PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Tuesday, April 7, 2020

April 08, 2020

FedACTion Task Force

Major Developments

COVID-19: Treasury Updates Paycheck Protection Program FAQ with Additional Guidance

April 7, 2020

The U.S. Department of Treasury and Small Business Administration updated their FAQ on the Paycheck Protection Program (PPP) with additional guidance on a variety of topics including eligibility of small business concerns, affiliation rules, payroll cost exclusions, third-party payers, and more.

COVID-19: Agencies issue revised interagency statement on loan modifications by financial institutions working with customers affected by the coronavirus

April 7, 2020

The Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC), in consultation with state financial regulators, issued a revised interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications. The revised statement clarifies the interaction between the interagency statement issued on March 22, 2020 and the temporary relief provided by Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act. Section 4013 allows financial institutions to suspend the requirements to classify certain loan modifications as troubled debt restructurings (TDRs). The revised statement also provides supervisory interpretations on past due and nonaccrual regulatory reporting of loan modification programs and regulatory capital.

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 Development, 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 Small Business

COVID-19: Velazquez Sends Letter to Treasury Expressing Concern Over Implementation of COVID-19 Small Business Relief

April 7, 2020

House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) sent a letter to Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza expressing concern that underserved microbusinesses and small businesses in urban and rural parts of the country have been shut out of funds authorized by Congress to provide aid to small businesses struggling during the COVID-19 pandemic. In the letter, the Chairwoman asks a series of detailed questions on the Administration’s plans to rectify issues with the aid rollout.

Federal Agencies

Federal Reserve Bank of New York

COVID-19: 2019 Saw Continued Revenue Growth Among Small Employer Firms, but Funding Shortfalls and Financial Challenges Threaten Ability to Weather COVID-19 Crisis

April 7, 2020

The 12 Federal Reserve Banks today issued the Small Business Credit Survey: 2020 Report on Employer Firms, which examines the findings of an annual survey of small business owners nationwide. The Report focuses on small employer firms – businesses that have between 1 and 499 full- or part-time payroll employees (hereafter "firms"). The 2019 survey yielded more than 5,500 responses from firms in the 50 states and the District of Columbia.

Office of the Comptroller of the Currency

COVID-19: OCC Supports FinCEN’s Regulatory Relief and Risk-Based Approach for Financial Institution Compliance in Response to COVID-19

April 7, 2020

The Office of the Comptroller of the Currency (OCC) issued a statement in support of measures outlined in the April 3, 2020 COVID-19 notice issued by the Financial Crimes Enforcement Network (FinCEN and the FinCEN BSA Notice). The FinCEN BSA Notice provides for certain regulatory relief under the risk-based approach to Bank Secrecy Act (BSA) compliance, including exempting from beneficial ownership requirements new loans extended to existing customers under the Coronavirus Aid, Relief, and Economic Security (CARES) Act Paycheck Protection Program. According to its statement, the OCC supports this approach and encourages all banks to follow a risk-based approach to managing their BSA compliance programs. When evaluating a bank’s BSA compliance program, the OCC will consider the actions taken by banks to protect and assist employees, customers, and others in response to the COVID-19 pandemic, including any reasonable delays in BSA report filings, beneficial ownership verification or re-verification requirements, and other risk management processes. Banks are encouraged to contact their examiners if they anticipate delays.

Fannie Mae

COVID-19: COVID-19 Concerns Lead to Steep Drop in Housing Sentiment

April 7, 2020

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) fell 11.7 points to 80.8 in March, its lowest reading since December 2016. Five of the six HPSI components decreased month over month, including the percentage of Americans expressing concern about losing their job within the next 12 months. Consumers also reported that homebuying and home-selling conditions have worsened and took a more pessimistic view of home price growth. Year over year, the HPSI is down 9.0 points.

State Agencies

California Department of Business Oversight

COVID-19: Attorney General Becerra and Commissioner of Business Oversight Alvarez Issue Investor Alert about Investment Scams Related to COVID-19

April 7, 2020

California Attorney General Xavier Becerra and California Commissioner of Business Oversight Manuel P. Alvarez issued an alert about investment scams related to the coronavirus (COVID-19). Investors should be wary of claims that companies have developed cures or vaccines for coronavirus or can supply medical equipment which is in short supply, like masks, gloves, or ventilators.


UK Financial Conduct Authority

COVID-19: FCA Releases Guidance for Pension Providers and DB Transfer Advisers

April 7, 2020

The Financial Conduct Authority (FCA) released guidance for pension providers and DB transfer advisers in the wake of the coronavirus (Covid-19) pandemic. According to the guidance, the FCA has deferred the implementation date for the final suite of remedies stemming from its Retirement Outcomes Review. The guidance also sets out how firms can and should support consumers that seek to access their pension savings during the current pandemic.

COVID-19: FCA Releases Business Plan 2020/21

April 7, 2020

The Financial Conduct Authority (FCA) released its Business Plan 2020/21, which sets out its business priorities for the year ahead – with specific focus on the challenges presented by the coronavirus (Covid-19) pandemic. In responding to the challenge of coronavirus the FCA will focus on ensuring that financial services businesses give people the support they need, that people avoid scams, and that financial services businesses and markets know what is expected of them.

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