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Daily Financial Regulation Update -- Saturday, January 16, 2020

January 16, 2021

By Paul Hastings Professional

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Click here to read more from our Coronavirus series.

Major Developments

President-Elect Biden Releases $1.9 Trillion Coronavirus Plan

January 14, 2021

President-elect Biden announced the $1.9 trillion American Rescue Plan focused on
(i) mounting a national vaccination program, containing the spread of COVID-19, and safely reopening schools; (ii) delivering immediate relief to working families affected by the COVID-19 crisis; and (iii) supporting communities that are struggling in the wake of COVID-19. The plan also will provide emergency funding to upgrade federal information technology infrastructure and address the recent breaches of federal government data systems.

Congress

Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), Enacted March 27, 2020.

Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.

Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.

Click here to view the full text of the Consolidated Appropriations Act, 2021, Enacted December 27, 2020.  

Click here to view a running list of proposed legislation 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

Senators Object to the VA’s COVID-19 Veterans Assistance Partial Claim Payment Program Proposal

January 15, 2021

Senators Sherrod Brown (D-OH), presumed incoming chair of U.S. Senate Committee on Banking, Housing, and Urban Affairs, Jack Reed (D-RI), presumed incoming chair of the U.S. Senate Committee on Armed Services, and Jon Tester (D-MT), presumed incoming chair of the U.S. Senate Committee on Veterans’ Affairs, sent a letter to the Department of Veterans Affairs (VA) expressing concern about the proposed COVID-19 Veterans Assistance Partial Claim Payment program. The lawmakers said that, as proposed, the program could add additional debt for military borrowers exiting forbearance, raise monthly costs and cause military borrowers to pay hundreds or thousands of dollars more than other borrowers.

Senator Brown Applauds Biden Economic Rescue Package

January 14, 2021

U.S. Senator Sherrod Brown (D-OH), presumed incoming chair of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, released a statement supporting President-elect Biden’sCOVID-19 economic rescue package.

Committee on Small Business and Entrepreneurship

Senators Rubio, Cotton, and Colleagues Seek to Preclude PPP Loans to Planned Parenthood Facilities

January 15, 2021

U.S. Senators Marco Rubio (R-FL) and Tom Cotton (R-AR) sent a letter urging U.S. Small Business Administration (SBA) Administrator Jovita Carranza to attempt to prevent the SBA from extending Second Draw Paycheck Protection Program loans to Planned Parenthood affiliates.

U.S. House of Representatives

Committee on Financial Services

Committee Releases Report on 2020 Activities

January 15, 2021

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee (Committee), released a report on the Committee’s work during the second session of the 116th Congress. The report summarized that during the COVID-19 crisis, the Committee sought relief and protections to individuals, families and small businesses across the nation.

Congresswoman Waters Urges President-Elect Biden to Issue Presidential Memorandum to Suspend Midnight Rulemakings

January 14, 2021

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, sent another letter to President-elect Joseph R. Biden urging that the Biden Administration issue a Presidential memorandum on January 20 to temporarily suspend any end of term regulations promulgated by the Trump Administration. The Biden Transition team had already indicated that it would be issuing such a moratorium to review regulations issued at the end of the Trump Administration, according to media reports.

Federal Agencies

Federal Reserve Board

Ten Days Late and Billions of Dollars Short: The Employment Effects of Delays in Paycheck Protection Program Financing

January 15, 2021

The Board of Governors of the Federal Reserve System released a paper titled “Ten Days Late and Billions of Dollars Short: The Employment Effects of Delays in Paycheck Protection Program Financing.” According to the authors, delay in the provision of Paycheck Protection Program (PPP) loans due to insufficient initial funding under the CARES Act substantially and persistently reduced employment. The authors’ estimates imply the PPP saved millions of jobs but larger initial funding could have saved millions more, particularly if it had been directed toward the smallest firms. About half of the jobs lost to insufficient PPP funding are lost in firms with fewer than 10 employees, despite such firms accounting for less than 20% of employment.

Federal Reserve Bank of New York

U.S. Economy in a Snapshot – January 2021

January 15, 2021

The Federal Reserve Bank of New York released analysis titled “U.S. Economy in a Snapshot,” based on data released through January 15, 2021. According to the analysis, consumer spending fell in November 2020, the first decline since April 2020. Real expenditures on goods fell more than spending on services. Overall spending was down 2% over the 2020 year, with purchase of goods up 7% and those for services down 7%.

Blog: Discretionary and Nondiscretionary Services Expenditures during the COVID-19 Recession

January 15, 2021

The Federal Reserve Bank of New York’s Liberty Street Economics blog issued a post titled “Discretionary and Nondiscretionary Services Expenditures during the COVID-19 Recession.” In the post, the author examines the extraordinary impacts of the coronavirus pandemic, and the various measures used to address it, through the lens of personal consumption expenditures on discretionary and nondiscretionary services.

U.S. Securities and Exchange Commission

What's Happening from Start-Up to Small Cap: SEC’s Small Business Advocate to Host Capital Call on February 4, 2021

January 15, 2021

The U.S. Securities and Exchange Commission’s Office of the Advocate for Small Business Capital Formation will host its second annual Capital Call on February 4, 2021 at 1 p.m. Eastern. During the virtual event, office staff members will discuss what has been happening with capital raising across the country, including a spotlight on the impacts of the COVID-19 pandemic, the unique challenges faced by underrepresented businesses and the policy recommendations the office has developed in response.

U.S. Small Business Administration

SBA OIG Inspection of SBA's Implementation of the Paycheck Protection Program

January 15, 2021

The Office of Inspector General (OIG) of the U.S. Small Business Administration (SBA) issued an inspection report presenting the results of the OIG’s assessment of the SBA’s implementation of the Paycheck Protection Program, including the timing of implementation, lender participation, guidance provided to lenders and staff, timeliness of loan approval and disbursement and systems used to process lender loan approvals. 

Ginnie Mae

The Ginnie Mae Global Market Analysis Report – January 2021

January 15, 2021

Ginnie Mae released its Global Market Analysis Report for January 2021. According to the report, although the COVID-19 pandemic created substantial stress for the economy, the mortgage market has performed reasonably well. Lower rates improved payment affordability and widespread availability of forbearance under the CARES Act allowed borrowers impacted by COVID-19 to pause their monthly payments without damaging their credit history. The report also outlines Ginnie Mae’s actions to promote stability during the COVID-19 pandemic.

International

Bank of England Prudential Regulation Authority

UK Deposit Takers Supervision Annual Conference for CEOs of the Non-Systemic UK Banks and Building Societies

January 15, 2021

On December 14, 2020, Melanie Beaman, Director of UK Deposit Takers Supervision hosted a webinar for the Chief Executive Officers of the Non-Systemic UK Banks and Building Societies. The webinar provided highlights and trends from COVID-19 data collection and focused on credit risk.