left-caret
Insights

ph fedaction financial regulatory updates homepage

Daily Financial Regulation Update --Tuesday, September 29, 2020

September 29, 2020

By FedACTion Task Force

Subscribe to

PH Client Alerts

to read more from our Coronavirus series.

Congress

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

to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.

to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 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.

Federal Agencies

Federal Reserve Bank of New York

Consumers Expect Modest Increase in Spending Growth and Continued Government Support

September 28, 2020

The Federal Reserve Bank of New York’s (New York Fed) Liberty Street Economics blog released a post titled “Consumers Expect Modest Increase in Spending Growth and Continued Government Support.” The New York Fed’s Center for Microeconomic Data released results from its August 2020 Survey of Consumer Expectations (SCE) Household Spending Survey and SCE Public Policy Survey. The authors highlight the key takeaways from the data releases regarding the evolution of households’ spending and public policy expectations. There has been a moderate rebound since April 2020 in spending growth and in spending growth expectations, and households assign a low chance to reductions in government support programs.

September 28, 2020

The Federal Reserve Bank of New York’s Liberty Street Economics blog released a post titled “COVID-19 and the Search for Digital Alternatives to Cash.” According to the authors, an analysis of Google searches during the COVID-19 pandemic demonstrates a shift in public interest from cash-related search terms to digital payment options as payments that require physical contact, such as cash, have been discouraged. The authors outline further evidence of the impact of COVID-19 on consumer payment behavior and signal they intend to release a follow-up post to examine the implications of the rise of digital alternatives to cash on privacy.

International

Bank of England

Could COVID-19 Lead to Higher Bank Losses on Unsecured Debt?

September 28, 2020

The Bank of England (BoE) issued a post titled “Could COVID-19 Lead to Higher Bank Losses on Unsecured Debt?” The BoE’s analysis indicates that the COVID-19 economic shock could see banks face higher losses on unsecured debt than on mortgages. Three factors explain the BoE’s findings: (i) lower income households, whose finances have come under pressure during COVID-19, are more likely to hold unsecured debt and not mortgages; (ii) unsecured debt losses tend to increase when the unemployment rate rises; and (iii) bank losses on unsecured debt can exceed those on mortgage debt, even though the amount of mortgage debt in the UK is far higher than unsecured debt.