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Daily Financial Regulation Update - Wednesday, June 10, 2020

June 10, 2020

By FedACTion Task Force

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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

Federal Agencies

Department of the Treasury

Secretary Mnuchin Delivers Statement on Main Street Lending Program Expansion

June 9, 2020

Steven T. Mnuchin, Secretary of the U.S. Department of the Treasury, delivered a statement on the expansion of the Main Street Lending Program (Program) announced by the Board of Governors of the Federal Reserve System (FRB). In his statement, Secretary Mnuchin pointed out that the FRB had lowered the minimum and increased the maximum loan size thresholds available under the Program, and had extended the loan repayment period under the Program by providing for a two-year payment deferral before any payments are due. Secretary Mnuchin further noted the FRB had extended the term of loans under the Program to five years, and had lowered the portion of the loans retained by the originating bank to five percent for all eligible loans submitted to the Program.

Federal Reserve Board

Federal Reserve Board Announces Imminent Release of Results from Dodd-Frank Act Stress Tests and CCAR

June 9, 2020

The Board of Governors of the Federal Reserve System (FRB) announced that results from both its Dodd-Frank Act stress tests, and the related Comprehensive Capital Analysis and Review (CCAR), will be released on June 25, at 4:30 p.m., Eastern.

According to the FRB, stress tests help ensure that banks have adequate capital to absorb losses so that they can lend to households and businesses even in a serious recession. The FRB announced that his year’s release will also include additional analyses that explore how plausible risks to the economy stemming from COVID-19 could affect bank capital.

FINRA

FINRA Hosts Panel on Financial Crimes, Trends and Responses

June 9, 2020

The Financial Industry Regulatory Authority (FINRA) hosted a panel discussion titled “Financial Crimes, Trends and Responses – In the Midst of the Pandemic”. The panel discussed the multitude of threats across the financial crimes spectrum, the resultant need for a shift in tactics, and the increase in known attack vectors in the midst of COVID-19.

NCUA Issues Letter to Credit Unions on Prompt Corrective Action Regulatory Relief Measures due to COVID-19 Effects

June 9, 2020

In a letter to Federally Insured Credit Unions (Credit Unions), the National Credit Union Administration (NCUA) advised the Credit Unions that in May 2020 the NCUA Board approved additional regulatory relief measures related to the NCUA’s prompt corrective action (PCA) regulations, anticipating that some credit unions may experience a temporary reduction in earnings and capital due to their COVID-19 response efforts. The NCUA’s letter pointed out that the interim final rule provides relief to Credit Unions during COVID-19, while still maintaining the safety and soundness of the credit union system.

The NCUA’s letter also discussed an administrative order enclosed with the letter. According to the letter, the administrative order reduces the amount of earnings retention required for credit unions classified as adequately capitalized. Additionally, the letter discussed credit unions’ authority to submit a streamlined net worth restoration plan (NWRP) if their net worth ratio declined to undercapitalized predominantly due to temporary share growth during COVID-19.

Department of Housing and Urban Development/Federal Housing Administration

HUD Provides Remaining $2.96 Billion in CARES Act Funding for Homeless Populations

June 9, 2020

U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced the allocation of $2.96 billion in Emergency Solutions Grants (ESG) funding to support homeless Americans and individuals at risk of becoming homeless because of hardships such as job loss, wage reduction, or illness due to COVID-19. The latest funding is in addition to $1 billion in ESG grants announced within a week of the enactment of the CARES Act.

Department of Labor

IG Dahl Testifies Before Senate Finance Committee

June 9, 2020

Scott Dahl, Inspector General (IG) for the U.S. Department of Labor (DOL), provided testimony at a U.S. Senate Committee on Finance hearing on unemployment insurance during COVID-19. IG Dahl’s statement focused on the Office of Inspector General’s work to ensure the DOL is effectively addressing new and heightened challenges created by the unprecedented expansion of the unemployment insurance program caused by COVID-19.

State Agencies

New York State Department of Financial Services

Superintendent Lacewell Announces DFS Program to Promote Innovative Financial Services and Products

June 9, 2020

Linda A. Lacewell, Superintendent of the New York State Department of Financial Services (DFS), announced DFS had launched DFS FastForward, a new program designed to support innovators seeking to deliver new solutions in financial services, Fintech, InsurTech and HealthTech during COVID-19.

International

Bank of England

Deputy Governor Cunliffe Delivers Webinar Speech on Financial System Resilience

June 9, 2020

Jon Cunliffe, Deputy Governor of the Bank of England for Financial Stability, delivered a speech titled “Financial System Resilience: Lessons from a Real Stress” at an Investment Association Webinar. In the speech, Deputy Governor Cunliffe explored what lessons can be learned from the performance of the financial system in response to the COVID-19, and what such performance indicates about the effectiveness of the financial reforms introduced after 2008.

UK Financial Conduct Authority

FCA Publishes Statement on Government Support Package for Debt Advice Services

June 9, 2020

The Financial Conduct Authority (FCA) issued a Statement on HM Treasury’s announcement of an extra £37.8 million of funding to provide essential debt advice services and help additional people who face financial struggles due to COVID-19.
In the Statement, the FCA noted the distribution of the funding across England will be overseen by The Money and Pensions Service (MaPS) and will come from a combination of sources: £20.6 million from government, £14.2 million through a one-off increase to the debt advice levy, and a further £3 million contribution from MaPS. For the Devolved Authorities, £2 million (out of an additional £5.9 million) will come from the Devolved Authorities’ debt advice levy.