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Daily Financial Regulation Update - Wednesday, April 15, 2020

April 16, 2020

By FedACTion Task Force

PH Client Alerts

to read more from our Coronavirus series.

Major Developments

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

April 15, 2020

The U.S. Department of the Treasury and Small Business Administration updated their FAQ to add FAQ 29 with respect to the Paycheck Protection Program (PPP), providing additional guidance that lenders can accept scanned copies of signed loan applications and documents containing required information and certifications, as well as the promissory note used for the PPP loan. Any form of e-consent or e-signature that complies with the requirements of the Electronic Signatures in Global and National Commerce Act (P.L. 106-229) can be accepted.

Congress

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: Chairwoman Waters, Ranking Member Brown Call on Administration to Stabilize the Housing Market During the Coronavirus Pandemic

April 15, 2020

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, and Senator Sherrod Brown (D-OH), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, sent a letter to Federal Reserve Chairman Jerome Powell and U.S. Department of the Treasury (Treasury) Secretary Steven Mnuchin, urging them to ensure the stability of the housing market in the face of the Coronavirus pandemic. The lawmakers called on the Federal Reserve and Treasury to use the authority provided to them by Congress to prepare to ensure the stability of nonbank mortgage servicers in the event of increased liquidity need. Servicers may have greater liquidity needs as millions of homeowners and renters lose jobs, are furloughed, or see reduced hours, which will keep them from making timely mortgage and rent payments.

Federal Agencies

Department of Treasury

COVID-19: Supplemental Security Income Recipients Will Receive Automatic COVID-19 Economic Impact Payments

April 15, 2020

The Social Security Administration announced that Supplemental Security Income (SSI) recipients will automatically receive their Economic Impact Payments directly to their bank accounts through direct deposit, Direct Express debit card, or by paper check, just as they would normally receive their SSI benefits. The U.S. Department of the Treasury anticipates SSI recipients will receive these automatic payments no later than early May.

COVID-19: “Get My Payment” Web App Launched for Americans to Submit Direct Deposit Information and Track Payments

April 15, 2020

The U.S. Department of the Treasury and Internal Revenue Service launched the “Get My Payment” web application. The free application allows taxpayers who filed their tax return in 2018 or 2019 but did not provide their banking information on either return to submit direct deposit information. Once they do, they will get their Economic Impact Payments deposited directly into their bank accounts, instead of waiting for a check to arrive in the mail. “Get My Payment” also allows taxpayers to track the status of their payment.

COVID-19: Federal Reserve Releases Summary of Commentary on Current Economic Conditions During the COVID-19 Pandemic

April 15, 2020

The Federal Reserve System released the April 2020 Commentary on Current Economic Conditions, commonly known as the Beige Book, which is published eight times per year about current economic conditions across the 12 Federal Reserve Districts. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. The April 2020 edition focuses on the impact of COVID-19 on each District and nationally.

COVID-19: Federal Reserve Releases Revision of Industrial Production and Capacity Utilization for March 2020 Showing Impact of COVID-19

April 15, 2020

The Federal Reserve released a revision of industrial production and capacity utilization for March 2020. Total industrial production fell 5.4% in March, as the COVID-19 pandemic led many factories to suspend operations late in the month. Manufacturing output fell 6.3%; most major industries posted decreases, with the largest decline registered by motor vehicles and parts. The decreases for total industrial production and for manufacturing were their largest since January 1946 and February 1946, respectively. The indexes for utilities and mining declined 3.9% and 2%, respectively. At 103.7% of its 2012 average, the level of total industrial production in March was 5.5% lower than a year earlier. Capacity utilization for the industrial sector decreased 4.3 percentage points to 72.7% in March, a rate that is 7.1 percentage points below its long-run (1972–2019) average.

Consumer Financial Protection Bureau

COVID-19: CFPB and FHFA Announce Program to Protect Borrowers During COVID-19 Emergency

April 15, 2020

The Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) announced the Borrower Protection Program, a new joint initiative that enables CFPB and FHFA to share servicing information to protect borrowers during the coronavirus national emergency. Under the program, CFPB will make complaint information and analytical tools available to FHFA via a secure electronic interface, and FHFA will make available to CFPB information about forbearances, modifications and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac.

Fannie Mae

COVID-19: Fannie Mae Releases April 2020 Economic and Housing Outlook: Record U.S. Expansion Likely Undone by COVID-19

April 15, 2020

The longest economic expansion in U.S. history has likely come to an end amid the unprecedented impacts of COVID-19, according to the latest commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. With consumers staying home, many businesses shutting, and household financial stress growing, the ESR Group now projects back-to-back quarters of negative real GDP growth in the first half of 2020, meeting the commonly accepted definition of a recession. The updated forecast includes expectations of a historically large contraction in the second quarter of approximately 25% annualized amid sizeable declines in employment, consumer spending, and business investment. While full-year 2020 output is expected to contract 3.1%, the ESR Group anticipates a growth rebound of 4.8% in 2021. Risks to the forecast remain skewed heavily to the downside, with the length and magnitude of virus-related shutdowns ultimately determining the likely contraction’s severity.

Freddie Mac

COVID-19: Freddie Mac Multifamily Revises COVID-19 Forbearance Program to Further Align with CARES Act

April 15, 2020

Freddie Mac today announced revisions to its Multifamily COVID-19 forbearance program to further align with CARES Act provisions related to multifamily borrowers and tenants. Freddie Mac’s program provides three months of forbearance for borrowers affected by COVID-19, along with a no-evictions policy for tenants during the forbearance period. Freddie Mac created its program prior to the enactment of the CARES Act, but the program at inception was largely consistent with the new law and required only minimal changes.

International

European Commission

COVID-19: Commission releases European roadmap on path towards common lifting of containment measures

April 16, 2020

The European Commission, in cooperation with the President of the European Council, has put forward a European roadmap to phase-out the containment measures due to the coronavirus outbreak.

UK Financial Conduct Authority

COVID-19: FCA Issues Two Dear CEO Letters on Insuring and Lending to SMEs during COVID-19

April 15, 2020

The Financial Conduct Authority (FCA) has released two Dear CEO letters to insurers and lenders encouraging them to continue their support of small to mid-sized enterprises (SMEs) during the coronavirus pandemic. The letters outline the FCA’s expectations for insurance firms and banks in relation to their management of SME accounts. They also discuss the new FCA small business unit, which will coordinate the activities of the FCA across small business issues.