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Daily Financial Regulation Update -- Wednesday, November 4, 2020

November 04, 2020

By FedACTion Task Force

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Major Developments

SBA Requires Recipients of PPP Loans of More than $2 Million to Provide Further Information to Document Economic Necessity

November 3, 2020

The U.S. Small Business Administration (SBA), without fanfare, has requested that lenders of Paycheck Protection Program (PPP) loans with an original principal amount of $2 million or more obtain specific information from borrowers to document the good-faith certification made by such borrowers in the PPP application process concerning the “economic necessity” of their PPP loans obtained. The questionnaire reflects the first indication from the SBA since its May 13, 2020 FAQ regarding the good-faith certification concerning economic necessity (FAQ 46) of the form that the agency’s review of larger PPP loans will take.

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

U.S. Department of the Treasury

Assistant Secretary of the Treasury Michael Faulkender Statement on the Economy

November 3, 2020

U.S. Department of the Treasury Assistant Secretary Michael Faulkender gave a statement on the economy for the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association.

Office of the Comptroller of the Currency

Capital and Liquidity Treatment for Money Market Liquidity Facility and Paycheck Protection Program: Final Rule

November 3, 2020

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (collectively, the agencies) issued a final rule confirming three sets of revisions to the agencies’ regulatory capital and liquidity rules aimed at supporting banks’ originations of Paycheck Protection Program (PPP) loans and participation in the PPP Liquidity Facility and Money Market Liquidity Facility.

Securities and Exchange Commission

SEC Issues Agenda for November 9 Meeting of the Small Business Capital Formation Advisory Committee

November 3, 2020

The Securities and Exchange Commission released the agenda for the November 9, 2020 meeting of its Small Business Capital Formation Advisory Committee (Committee). According to the agenda, the Committee will continue its discussions on how small businesses are coping with the COVID-19 pandemic and share observations from their areas of the marketplace.

International

UK Financial Conduct Authority

FCA Announces Further Proposals to Support Mortgage Borrowers Impacted by Coronavirus

November 2, 2020

The Financial Conduct Authority (FCA) announced it is proposing to enhance measures aimed at providing support to consumers impacted by COVID-19. The FCA is proposing to extend the availability of mortgage payment deferrals to support borrowers who are experiencing payment difficulties because of COVID-19. Those borrowers who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total; those who currently have an initial payment deferral will be eligible for another payment deferral of up to 3 months; and those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months. Under the proposal, borrowers would have until January 31, 2021 to request a payment deferral.