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Daily Financial Regulation Update - Thursday, April 16, 2020

April 17, 2020

By FedACTion Task Force

PH Client Alerts

to read more from our Coronavirus series.

Major Developments

Small Business Administration

April 16, 2020

COVID-19: Small Business Administration Notice: Lapse in Appropriations for Paycheck Protection Program.

The Small Business Administration (SBA) announced that it is currently unable to accept new applications for the Paycheck Protection Program, as it allocated all of the appropriated funds.

Congress

to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), 116 HR. 748, Enacted March 27, 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.

Federal Agencies

Department of Treasury

COVID-19: Statement by Secretary Mnuchin and Administrator Carranza on the Paycheck Protection Program and Economic Injury Disaster Loan Program (Regarding Availability of Funds)

April 15, 2020

U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration Administrator Jovita Carranza issued a statement regarding the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program. The letter urges Congress to provide additional funds for the PPP.

Federal Reserve Board

COVID-19: Federal Reserve announces its Paycheck Protection Program Liquidity Facility is fully operational and available to provide liquidity to eligible financial institutions

April 16, 2020

The Federal Reserve announced that its Paycheck Protection Program Liquidity Facility is fully operational and available to provide liquidity to eligible financial institutions.

COVID-19: Federal Reserve Releases Two Reports To Congress on the Main Street Loan Facilities Related to COVID-19

April 16, 2020

The Federal Reserve Board has released two reports to Congress pursuant to Section 13(3) of the Federal Reserve Act regarding the Main Street New Loan Facility and Main Street Expanded Loan Facility. On April 8, 2020, the Board of Governors of the Federal Reserve System (the Board), with the approval of the Secretary of the Treasury, authorized the establishment and operation of the Main Street New Loan Facility (MSNLF) under Section 13(3) of the Federal Reserve Act. The MSNLF is intended to facilitate lending to small and medium-sized businesses. Under the MSNLF and the Main Street Expanded Loan Facility (MSELF), the Federal Reserve Bank of Boston (Reserve Bank) will commit to lend on a recourse basis to a single common special purpose vehicle (SPV). The SPV will purchase 95% participations in eligible loans from eligible lenders. Eligible lenders would retain 5% of each eligible loan.

COVID-19: Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment

April 16, 2020

The Federal Reserve’s Divisions of Research & Statistics and Monetary Affairs published a paper tracking the effects of the COVID-19 pandemic on the U.S. labor market. According to the paper, cumulative losses in paid employment through April 4, 2020 are currently estimated at 18 million. The most affected sector is leisure and hospitality, which has so far lost or furloughed about 30% of employment, or roughly 4 million jobs. During the two weeks between March 14, 2020 and March 28, 2020, the U.S. economy lost about 13 million paid jobs. For comparison, during the entire Great Recession, less than 9 million private payroll employment jobs were lost.

Federal Reserve Bank of New York

COVID-19: President and CEO of the Federal Reserve Bank of New York Delivers Remarks at Economic Club of New York: A Time for Bold Action

April 16, 2020

The outbreak of the coronavirus and the global pandemic have created an unprecedented situation. The President and CEO of the Federal Reserve Bank of New York, John C. Williams, discusses what that means for the economy and financial markets, and how the Federal Reserve Bank of New York, and the Federal Reserve System as a whole, are responding to the challenges. He notes that he and his colleagues are dedicated to doing everything within their power to support the functioning of financial markets and help put the economy on a strong footing once this crisis is over.

Federal Deposit Insurance Corporation

COVID-19: Federal Deposit Insurance Corporation and the National Credit Union Administration Joint Webinar: Your Money is Safe at A Federally Insured Financial Institution

April 16, 2020

The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) hosted a joint webinar on insured financial institutions. The webinar covered deposit insurance and FDIC-insured banks and savings associations, share insurance at NCUA-insured credit unions, and various financial education resources.

COVID-19: Banker Webinar: Revised Statement on Loan Modifications and Reporting for Institutions Working with Customers Affected by the Coronavirus

April 16, 2020

The Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve, Office of the Comptroller of the Currency, and National Credit Union Administration will host a webinar for bankers on Friday, April 24, 2020, from 3:00 to 4:00 p.m. Eastern Daylight Time (EDT) to discuss the revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. The webinar will address accounting and regulatory reporting questions and clarify the interaction between current accounting principles and Section 4013 of the CARES Act.

FINRA

National Credit Union Association

COVID-19: NCUA Board Approves Regulatory Relief Measures in Response to COVID-19

April 16, 2020

The National Credit Union Administration (NCUA) Board held its third open meeting of 2020 using a live audio webcast and approved three items:

  • A temporary final rule granting measures of regulatory relief to help ensure that federally insured credit unions remain operational and liquid during the COVID-19 pandemic.

  • An interim final rule that temporarily defers real estate-related appraisals and evaluations under the agency’s appraisal regulations because the public health crisis and social distancing directives have created difficulties for lenders to obtain required appraisals on a timely basis.

  • A final rule that increases the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.

Additionally, staff from the Office of Examination and Insurance briefed the NCUA Board on regulatory changes to the Central Liquidity Facility that were approved on April 13.

U.S. Small Business Association

COVID-19: SBA Publishes an Interim Final Rule on Business Loan Program Temporary Changes: Paycheck Protection Program

April 15, 2020

The Small Business Administration (SBA) published an interim final rule for the implementation of the Paycheck Protection Program. The interim final rule outlines formal guidance and requests public comment.

Department of Labor

COVID-19: Unemployment Insurance Weekly Claims During COVID-19

April 16, 2020

In the week ending April 11, 2020, the advance figure for seasonally adjusted initial unemployment claims was more than 5.25 million, a decrease of approximately 1.37 million from the previous week’s revised level. The previous week’s level was revised up by 9,000, from approximately 6.60 million to approximately 6.62 million.

State Agencies

New York Department of Financial Services

COVID-19: DFS ANNOUNCES TEMPORARY REGULATORY RELIEF FOR NEW YORK-CHARTERED FINANCIAL INSTITUTIONS DURING COVID-19 PANDEMIC
April 16, 2020

The New York State Department of Financial Services (DFS) announced that it has published an order to provide temporary regulatory relief for New York-chartered financial institutions. This action represents the continuation of DFS’ efforts to provide relief from statutory and administrative regulatory requirements in complying with certain obligations under New York Banking Law and New York Financial Services Law as a result of the COVID-19 pandemic.  The order facilitates the ability of New York’s financial institutions to conduct meetings virtually and extends the timing requirement for annual stockholder meetings. 

International

Bank of England

COVID-19: Monetary policy during pandemics: inflation before, during and after COVID-19 - speech by Silvana Tenreyro

April 16, 2020

A speech by Silvana Tenreyro, External Member of the Monetary Policy Committee, Bank of England, examines the impact of COVID-19 on the UK economy. In her speech, Ms. Tenreyro explains what the Bank of England is doing to keep inflation stable. Ms. Tenreyro discussed the things that affect inflation-- e.g., energy, property and wage costs for businesses. She says it is important to understand what was going on before the crisis hit because the trends that were happening then may be accelerating now. Finally, she highlights some of the challenges of interpreting inflation at the present time.

Bank of England Releases 2020 Q1 Bank Liabilities and Credit Conditions Surveys

April 16, 2020

The Bank of England has released the results of two quarterly surveys on the conditions of the banking and credit markets in 2020 Q1. The Bank Liabilities Survey focuses on the role of lenders’ liabilities and capital in driving credit and monetary conditions, while the Credit Conditions Survey focuses on trends and developments in credit conditions.