Daily Financial Regulation Update -- Tuesday, August 17, 2021

August 17, 2021

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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 the full text of the American Rescue Plan of 2021, Enacted March 11, 2021.

Click here to view the full text of the PPP Extension Act of 2021, Enacted March 30, 2021.

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.

Federal Agencies

U.S. Department of the Treasury

Treasury Announces Fossil Fuel Energy Guidance for Multilateral Development Banks

August 16, 2021

The U.S. Department of the Treasury (Treasury) issued Fossil Fuel Energy Guidance for Multilateral Development Banks (MDBs), which is key guidance in response to President Biden's Executive Order 14008 on Tackling the Climate Crisis At Home and Abroad announced earlier this year. In the guidance, Treasury advocates for MDB investments prioritizing clean energy, innovation and energy efficiency.

Federal Reserve Bank of Boston

Paper: A New Look at Racial Disparities Using a More Comprehensive Wealth Measure

August 16, 2021

The Federal Reserve Bank of Boston issued a paper titled "A New Look at Racial Disparities Using a More Comprehensive Wealth Measure." The paper finds that when the measure of wealth includes two major retirement resources – defined benefit pension assets and Social Security wealth – the wealth gaps between white families and Black and other minority families narrow substantially. The paper also finds that when the analysis includes these resources, the white-Black racial wealth gap shows little if any growth over the last three decades. However, white families, on average, still have approximately three times as much wealth as Black families.

Federal Deposit Insurance Corporation

FDITECH Launches New Sprint to Measure and Test Bank Operational Resiliency

August 16, 2021

The Federal Deposit Insurance Corporation announced a new tech sprint designed to determine how well community banks, and the banking sector as a whole, can withstand a major disruption of any type. The tech sprint is intended to be the first of several focused on how to foster stronger resiliency in banking.

Office of the Comptroller of the Currency

Liquidity: Updated Comptroller's Handbook Booklet and Rescissions

August 16, 2021

The Office of the Comptroller of the Currency (OCC) issued an updated "Liquidity" booklet of the Comptroller's Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations and federal branches and agencies of foreign banking organizations.

Bank Accounting Advisory Series Updated

August 16, 2021

The Office of the Comptroller of the Currency (OCC) released an update to the Bank Accounting Advisory Series (BAAS). The current edition of the BAAS reflects updates to accounting standards issued by the Financial Accounting Standards Board on such topics as amortization of premiums on callable debt securities and evaluating goodwill impairment triggering events for private companies. Additionally, the current edition includes answers to frequently asked questions from the industry and bank examiners.

U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission and the European Central Bank Sign Memorandum of Understanding Regarding Cooperation with Respect to Security-Based Swap Entities

August 16, 2021

The U.S. Securities and Exchange Commission and the European Central Bank (ECB) announced the signing of a Memorandum of Understanding (MOU) to consult, cooperate and exchange information in connection with the supervision, enforcement and oversight of certain security-based swap dealers and major security-based swap participants that are registered with the SEC and supervised by the ECB. This is the first MOU between the SEC and ECB. The MOU is intended to facilitate the SEC's oversight of all SEC-registered security-based swap entities in EU Member States participating in the Single Supervisory Mechanism, the system of banking supervision in the European Union. It is composed of the ECB and the relevant national competent authorities of participating EU Member States.

FINRA

New FINRA Report: Diversity of Cloud Computing Models among Broker-Dealers Raises Opportunities and Challenges for the Securities Industry

August 16, 2021

The Financial Industry Regulatory Authority issued a report titled "Cloud Computing in the Securities Industry." The report was issued by FINRA's Office of Financial Innovation following a review of nearly 40 broker-dealer firms, cloud service providers, industry analysts and technology consultants, to better understand the implications of cloud computing on the securities industry.

Federal Housing Finance Agency

Advisory Bulletin: Agency Commercial Mortgage-Backed Securities Risk Management

August 16, 2021

The Federal Housing Finance Agency (FHFA) released an Advisory Bulletin which provides FHFA guidance regarding Federal Home Loan Banks' investments in Agency Commercial Mortgage-Backed Securities (CMBS) issued and guaranteed by either the U.S. Government (Ginnie Mae) or by Fannie Mae or Freddie Mac. The guidance recommends risk management practices, including the establishment of certain limits, to address the risks associated with unexpected prepayments of Agency CMBS investments.

Advisory Bulletin

International

European Commission

Commission Gives Green Light to New Synthetic Securitization Product under the European Guarantee Fund to Further Support SMEs Affected by the COVID-19 Outbreak in 22 Member States

August 16, 2021

The European Commission announced that it approved, under European Union State aid rules, the introduction of a new product in the form of guarantees on synthetic securitization tranches under the European Guarantee Fund managed by the European Investment Bank Group (consisting of the European Investment Bank and the European Investment Fund) to support companies affected by the COVID-19 outbreak in the 22 participating Member States. With an envisaged dedicated budget of €1.4 billion, the new product is expected to mobilize at least €13 billion of new lending to small and medium-size enterprises affected by the outbreak.