Final Rule Providing for a Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan and Extending the Deadline for Lender Reporting
May 20, 2020
The Small Business Administration (SBA) issued another Interim Final Rule that revises an Interim Final Rule released on May 8, 2020 (May 8 Rule), by extending once again the date by which certain Paycheck Protection Program (PPP) borrowers may repay their loans to May 18, 2020, in order to avail themselves of a safe harbor with respect to the certification required by the CARES Act (“that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing obligations” of the applicant). The new Interim Final Rule also revises the May 8 Rule by extending the timeframe for submission of the initial SBA Form 1502 report for PPP loans, such that lenders must electronically upload SBA Form 1502 reporting information by the later of: (i) May 29, 2020 or (ii) 10 calendar days after disbursement or cancellation of a PPP loan.
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 the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 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 Small Business and Entrepreneurship
Chairman Rubio Joins Bipartisan Bill to Prevent Flagship 7(a) SBA Small Business Loan Program From Shutting Down
May 21, 2020
U.S. Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, joined Senators Tammy Duckworth (D-IL), Chris Coons (D-DE), and James Risch (R-ID) in introducing the Small Business Lending Continuity Act of 2020 to prevent the Small Business Administration’s (SBA) flagship Section 7(a) loan program from shutting down. The bill would fix an error in the CARES Actthat inadvertently results in the SBA’s flagship 7(a) Loan Guarantee Program shutting down whenever the Paycheck Protection Program (PPP) runs out of funding. If left uncorrected, the SBA’s 7(a) Loan Guarantee Program’s Fiscal Year 2020 $30 billion authorization cap would be void until July 1, 2020. The Section 7(a) loan program runs the risk of shutting down if PPP distributes its authorized revised cap of $310 billion. The bill passed the Senate by unanimous consent on May 20, 2020 and now goes to the House of Representatives for consideration.
Federal Agencies
Federal Reserve Board
Fed Listens: How is COVID-19 Affecting Your Community?
May 21, 2020
The Board of Governors of the Federal Reserve System (Board) hosted a Fed Listens event in a virtual format as part of its ongoing review of monetary policy strategy, tools, and communication practices. In light of the rapidly changing public health and economic environments, the Board convened the event to follow up with leaders from a range of organizations, including unions, small businesses, low- and moderate-income communities, retirees, and others, regarding how COVID-19 is affecting communities across the country.
U.S. Economic Outlook and Monetary Policy
May 21, 2020
Richard H. Clarida, Vice Chair of the Board of Governors of the Federal Reserve System (Board), gave a webcast speech at the New York Association for Business Economics, on the current economic situation and outlook in light of COVID-19, and the Board’s response to the COVID-19 pandemic.
Federal Reserve Bank of New York
Too Important to Fail: Minority-Owned Businesses Navigating COVID-19 and Beyond
May 21, 2020
On May 27, 2020, the Federal Reserve Bank of New York (FRBNY) will host a virtual forum on the COVID-19 pandemic’s impact on small businesses and how community stakeholders and capital providers can support such firms. The event is the second installment of the FRBNY’s Fed and Main Street series. The event is open to the public.
The Economy in the Time of Coronavirus
May 21, 2020
John C. Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, gave videoconference remarks at the Buffalo Niagara Partnership, the Greater Rochester Chamber of Commerce, and CenterState CEO on the economy in the time of coronavirus.
What Do Financial Conditions Tell Us about Risks to GDP Growth?
May 21, 2020
The Federal Reserve Bank of New York released findings on what financial conditions indicate about risks to GDP group. Results of the findings highlight that although there are significant differences between the economic fallout from the COVID-19 pandemic and the global financial crisis in 2008—one originating from the real economy and the other originating from the financial sector—there are important similarities, with implications for the economic recovery.
Securities and Exchange Commission
SEC Issues Agenda for Upcoming Meeting of the Asset Management Advisory Committee
May 21, 2020
The Securities and Exchange Commission released the agenda for the May 27, 2020 meeting of the Asset Management Advisory Committee (AMAC). The meeting will include a discussion of matters relating to AMAC’s subcommittees and to COVID-19 and the asset management industry. The remote meeting is open to the public and will be webcast on SEC.gov.
Consumer Financial Protection Bureau
Consumer Financial Protection Bureau Issues Consumer Complaint Bulletin
May 21, 2020
The Consumer Financial Protection Bureau (CFPB) issued a report analyzing the complaints received during the COVID-19 pandemic. The report shows that mortgage and credit card complaints top the list of complaints the CFPB has received that mention coronavirus or related terms. In April and May 2020, the CFPB received historically higher complaints; however, complaints mentioning COVID-related terms amounted to a total of 4,500 complaints during those two months.
Department of Labor
Unemployment Insurance Weekly Claims During COVID-19
May 21, 2020
In a News Release regarding unemployment insurance weekly claims, the U.S. Department of Labor reported that in the week ending May 16, 2020, the advance figure for seasonally adjusted initial claims was 2,438,000, a decrease of 249,000 from the previous week’s revised level; the previous week’s level was revised down by 294,000, from 2,981,000 to 2,687,000; the four-week moving average was 3,042,000, a decrease of 501,000 from the previous week’s revised average; and, the previous week’s average was revised down by 73,500, from 3,616,500 to 3,543,000.
International
Bank of England
How the BoE is Monitoring the Economy during the Covid-19 Pandemic
May 21, 2020
The Bank of England (BoE) released a post describing how it is monitoring the economy during the COVID-19 pandemic. The BoE has been using a wider range of indicators than usual to help monitor the economy recently, including timely data on spending, travel and internet searches. Those indicators point to a very sharp reduction in economic activity since March 2020.