PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update -- Tuesday, August 11, 2020
August 11, 2020
FedACTion Task Force
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Major Developments
Federal Reserve Board
Federal Reserve Board Announces Individual Large Bank Capital Requirements, which will be Effective on October 1, 2020
August 10, 2020
The Board of Governors of the Federal Reserve System (Federal Reserve) announced individual large bank (i.e., those with more than $100 billion in total assets) capital requirements, effective October 1, 2020. The Federal Reserve’s release shows the total common equity tier 1, or CET1, capital requirements for each large bank.
Congress
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 Bank of New York
The Gradual Improvement in Consumer Expectations Halted in July
August 10, 2020
The Federal Reserve Bank of New York’s Center for Microeconomic Data released the July 2020 Survey of Consumer Expectations, which shows that household expectations regarding their employment prospects and their year-ahead financial situation slightly deteriorated in July after two months of gradual improvement. Other indicators, such as the expected growth in home price and in household income, remained steady at a considerably higher level than in March and April, but below their pre-COVID-19 levels. Median inflation expectations increased 0.2 points at the one-year and three-year horizons, respectively, while disagreement about future inflation also increased.
Implications of the COVID-19 Disruption for Corporate Leverage
August 10, 2020
The Federal Reserve Bank of New York’s Liberty Street Economics blog released a post titled “Implications of the COVID-19 Disruption for Corporate Leverage”. The authors examine the preliminary impact of the significant economic disruptions caused by the COVID-19 pandemic on the cash flow and leverage of U.S. public companies. The authors find that the pandemic had a negative impact on cash flow while also reducing corporations’ interest expenses. Looking ahead, they find that a sizable share of U.S. companies have interest expense greater than cash flow, raising concerns about the ability of those companies to endure further liquidity shocks.
Department of Housing and Urban Development/Federal Housing Administration
HUD Awards $472 Million to Public Housing Authorities to Help Keep Residents Housed
August 10, 2020
U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced $472 million in CARES Act funding to help low-income families during the COVID-19 pandemic. The funding can be used by Public Housing Authorities to help families assisted by Housing Choice Vouchers (HCV) and Mainstream vouchers prevent, prepare for and respond to COVID-19. The funding will be awarded to Public Housing Authorities across the country.