PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Monday, April 13, 2020

April 14, 2020

FedACTion Task Force

PH Client Alerts

Click here to read more from our Coronavirus series.

Major Developments

COVID-19: Treasury Updates Paycheck Protection Program Frequently Asked Questions (FAQ) with Additional Guidance

April 13, 2020

The U.S. Department of the Treasury and Small Business Administration updated their FAQ for the Paycheck Protection Program (PPP), providing additional guidance confirming:

(i) there is no need for a separate SBA Authorization for the SBA to guarantee a PPP loan (FAQ 21);

(ii) lenders may include in their own promissory notes any terms and conditions, including related to amortization and disclosure, that are not inconsistent with Sections 1102 and 1106 of the CARES Act, the PPP Interim Final Rule and guidance, and SBA Form 2484 (FAQ 21);

(iii) that non-bank lenders, including fintechs, were encouraged to apply to the SBA to make PPP loans and mapping out the process to do so (FAQ 22);

(iv) how the SBA’s affiliation rules apply under the CARES Act to franchises, hotels and restaurants(FAQ 23 and 24); and

(v) that information lenders must collect from PPP applicants regarding every owner who has a 20% or greater ownership interest can satisfy the lender’s information collection obligation under the Bank Secrecy Act for new and existing customers (FAQ 25).

COVID-19: The New York Fed has released updated Frequently Asked Questions (FAQ) for the Commercial Paper Funding Facility

April 13, 2020

The Federal Reserve Bank of New York updated its FAQ for the Commercial Paper Funding Facility (CPFF) to confirm that an issuer of asset-backed commercial paper (ABCP) that was established between March 16, 2019 and March 16, 2020 is considered inactive if it did not issue ABCP to institutions other than the sponsoring institution for any consecutive period of three months or longer between the date of its establishment and March 16, 2020. The guidance also indicates that an issuer will be required to certify that it is unable to secure adequate credit accommodations from other banking institutions, and clarifies that issuers may consider economic or market conditions in the market intended to be addressed by the CPFF when certifying whether the issuer is unable to secure adequate credit accommodations elsewhere. Finally, the guidance confirms that the Federal Reserve may disclose information regarding the CPFF, including information regarding participants, costs, revenues and other fees.


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 Affairs, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.

Federal Agencies

Department of Treasury

COVID-19: Over 80 Million Americans Will Receive Economic Impact Payments in their Bank Accounts This Week

April 13, 2020

The U.S. Department of the Treasury and Internal Revenue Service (IRS) confirmed eligible Americans will receive Economic Impact Payments by Wednesday, April 15, via direct deposit to accounts used in 2018 or 2019 federal tax returns. The IRS also intends to promptly launch a separate online application, “Get My Payment,” which allows taxpayers who filed their tax return in 2018 or 2019 but did not provide their banking information on their federal tax return to submit direct deposit information so they can receive payments. Physical checks will be mailed to the remaining eligible recipients.

COVID-19: Treasury Launches Web Portal and Begins Disbursement of CARES Act Funding to State, Local, and Tribal Governments

April 13, 2020

The U.S. Department of the Treasury launched a web portal to allow eligible State, local, and tribal governments to receive payments to help offset the costs of their response to the coronavirus pandemic. Once registered through this portal, States, territories, and the District of Columbia will receive promptly half of the funds allocated to them pursuant to the CARES Act. The remaining balance of the payment amounts due to States, eligible local governments, and tribal governments will be paid no later than April 24, 2020.

Securities and Exchange Commission

COVID-19: SEC Updates Investor Alert on Frauds Targeting Main Street Investors

April 13, 2020

The Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) and Retail Strategy Task Force updated an alert to educate Main Street investors about current investment frauds, including scams related to the coronavirus pandemic.

Consumer Financial Protection Bureau

COVID-19: CFPB Issues Interpretive Rule on the Treatment of Pandemic Relief Payments Under Regulation E of the Electronic Fund Transfer Act

April 13, 2020

To expedite the process of getting relief payments to consumers, the Consumer Financial Protection Bureau issued a rule concluding that certain pandemic-relief payments are not “government benefits” for purposes of Regulation E, the implementing regulation of the Electronic Fund Transfer Act (EFTA). Under Regulation E and the EFTA, government agencies are prohibited from requiring consumers to establish accounts for receipt of electronic fund transfers with a particular financial institution as a condition of receipt of a government benefit (known as the compulsory use prohibition). By excluding certain pandemic-related payments from the definition of “government benefits”, the compulsory use prohibition does not apply and, as a result, a “government agency (as well as persons acting on behalf of a government agency) may require consumers to establish an account with a particular financial institution as a condition of receiving pandemic relief payments. . . .”

Financial Crimes Enforcement Network

COVID-19: FinCEN Updates Frequently Asked Questions (FAQ) on the Paycheck Protection Program

April 13, 2020

The Financial Crimes Enforcement Network (FinCEN) republished the U.S. Department of the Treasury and Small Business Administration FAQ on the Paycheck Protection Program (PPP). Certain FAQ describe the requirements under the Bank Secrecy Act (BSA) and how lenders can meet those requirements when issuing a PPP loan. As the administrator of the BSA, FinCEN will update the FAQ document with any additional BSA-related FAQ involving the PPP.

National Credit Union Association

COVID-19: NCUA Increases Funding for COVID-19 Emergency Response Grants

April 13, 2020

The National Credit Union Administration (NCUA) announced that it is committing the majority of the 2020 Community Development Revolving Loan Fund appropriation for COVID-19 assistance. Specifically, the NCUA is committing $1,375,000 for grants to eligible low-income credit unions, an increase of $575,000 from the $800,000 originally announced on March 31, 2020. This funding will supplant the traditional Community Development Revolving Loan Fund grant categories. The agency will make funding available for its minority depository institutions mentoring program later this year. Eligible credit unions have until May 22, 2020 to apply for the COVID-19 emergency response grants through the NCUA’s CyberGrants portal.

COVID-19: NCUA Board Approves Changes to Central Liquidity Facility

April 13, 2020

The National Credit Union Administration Board approved an interim final rule that enhances the ability of the Central Liquidity Facility to serve as liquidity backstop to the nation’s credit union system. The interim final rule supplements the legislative changes resulting from the CARES Act and makes it easier for credit unions to join the facility as a regular member or through a corporate credit union as part of an agent relationship.

Department of Housing and Urban Development/Federal Housing Administration

COVID-19: HUD Implements New Cares Act Multifamily Mortgage Payment Relief To Maintain And Preserve Affordable Rental Housing

April 13, 2020

The U.S. Department of Housing and Urban Development (HUD) announced it is issuing new mortgage payment relief guidance under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) for borrowers with multifamily mortgages insured by the Federal Housing Administration (FHA) or borrowers participating in other HUD Multifamily housing programs. Servicers must grant Multifamily borrowers experiencing financial hardships as a result of COVID-19 up to 90 days of forbearance when the borrower requests assistance. Servicers can grant this forbearance without direct HUD approval if they follow the protocol in HUD’s guidance. Additionally, FHA announced that, as required by the CARES Act, all owners/agents of FHA-insured Multifamily properties and properties participating in HUD Multifamily assisted housing programs must cease evictions of tenants for non-payment of rent for 120 days.

Freddie Mac

COVID-19: Freddie Mac Quarterly Forecast: The Housing Market Faces Challenges Amid Economic Uncertainty

April 13, 2020

According to Freddie Mac’s Quarterly Forecast, housing markets will deviate from their typical spring surge with both home sales and house prices falling due to the COVID-19 pandemic.

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