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PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Thursday, June 4, 2020

June 04, 2020

By FedACTion Task Force

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Major Developments

Senate Passes Paycheck Protection Program Flexibility Act of 2020

June 3, 2020

The U.S. Senate, by unanimous consent, passed the Paycheck Protection Program Flexibility Act of 2020, which was previously approved by the U.S. House of Representatives as H.R. 7010. The bill now heads to the President for his signature. The bill modifies certain provisions related to the forgiveness of loans under the Paycheck Protection Program (PPP) and provides borrowers greater flexibility in how they spend PPP loan proceeds. Principally, the bill:

  • Reduces the portion of PPP loan proceeds that must be spent on payroll costs from 75% to 60%;

  • Extends the time period for borrowers to spend the loan proceeds from the current eight-week period to the earlier of 24 weeks or December 31, 2020;

  • Extends the deadline to apply for a PPP loan to December 31, 2020;

  • Increases the minimum loan maturity from two years to five years;

  • Extend December 31, 2020 from June 30, 2020 the time small businesses have to rehire employees or restore payroll levels without incurring any reduction in the PPP loan forgiveness amount;

  • Provides exemptions in eligibility for loan forgiveness for employee unavailability when an employer is unable to rehire an employee or hire a replacement or for the inability to return to the same level of business due to compliance with certain COVID-19-related orders; and

  • Allows PPP loan borrowers to be eligible to defer payroll tax payments.

Federal Reserve Board Announces an Expansion in the Number and Type of Entities Eligible to Directly Use its Municipal Liquidity Facility and Issues Revised FAQs

June 3, 2020

The Federal Reserve Board announced an expansion in the number and type of entities eligible to directly use its Municipal Liquidity Facility (MLF). Under the new terms, all U.S. states will be able to have at least two cities or counties eligible to directly issue notes to the MLF regardless of population. Governors of each state will also be able to designate two issuers in their jurisdictions whose revenues are generally derived from operating government activities (such as public transit, airports, toll facilities, and utilities) to be eligible to directly use the MLF.


to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), 116 HR. 748, Enacted March 27, 2020.

to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 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 Small Business and Entrepreneurship

Senators Rubio and Cardin Urge Treasury and SBA to Provide Data Reporting to Congress and the Public on Small Business Relief Programs

June 3, 2020

Senators Marco Rubio (R-FL) and Ben Cardin (D-MD), Chairman and Ranking Member of the Senate Committee on Small Business and Entrepreneurship, sent a letter to Steven Mnuchin, Secretary of the Department of the Treasury, and Jovita Carranza, Administrator of the Small Business Administration (SBA), urging the agencies to provide additional data and reporting, including names of borrowers, on the Paycheck Protection Program, Economic Injury Disaster Loan program and Small Business Debt Relief programs as enacted and expanded by the CARES Act.

Senator Rubio Chairs Hearing on Main Street Perspectives on COVID-19’s Impact on Small Businesses

June 3, 2020

Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, convened a hearing titled, “Perspectives from Main Street: COVID-19’s Impact on Small Business.”

Federal Agencies

Department of the Treasury

Treasury and IRS Announce Delivery of 159 Million Economic Impact Payments

June 3, 2020

The Department of the Treasury and Internal Revenue Service (IRS) announced that 159 million Economic Impact Payments, worth more than $267 billion, have been distributed to Americans in two months. Payments have been sent to all eligible Americans for whom the IRS has the necessary information to make a payment. These totals do not include the more than $2.5 billion that has been delivered to U.S. territories for payment to territory residents.

Federal Reserve Bank of New York

New York Fed Announces Third “Fed and Main Street” Virtual Forum on the Immigrant Experience during the COVID-19 Crisis

June 3, 2020

On Thursday, June 11, 2020, the Federal Reserve Bank of New York will host a virtual forum focused on the perspectives and needs of immigrant communities during the COVID-19 crisis. The event, titled “The Immigrant Experience during COVID-19,” marks the third installment of the Fed and Main Street series, which convenes leaders from the business, community development, nonprofit and policy sectors to discuss the effects of the COVID-19 crisis and efforts to support the recovery.


COVID-19 Early Retirement Withdrawals

June 3, 2020

Staff from the Financial Industry Regulatory Authority, Securities and Exchange Commission and North American Securities Administrators Association have joined together to provide a warning to investors about promoters targeting retirement accounts, in light of the CARES Act provision that allows retirement investors affected by COVID-19 to gain access to up to $100,000 of their retirement savings without being subject to early withdrawal penalties. The guidance also provides a few key considerations for investors thinking of using 401(k) withdrawals or loans to purchase securities.


European Commission

EU Budget: Commission Takes Steps to Make €11.5 Billion Available for Crisis Repair and Recovery in 2020

June 3, 2020

The Commission has proposed modifications to its budget for 2020 to make €11.5 billion for crisis repair and recovery available already in 2020. Once available, the funds will go to help the regions most in need and support businesses and those in need outside EU borders.

UK Financial Conduct Authority

FCA Confirms Guidance for Insurance Firms on Assessing Product Value

June 3, 2020

The Financial Conduct Authority issued a release confirming guidance for insurance firms to consider the impact of COVID-19 on the value of their insurance products. The guidance goes into immediate effect and will be reviewed in six months in light of developments regarding COVID-19, and may be revised if appropriate.

Coronavirus (Covid-19) Financial Resilience Survey

June 3, 2020

The Financial Conduct Authority (FCA) issued a statement that it is asking around 13,000 firms to complete a short survey to help the FCA obtain a more accurate view of firms’ financial resilience as a result of COVID-19. The survey will be sent to firms between June 4 and June 8, 2020.

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