PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update -- Saturday, September 19, 2020

September 19, 2020

FedACTion Task Force

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Major Developments

Federal Reserve Updates FAQs, Lender Instructions for Main Street Lending Program

September 18, 2020

The Board of Governors of the Federal Reserve System (Federal Reserve) updated the Frequently Asked Questions (FAQs) for the Main Street Lending Program (Program), to clarify the Federal Reserve’s and U.S. Department of the Treasury’s expectations regarding lender underwriting. The revised FAQs emphasize that lender underwriting should look back to borrowers’ pre-pandemic condition and forward to their post-pandemic prospects (FAQs F.3 and I.2). The FAQs also clarify supervisory expectations for lenders originating Program loans. Additionally, the FAQs for the Main Street New Loan Facility, Main Street Priority Loan Facility and Main Street Expanded Loan Facility (for-profit facilities), Nonprofit Organization New Loan Facility and Nonprofit Organization Expanded Loan Facility (nonprofit facilities), and Instructions for Lender Required Documentation were amended to provide clarity on a number of issues, including:

(i) providing guidance on completing and submitting Main Street legal documents, and entering data into the Portal, for multi-borrower loans (FAQs H.24, H.25, L.8, L.9, L.12, and M.5); and

(ii) clarifying the application of the direct loan restrictions on loans between Main Street borrowers and their owners, employees, and officers (FAQs H.20, H.21, H.22, and H.23).


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.

Federal Agencies

Federal Reserve Board

Federal Reserve Issues Report on Economic Well-Being of U.S. Households

September 18, 2020

The Board of Governors of the Federal Reserve System (Federal Reserve) issued its most recent Report on the Economic Well-Being of U.S. Households. The report draws from data collected to supplement the Federal Reserve’s seventh annual Survey of Household Economics and Decisionmaking, and shows that U.S. families were faring better financially in July than in April, but that many still faced uncertainty regarding layoffs and prospects for returning to work.

Recognizing the unprecedented financial disruptions caused by the COVID-19 pandemic, the Federal Reserve conducted a pair of supplemental surveys to monitor changes in the financial well-being of Americans. The first of these surveys was conducted in April, at the onset of the pandemic and before most financial relief efforts were in place. The second survey, conducted in July, demonstrated that 77% of adults said they were doing at least okay financially, up from 72% in early April, and 75% in October 2019; that people appeared better able to handle small financial emergencies than they were nine months prior in October 2019; but, that a larger share of laid-off workers expected layoffs to be permanent than in April.

Federal Reserve Bank of New York

Federal Reserve Bank of New York to Host Third Event in Series on Inequality

September 18, 2020

The Federal Reserve Bank of New York (FRBNY) will host via Webex a discussion entitled, “The Impacts of COVID-19 on Communities of Color and Policy Insights for an Equitable Economic Recovery”, the third event in a series of discussions on inequality, on September 24, 2020 from 2:00-3:30 p.m., Eastern.

The event will highlight the FRBNY’s recent research, and will look at the impact of COVID-19 on communities of color. The event follows a forum in June, “An Update from the Experts: COVID-19’s Impact on Housing,” which highlighted research on the housing market and included conversations with policy-influencers on the impact of the pandemic on homeowners and renters. The event will also feature community development leaders and policy-influencers who will discuss insights for an equitable economic recovery focused on credit markets, the racial wealth gap and workforce equity.

Federal Reserve Bank of New York Releases Monthly U.S. Economy Snapshot

September 18, 2020

The Federal Reserve Bank of New York released its U.S. Economy in a Snapshot presentation (Snapshot) for September 2020. The findings of the latest Snapshot include that consumer spending continued to recover in July, spending remained tilted toward goods and away from services compared to pre-pandemic levels, services expenditures were still significantly below their February level and consumer confidence remained low in August.

Federal Reserve Bank of New York Publishes Blog Post on Relationship between State Reopenings, Consumer Spending

September 18, 2020

The Federal Reserve Bank of New York published a Liberty Street Economics blog post (Post) entitled, “Did State Reopenings Increase Consumer Spending?”. In the Post, the authors investigate how much consumer spending increased after the gradual loosening of COVID-19-related restrictions beginning in April, but do not assess whether or how states should loosen or tighten restrictions.

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