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PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update - Wednesday, July 8, 2020

By
FedACTion Task Force
On Jul 08, 2020

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Click here to read more from our Coronavirus series.

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 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. House of Representatives

Committee on Small Business

Subcommittee Hears Testimony on Small Business Supply Chains

July 7, 2020

The House Committee on Small Business’ Subcommittee on Economic Growth, Tax and Capital Access (Subcommittee) heard testimony from small business owners and experts about the impact of COVID-19 on small business supply chains. The hearing, chaired by Congressman Brad Schneider (D-IL), was designed to give members the chance to examine the nature of current supply chains, how they are being disrupted by the COVID-19 pandemic, and what Congress can do to encourage supply chain resiliency moving forward.

Federal Agencies

Department of the Treasury

Mnuchin Issues Statement on Title IV CARES Act Loans to Major Airlines

July 7, 2020

Steven Mnuchin, Secretary of the U.S. Department of the Treasury (Treasury), issued a statement on loans to passenger air carriers under Title IV of the CARES Act. Secretary Mnuchin stated that “Treasury’s authority under the CARES Act to provide up to $25 billion in liquidity to passenger air carriers … will help preserve America’s aviation industry,” and noted that numerous airlines have now signed letters of intent setting out the terms upon which they would receive CARES Act loans from Treasury.

Federal Reserve Board

Quarles Delivers Speech on Too-Big-to-Fail and Post-Crisis Reforms

July 7, 2020

Randal K. Quarles, Vice Chair for Supervision of the Federal Reserve, delivered via webcast a speech entitled “Global in Life and Orderly in Death: Post-Crisis Reforms and the Too-Big-to-Fail Question”, to members of the Exchequer Club in Washington, D.C.

Federal Reserve Bank of New York

FRBNY Publishes Blog Post on Federal Reserve Balance Sheet

July 7, 2020

The Federal Reserve Bank of New York (FRBNY) published a Liberty Street Economics blog post entitled “A New Reserves Regime? COVID-19 and the Federal Reserve Balance Sheet” which examines the increase in reserves between March 2020 and June 2020 in response to the COVID-19 pandemic, and describes changes to the distribution and concentration of reserves.

Financial Stability Oversight Council

Treasury Announces FSOC Meeting

July 7, 2020

The U.S. Department of the Treasury (Treasury) announced that on Tuesday, July 14, 2020, Treasury Secretary Steven T. Mnuchin will preside over an executive meeting of the Financial Stability Oversight Council (FSOC) via telephone. The preliminary meeting agenda includes an update on COVID-19-related market developments, a discussion of secondary mortgage market liquidity and an update on Federal Reserve stress tests.

Financial Crimes Enforcement Network

FinCEN Issues Advisory on Imposter Scams and Money Mule Schemes

July 7, 2020

The Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions to potential indicators of imposter scams and money mule schemes, two forms of consumer fraud being observed during the COVID-19 pandemic. The advisory contains descriptions of such scams and schemes, possible financial red flag indicators for both, and information on reporting such suspicious activity.

International

European Commission

Commission’s Forecast Predicts Deeper Recession with Wider Divergences

July 7, 2020

The European Commission (Commission) released its Summer 2020 Economic Forecast (Forecast), which predicts that the European Union (EU) economy will experience a deep recession in 2020 due to the COVID-19 pandemic, despite the swift and comprehensive policy response at both EU and national levels. According to the Forecast, because the lifting of lockdown measures is proceeding at a more gradual pace than assumed in the Commission’s Spring 2020 Forecast, the impact on economic activity in 2020 will be more significant than previously anticipated.

European Banking Authority

EBA Issues Report Clarifying Implementation of Guidelines Addressing COVID-19 Policies

July 7, 2020

The European Banking Authority (EBA) published a report (Report) designed to provide clarity regarding its guidelines on legislative and non-legislative moratoria on loan repayments (Guidelines), and other COVID-19-related policies. The EBA published the Guidelines, which encouraged institutions to grant payment holidays to customers, on April 2, 2020. In the Report, the EBA addresses a number of interpretative questions regarding the Guidelines, and presents an overview of the general payment moratoria in place in the European Union.

Bank of England Prudential Regulatory Authority

PRA Issues Statement to Insurers on Matching Adjustment during COVID-19

July 7, 2020

The Bank of England’s Prudential Regulation Authority (PRA) issued a statement designed to provide clarifications regarding the PRA’s policy regarding the matching adjustment (MA) during COVID-19. The MA allows firms to adjust the relevant risk-free interest rate term structure for the calculation of a best estimate of a portfolio of eligible insurance obligations.