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Daily Financial Regulation Update -- Friday, September 25, 2020

September 25, 2020

By FedACTion Task Force

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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. Senate

Committee on Banking, Housing, and Urban Affairs

Secretary Mnuchin and Chairman Powell Testify at Hearing on Quarterly CARES Act Report to Congress

September 24, 2020

Secretary of the Treasury Steven Mnuchin and Chairman of the Board of Governors of the Federal Reserve System Jerome Powell testified before the Committee on Banking, Housing, and Urban Affairs at a hearing on the Quarterly CARES Act Report to Congress. Secretary Mnuchin expressed his commitment to working with Congress to pass a Phase IV relief package, while Chairman Powell provided updates on the Main Street Lending Program.

Committee on Small Business and Entrepreneurship

Cardin, Coons & Delgado Introduce Legislation to Extend Small Business Debt Relief Program

September 24, 2020

U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Ben Cardin (D-MD), U.S. Senator Chris Coons (D-DE), and U.S. Representative Anthony Delgado (D-NY) introduced the Small Business Debt Relief Extension Act to extend debt relief for small businesses through at least February 2021 for all borrowers and further for those particularly hard-hit by the pandemic. The Bill seeks to address that hundreds of thousands of businesses will reach the end of emergency debt relief for Small Business Administration loans at the end of September.

U.S. House of Representatives

Committee on Financial Services

House Passes Ten Bipartisan Financial Services Bills

September 23, 2020

The U.S. House of Representatives passed ten financial services bills, including legislation to support diversity in community banking, protect investors and consumers from pandemic-related fraud, combat trafficking and promote more flexible CARES Act funding.

Committee on Small Business

Hearing Held to Improve SBA Technology Systems Hindering COVID-19 Relief Programs

September 24, 2020

The House Small Business Committee Subcommittee on Innovation and Workforce Development, under Chairman Jason Crow (D-CO), held a hearing examining how the Small Business Administration’s (SBA) legacy technology systems fared throughout the implementation of the Paycheck Protection Program (PPP). The hearing also covered recent issues surrounding the SBA’s release of PPP loan data and their new system for PPP forgiveness.

Federal Agencies

Federal Reserve Bank of New York

Federal Reserve Bank of York President Williams Delivers Speech on Building an Equitable Future

September 24, 2020

John C. Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York (New York Fed), delivered remarks at the Economic Inequality Policy Forum: “The Impacts of COVID-19 on Communities of Color and Policy Insights for an Equitable Economic Recovery.” Williams described finding solutions to economic disparities as a key area of focus of the New York Fed and introduced research by New York Fed analysts that highlight disparities for communities of color.

Federal Reserve Bank of New York Analysts Discuss the Official Sector’s Response to the Coronavirus Pandemic and Moral Hazard

September 24, 2020

As part of its Liberty Street Economics web series, the Federal Reserve Bank of New York released a blog post by two research analysts about the potential for moral hazard stemming from the official sector’s response to the coronavirus pandemic. The authors also explain why moral hazard concerns were likely more severe in 2008.

Federal Reserve Bank of Boston

Latest NE Payments Survey Shows Growth in Peer-to-Peer Services, Shifting Fraud Concerns

September 24, 2020

The Federal Reserve Bank of Boston released its 2019 Mobile Banking and Payment Survey of New England Financial Institutions, which found that more New England banks than ever are offering mobile peer-to-peer payment services. Few financial institutions are promoting contactless cards – though that could be changing in a time of COVID-19.

Federal Housing Finance Agency

FHFA Releases 2nd Quarter Foreclosure Prevention and Refinance Report for the Enterprises

September 24, 2020

The Federal Housing Finance Agency (FHFA) released its second quarter 2020 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac completed 252,014 foreclosure prevention actions in the second quarter of 2020, bringing to 4.68 million the number of troubled homeowners who have been helped during conservatorships. Of these actions, 3.98 million of the foreclosure prevention actions have helped troubled homeowners stay in their homes.

FHFA Further Extends Buying Loans in Forbearance & COVID-Related Loan Processing Flexibilities

September 24, 2020

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend buying qualified loans in forbearance and several loan origination flexibilities, originally scheduled to expire at the end of September, until October 31, 2020. The changes are to ensure continued support for borrowers during the COVID-19 national emergency.

Ginnie Mae

Ginnie Mae Issues Guidance on Notification Regarding Loans after Deferment Loss Mitigation

September 24, 2020

In response to Veterans Affairs Circular 26-20-33 “Deferment as a COVID-19 Loss Mitigation Option for CARES Act Forbearance Cases,” which clarifies the circumstances under which a deferment may be exercised as a loss mitigation option after a forbearance period, Ginnie Mae issued guidance reminding issuers that existing Mortgage Backed Securities Program requirements may impact the pooling eligibility of loans where a deferment is exercised as a loss mitigation option or as part of an informal workout agreement.

Department of Labor

DOL Releases Unemployment Insurance Weekly Claims Report Update

September 24, 2020

The Department of Labor released its Unemployment Insurance Weekly Claims Report Update, which found that in the week ending September 19, the advance figure for seasonally adjusted initial claims was 870,000, an increase of 4,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 860,000 to 866,000. The 4-week moving average was 878,250, a decrease of 35,250 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 912,000 to 913,500.

International

Bank of England

Bank of England Releases Further Updates to the TFSME to Reflect Changes to HMT’s Bounce Back Loans Scheme

September 24, 2020

In light of ongoing developments in the economy and the announcement of the Bounce Back Loans Scheme (BBLS), the Bank of England (Bank) announced further measures to ensure the Term Funding Scheme for Medium-sized Enterprises (TFSME) continues to deliver its objectives. In particular, the Bank announced that participants will be able to extend the term of TFSME loans by up to a further four years at the point at which existing six year TFSME loans mature. The amount of TFSME funding that can be extended will be capped at the amount of BBLS lending on TFSME participants’ balance sheets at that point in time.