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PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Tuesday, April 14, 2020

April 15, 2020

By FedACTion Task Force

PH Client Alerts

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 (SBA) updated their FAQ for the Paycheck Protection Program (PPP), providing additional guidance confirming that:

(i) certain entities do not need the approval of the SBA’s Standards of Conduct Committee for PPP assistance in cases where the entity’s sole proprietor, partner, officer, director, or stockholder with a 10% or more interest is: a current SBA employee; a member of Congress; an appointed official or employee of the legislative or judicial branch; a member or employee of an SBA Advisory Council or SCORE volunteer; or a household member of any of the preceding individuals (FAQ 26);

(ii) a written statement of no objection is not required from another government department or agency for PPP loans to be made in cases where the entity’s sole proprietor, partner, officer, director, or stockholder with a 10% or more interest, or if a household member of any of the preceding individuals, is an employee of another government department or agency having a grade of at least GS-13 or its equivalent (FAQ 27); and

(iii) a lender is not permitted to submit a PPP loan application to the SBA through E-Tran before the lender has fulfilled its responsibility to confirm receipt of borrower certifications, information demonstrating the borrower had employees and paid salaries and payroll taxes on or around February 15, 2020, and confirmed the average monthly payroll costs by reviewing documentation submitted with the borrower’s application (FAQ 28).


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.

U.S. House of Representatives

Committee on Financial Services

COVID-19: Financial Services and Oversight Committee Chairs Seek Briefing on FDIC’s Readiness for Financial Crisis During Pandemic

April 14, 2020

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, Congresswoman Carolyn B. Maloney (D-NY), Chairwoman of the Committee on Oversight and Reform, and Congressman Raja Krishnamoorthi (D-IL), Chairman of the Oversight Subcommittee on Economic and Consumer Policy, sent a letter to the Federal Deposit Insurance Corporation (FDIC) seeking information on the FDIC’s preparedness for a financial crisis as the coronavirus pandemic poses a threat to the stability of the nation’s economy.

Federal Agencies

Federal Bank Regulatory Agencies

COVID-19: Federal Banking Agencies to Defer Appraisals and Evaluations for Real Estate Transactions Affected by COVID-19

April 14, 2020

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency issued an interim final rule to temporarily defer real estate-related appraisals and evaluations under the agencies’ appraisal regulations. Under the interim final rule, the agencies are deferring certain appraisals and evaluations for up to 120 days after closing of residential or commercial real estate loan transactions. The temporary provisions will expire on December 31, 2020, unless extended by the federal banking agencies.

In addition, the federal banking agencies, together with the National Credit Union Administration and Consumer Financial Protection Bureau, in consultation with state banking and financial regulators, issued a joint statement outlining flexibilities in industry appraisal standards and under the agencies’ appraisal regulations and described temporary changes to Fannie Mae and Freddie Mac appraisal standards to address challenges relating to appraisals and evaluations for real estate-related financial transactions affected by COVID-19.

Consumer Financial Protection Bureau

COVID-19: Consumer Financial Protection Bureau Announces Guidance on Remittance Transfers During COVID-19 Pandemic

April 14, 2020

The Consumer Financial Protection Bureau (CFPB) issued a policy statement announcing its approach to the CFPB’s supervision and enforcement of certain remittance transfer requirements in response to COVID-19. The Electronic Fund Transfer Act (EFTA) requires a remittance transfer provider to disclose certain information to consumers who send remittance transfers, including information related to the exact costs of a transfer. The EFTA provides a temporary exception to that requirement allowing such institutions, in certain circumstances, to disclose estimated exchange rates and other third-party fees, instead of exact amounts. That temporary exception will expire on July 21, 2020. The CFPB’s policy statement confirms that, for international remittance transfers that occur on or after July 21, 2020 and before January 1, 2021, the CFPB will neither cite supervisory violations nor initiate enforcement actions against insured depository institutions for continuing to provide estimates to consumers under the temporary exception, instead of actual amounts.

Federal Reserve Bank of New York

COVID-19: The Federal Reserve’s Recent Actions to Support the Flow of Credit to Households and Businesses During the Coronavirus Pandemic

April 14, 2020

Lorie K. Logan, Executive Vice President of the Federal Reserve Bank of New York delivered remarks before the Foreign Exchange Committee, providing an overview of the Federal Reserve’s recent actions to support financial markets during the coronavirus pandemic.

Statement Regarding Repurchase Operations

April 13, 2020

The Federal Reserve Bank of New York (FRBNY) released the schedule of large-scale overnight and term repurchase agreement (repo) operations for the monthly period from April 14, 2020 through May 13, 2020. The FRBNY’s Open Market Trading Desk indicated that it will reduce the frequency of some repo operations during this period in light of more stable repo market conditions.

Office of the Comptroller of the Currency

COVID-19: OCC Announces Paycheck Protection Program Listening Sessions

April 14, 2020

The Office of the Comptroller of the Currency (OCC) announced that its Office of Innovation will host three listening sessions in April to discuss issues and potential solutions relating to the Paycheck Protection Program (PPP) established under the CARES Act. Listening sessions will be used to inform the OCC and participants about emerging topics, issues, or concerns of industry stakeholders such as banks and non-banks, including fintechs. The sessions will focus on three aspects of the PPP: payroll verification, fraud identification, and backend processes.

Fannie Mae

COVID-19: Fannie Mae and Freddie Mac Announce Extended URLA Implementation Timeline to Support Industry during COVID-19 Pandemic

April 14, 2020

Freddie Mac and Fannie Mae will extend the implementation timeline for the redesigned Uniform Residential Loan Application (URLA) and automated underwriting systems (AUS) to support the industry during the COVID-19 pandemic. The new implementation date for the use of the redesigned URLA and AUS specifications will be March 1, 2021.

Freddie Mac

COVID-19: Freddie Mac Issues Selling Guidance Related to COVID-19

April 14, 2020

Freddie Mac issued Bulletin 2020-11 announcing additional flexibilities and other selling updates related to condominium project reviews, appraisals, CHOICERenovation mortgages, post-funding quality control reviews, mandatory cash contracts and remote online notarization, in response to the ongoing economic implications and uncertainty related to the COVID-19 pandemic and its impacts on borrowers and the mortgage origination process.


European Banking Authority

COVID-19: EU banks expected to weather upcoming impacts stemming from the coronavirus crisis because of sound capital ratios

April 14, 2020

The European Banking Authority (EBA) published its quarterly Risk Dashboard covering Q4 2019 data and summarizing the main risks and vulnerabilities in the EU banking sector. Ahead of the COVID-19 crisis, EU banks’ capital ratios and asset quality improved and the EBA concluded that sound capital positions should enable EU banks to weather expected upcoming impacts stemming from the COVID-19 crisis.

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