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ph fedaction financial regulatory updates

Daily Financial Regulation Update -- Wednesday, September 30, 2020

September 30, 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.

Federal Agencies

U.S. Department of the Treasury

Remarks on COVID Response by Deputy Secretary Justin Muzinich at the 2020 U.S. Treasury Market Conference

September 29, 2020

Justin Muzinich, Deputy Secretary of the U.S. Department of the Treasury (Treasury), gave remarks at the 2020 U.S. Treasury Market Conference. His remarks addressed three areas:

(i) the unprecedented demand for liquidity at the start of the COVID-19 crisis that disrupted the Treasury market;

(ii) broader policy responses by the Treasury and the Federal Reserve in response to COVID-19; and

(iii) questions he believes are important to study in order to inform future policy.

Federal Reserve Board

Federal Reserve Board, FDIC and OCC Adopt Two Final Rules to Increase Household and Business Liquidity

September 29, 2020

The Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency finalized two regulations to facilitate liquidity and increase the flow of credit to households and business sectors affected by the COVID-19 crisis.

The first final regulation temporarily defers appraisal and evaluation requirements for up to 120 days after the closing of certain residential and commercial real estate transactions. The rule temporarily defers appraisal and evaluation requirements, permitting individuals and businesses the ability to facilitate real estate transactions. The rule will be effective upon publication in the Federal Register and will expire on December 31, 2020.

The second final regulation addresses the regulatory capital and liquidity effects for banks that participate in certain Federal Reserve liquidity facilities, such as the Paycheck Protection Program Liquidity Facility and the Money Market Mutual Fund Liquidity Facility. The final regulation neutralizes regulatory and liquidity requirements for participants in such facilities, as they face no credit or market risk in association with exposures pledged to such facilities. The effective date of the final rule is 60 days after publication in the Federal Register.

Federal Reserve Board Releases September 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices

September 29, 2020

The Board of Governors of the Federal Reserve System conducted a supplementary Senior Loan Officer Opinion Survey on Bank Lending Practices to understand the experiences of U.S. banks with the Main Street Lending Program (Program). The survey consisted of a set of questions that focused on four areas: (i) commercial and industrial loan inquiries and banks’ participation in the Program since mid-June 2020, when lender registration started; (ii) banks’ outlook regarding their participation in the Program; (iii) factors that may have shaped banks’ willingness to participate in the Program; and (iv) characteristics of borrowers inquiring and receiving Program loans.

Federal Reserve Bank of New York

The New York Fed DSGE Model Forecast—September 2020

September 29, 2020

The Federal Reserve Bank of New York’s (New York Fed) Liberty Street Economics blog released a post titled “The New York Fed DSGE Model Forecast-September 2020.” The blog post presents an update of the economic forecasts generated by New York Fed’s dynamic stochastic general equilibrium (DSGE) model addressing the economic disruptions caused by COVID-19 which are likely different from standard business cycles. As a result, the DSGE model now includes additional shocks designed to reflect phenomena like lockdowns and social distancing. The authors describe their forecast and its change since June 2020.

Financial Crimes Enforcement Network

Prepared Remarks of FinCEN Director Kenneth A. Blanco on FinCEN’s Response to COVID-19

September 29, 2020

Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco delivered remarks at the ACAMS AML Conference. He discussed trends that FinCEN is observing related to COVID-19 and related frauds, and provided an update on FinCEN’s efforts in other key areas, including combatting cyber threats, FinCEN’s work in the virtual currency space, and FinCEN’s recent rulemakings.

International

Bank of England

Bank of England’s Money and Credit Statistical Release - August 2020

September 29, 2020

The Bank of England (BoE) released its Money and Credit statistical release for August 2020. According to the release, net consumer credit borrowing remained positive in August at £0.3 billion, following a £1.1 billion increase in July 2020. The interest rate on interest-charging overdrafts increased 4.2 percentage points to 19.00% in August, while the rate on new consumer credit borrowing increased 7 basis points to 4.71%. Net mortgage borrowing was £3.1 billion in August, similar to July. Mortgage approvals for house purchase increased to 84,700, the highest since October 2007. Effective mortgage interest rates were broadly unchanged.