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PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update -- Wednesday, July 15, 2020

July 15, 2020

By FedACTion Task Force

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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. House of Representatives

Committee on Financial Services

Virtual Hearing - Promoting Economic Recovery: Examining Capital Markets and Worker Protections in the COVID-19 Era

July 14, 2020

The Subcommittee on Investor Protection, Entrepreneurship and Capital Markets hosted a virtual hearing titled “Promoting Economic Recovery: Examining Capital Markets and Worker Protections in the COVID-19 Era.”

Federal Agencies

Federal Reserve Board

Navigating Monetary Policy through the Fog of COVID

July 14, 2020

The Board of Governors of the Federal Reserve System released a speech by Governor Lael Brainard at the Perspectives on the Pandemic Webinar Series, titled “Navigating Monetary Policy through the Fog of COVID.”

Federal Reserve Bank of New York

Cash-Forward Arbitrage and Dealer Capital in MBS Markets: COVID-19 and Beyond

July 14, 2020

The Federal Reserve Bank of New York issued a Staff Report titled “Cash-Forward Arbitrage and Dealer Capital in MBS Markets: COVID-19 and Beyond.” The authors of the report focus on the market for agency mortgage-backed securities (MBS) and provide empirical evidence on the economic channels underlying the asset market disruptions during the COVID-19 crisis, as well as the effect of the Federal Reserve’s interventions. Their analysis focuses on the price deviation between the cash market and the forward market of agency MBS, controlling for differences in underlying mortgage characteristics.

Fannie Mae

Economic Growth Expectations Improve Slightly, Remain Tied to Broader COVID-19 Recovery

July 14, 2020

Fannie Mae issued a release on economic growth expectations in the third quarter of 2020. A faster-than-expected pace of recovery in the second quarter contributed to an improvement in expectations for full-year 2020 economic growth, according to the latest commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. Despite the recent resurgence in COVID-19 cases and the potential for localized measures that may slow re-opening economies, the ESR Group upgraded its forecast for 2020 annual growth to -4.2%, compared to last month’s forecast of -5.4%. Incoming data suggest that the recovery in consumer spending was stronger than anticipated in May and that it likely carried forward much of that momentum into June. The ESR Group also noted that housing continues to show strength and upwardly revised its home sales, home price growth, and purchase mortgage origination forecasts accordingly. Residential fixed investment is now expected to grow significantly in the third quarter of 2020 before pulling back in the latter part of 2020.

Department of Labor

U.S. Department of Labor Awards $3 Million Dislocated Worker Grant in Response to the Coronavirus Public Health Emergency

July 14, 2020

The U.S. Department of Labor announced the award of one Dislocated Worker Grant (DWG) totaling $3,000,000 to help address the workforce-related impacts of the coronavirus public health emergency. The award is funded under the CARES Act, which provided $345,000,000 for DWGs to prevent, prepare for and respond to coronavirus.

The latest award to the Nevada Department of Employment, Training and Rehabilitation follows seven previous waves of funding, bringing the total amount awarded to states and territories to $248,249,950.


European Commission

Coronavirus Response: Commission Welcomes “Best Practices” to Provide Relief for Consumers and Businesses

July 14, 2020

The European Commission has welcomed a list of “best practices” agreed to by the financial sector, and consumer and business organizations, to help further mitigate the impact of the COVID-19 pandemic.

Bank of England

Real-Time Gross Settlement System and Clearing House Automated Payment System Annual Report 2020

July 14, 2020

The Bank of England (BoE) has published its Annual Report for Real-Time Gross Settlement (RTGS) and Clearing House Automated Payment System (CHAPS). The report covers the time frame from March 2019 to February 2020 and focuses on BoE’s strategy for RTGS and CHAPS, how it delivered its strategy, and the main strategic focus for 2020-2021. BoE also notes its response to the challenges presented by the COVID-19 pandemic.

Reporting of Loans Made under Government Coronavirus Loan Schemes on the Form PL

July 14, 2020

The Bank of England has released Statistical Notice 2020/06, which provides guidance to reporters about how interest receivable on loans made under the three government coronavirus loan guarantees (Coronavirus Large Business Interruption Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Bounce Back Loan Scheme) should be reported.

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