PH FedACTion: Financial Regulatory Updates
Daily Financial Regulation Update - Tuesday, May 26, 2020
May 26, 2020
FedACTion Task Force
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Major Developments
SBA Releases Two More Interim Final Rules Providing Guidance on Loan Forgiveness and the SBA Loan Review Process
May 22, 2020
The Small Business Administration (SBA) issued two more Interim Final Rules. The first Interim Final Rule provides borrowers and lenders additional guidance on requirements governing the forgiveness of Paycheck Protection Program (PPP) loans. Under the first Interim Final Rule, banks are required to issue decisions on borrowers’ PPP loan forgiveness applications within 60 days after receiving them. The SBA will then pay the lender within 90 days. The second Interim Final Rule provides guidance with respect to the SBA loan review process and describes borrower and lender responsibilities in connection therewith. The SBA says in the second Interim Final Rule that it has the right to review any PPP loan at any time. According to the SBA, it is preparing a separate rule to establish an appeals process for borrowers determined to be ineligible for a PPP loan or ineligible for the PPP loan amount or the loan forgiveness amount claimed by the borrower. Finally, the two Interim Final Rules do not extend the amount of time borrowers have to use PPP loan proceeds beyond the current eight-week period and do not eliminate or reduce the 75% payroll rule.
Congress
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 the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 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.
State Agencies
New York State Department of Financial Services
York State Health Insurers Must Cover Covid-19 Infection and Antibody Tests Administered By Pharmacists Without Cost-Sharing
May 22, 2020
The New York State Department of Financial Services (DFS) issued a circular letter stating New York State health insurers must provide coverage of coronavirus (COVID-19) infection and antibody tests ordered and provided by a pharmacist without cost-sharing. The letter reminds health insurers that diagnostic testing, including laboratory tests, is an essential health benefit, and, therefore, must be covered under individual and small group comprehensive health insurance policies and contracts. New York Insurance Laws also require health insurers of large group comprehensive health insurance policies and contracts to make available coverage for laboratory tests, and such tests are typically covered in the base policy or contract.
International
European Banking Authority
COVID-19 is placing unprecedented challenges on EU banks
May 25, 2020
The European Banking Authority (EBA) published a preliminary assessment of the impact of COVID-19 on the EU banking sector. According to the note, the capital accumulated by banks since the global financial crisis together with capital relief initiatives provided by regulators amounts on average to 5 percentage points above banks’ overall capital requirements. According to the note, this capital buffer should allow many banks to absorb potential credit risk losses derived from a sensitivity analysis based on the 2018 stress test.