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Daily Financial Regulation Update - Wednesday, July 1, 2020

July 01, 2020

By FedACTion Task Force

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Major Developments

Mnuchin, Powell Testify Before House Financial Services Committee

June 30, 2020

Steven Mnuchin, Secretary of the Treasury, and Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, testified before the House Financial Services Committee in a hearing entitled, “Oversight of the Treasury Department's and Federal Reserve's Pandemic Response.”

Waters Delivers Statement at Hearing on Pandemic Response

June 30, 2020

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services (the Committee), delivered a statement at a full Committee hearing on the Treasury Department’s and Federal Reserve’s pandemic responses. In her opening remarks, Congresswoman Waters called on Secretary Mnuchin and Chair Powell, to ensure their respective agencies take extensive measures to prevent an unequal recovery for communities of color.

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.

U.S. Senate

Committee on Banking, Housing, and Urban Affairs

Sens. Menendez, Brown Introduce Bill to Support Homeowners, Renters Struggling Amid COVID-19 Pandemic and Economic Fallout

June 30, 2020

U.S. Senators Bob Menendez (D- N.J.) and Sherrod Brown (D-Ohio) introduced the Coronavirus Housing Counseling Improvement Act (the Act) to expand access to critical information, assistance programs and services for families struggling to remain in their homes because of the COVID-19 pandemic and economic fallout. The Act would provide $700 million for NeighborWorks to support housing counseling services to help homeowners, renters, people experiencing homelessness, and people at risk of homelessness navigate their housing options and rights during the COVID-19 crisis, including protections and resources provided through COVID-19 relief legislation.

U.S. House of Representatives

Committee on Financial Services

Waters Calls for Urgent Action to Prevent Eviction Crisis

June 29, 2020

In a floor statement Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, called for urgent action to prevent an eviction crisis and provided an overview of H.R. 7301, the Emergency Housing Protections and Relief Act of 2020 (the Act). The Act provides $100 billion for an emergency rental assistance fund and $75 billion for a homeowners assistance fund, extends eviction and foreclosure moratoria, provides $18 billion in funding for homeless assistance and creates a lending facility for mortgage services and rental property owners.

Warren, García and Lee Introduce Protecting Renters from Evictions and Fees Act of 2020

June 29, 2020

Senator Elizabeth Warren (D-MA), Ranking Member of the Senate Banking, Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection, Congressman Jesús G. García (D-IL), a member of the House of Representatives Committee on Financial Services, and Congresswoman Barbara Lee (D-CA) introduced the Protecting Renters from Evictions and Fees Act of 2020 (the Act). The Act extends the federal eviction moratorium to March 27, 2021, one year after the date of enactment of the CARES Act, and expands the moratorium to cover substantially all renters.

Federal Agencies

Department of the Treasury

Financial Action Task Force (FATF) Advances its Work on Virtual Assets, Proliferation Financing, COVID-19 and Illegal Wildlife Trafficking

June 30, 2020

The Financial Action Task Force (FATF) concluded its 31st plenary meeting by calling on its members to tackle new threats and vulnerabilities posed by criminals during the COVID-19 crisis. The FATF also completed a 12-month review of progress made by jurisdictions on implementing the new FATF standards on virtual assets adopted during the U.S. presidency of the FATF. The international task force further agreed upon draft text, on which it will seek public consultation, revising its standards to incorporate measures to counter proliferation financing, and adopted a report on money laundering and illegal wildlife trafficking.

Federal Reserve Bank of New York

Williams Delivers Remarks at Institute of International Finance: Central Banking in the Age of COVID-19 Summit

June 30, 2020

John C. Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, delivered a speech at the Institute of International Finance, providing an overview of actions the Federal Reserve has taken to stabilize markets during the COVID-19 pandemic.

Freddie Mac

Freddie Mac Releases Multifamily Securitization June Forbearance Report

June 30, 2020

Freddie Mac released the Multifamily Securitization Forbearance Report for June 2020. According to the report, weekly jobless claims have moderated from their mid-March high of 6.6 million down to 1.5 million for the week ending June 20, 2020. Continuing unemployment claims are beginning to recede from their peak of 24.9 million in the week ending May 9, but still stand at 20.5 million – more than three times higher than the Great Recession’s peak. The unemployment rate in May was 13.3%, which is a modest decrease from April’s figure of 14.7%.

State Agencies

New York State Department of Financial Services

Department of Financial Services Alerts Regulated Banking Institutions of New Responsibilities under New York’s Community Reinvestment Act
June 30, 2020

The New York State Department of Financial Services alerted New York-regulated banking institutions of their responsibilities under amendments to New York State’s Community Reinvestment Act (CRA) with respect to minority- and women-owned businesses, and of opportunities to receive CRA credit for activities undertaken in response to the COVID-19 pandemic.

International

Bank of England

Haldane Delivers Speech on Second Quarter

June 30, 2020

In a speech on the second quarter, Chief Economist of Bank of England Andy Haldane examined a range of economic indicators to consider the impact that COVID-19 has had on the UK and global economies since the start of 2020, as well as the outlook for the remainder of the year. The speech also considered the implications for monetary policy and set out the rationale for Chief Economist Haldane’s most recent decisions.

Bank of England Prudential Regulation Authority

PRA Releases Statement on the Capital Requirements Regulation (CRR) ‘Quick Fix’ package

June 30, 2020

The Bank of England Prudential Regulation Authority (the PRA) delivered a statement on amendments to the Capital Requirements Regulation (CRR) the CRR “Quick Fix” package which applies directly to PRA-regulated firms. The CRR “Quick Fix” introduces new transitional arrangements for the capital impact of IFRS 9 ECL provisions. The CRR ‘Quick Fix’ also accelerates the date of application of the revised SME support factor and the infrastructure support factor and includes a temporary discretion for firms until December 31, 2022 to remove a proportion of unrealized gains and losses on exposures to certain public sector authorities.

UK Financial Conduct Authority

FCA Issues Statement on its Expectations Regarding Approved Persons Regime

June 30, 2020

The Financial Conduct Authority (FCA) released a statement setting out its expectations to help benchmark administrators and firms using Appointed Representative (AR) arrangements apply the Approved Persons Regime (APR) during the COVID-19 pandemic. Among other steps, the FCA intends to issue a modification by consent to the 12-week rule, which will allow temporary arrangements for up to 36 weeks. The 12-week rule allows an individual to cover for an Approved Person without being approved, where the absence is temporary or reasonably unforeseen, and the appointment is for less than 12 consecutive weeks.

FCA and PSR Publish Information on Identifying and Managing Access to Cash during the Pandemic

June 30, 2020

The Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) published additional information on their joint work to map access to cash and how it will shape future work in this area. The FCA and PSR, along with other regulators, collaborated to create a single database of the UK’s cash access points, allowing them to monitor where access to cash “cold spots” are emerging and coordinate the industry response to ensure that vulnerable and self-isolating groups can continue to access cash.