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PH FedACTion: Financial Regulatory Updates

Daily Financial Regulation Update -- Thursday, December 17, 2020

By
FedACTion Task Force
On Dec 17, 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.

Federal Agencies

Federal Reserve Board

Federal Reserve Issues FOMC statement

December 16, 2020

The Board of Governors of the Federal Reserve System issued a Federal Open Market Committee (FOMC) statement discussing the economic effects of the COVID-19 pandemic and the FOMC’s goals and responses to such effects.

Federal Reserve Announces Extension of its Temporary U.S. Dollar Liquidity Swap Lines and Temporary Repurchase Agreement Facility for Foreign and International Monetary Authorities

December 16, 2020

The Board of Governors of the Federal Reserve System announced the extension of its temporary U.S. dollar liquidity swap lines and the temporary repurchase agreement facility for foreign and international monetary authorities (FIMA repo facility) through September 30, 2021. These facilities were temporarily established in March 2020 to ease strains in global dollar funding markets resulting from the COVID-19 shock and mitigate the effect of such strains on the supply of credit to households and businesses, both domestically and abroad.

Federal Reserve Board and Federal Open Market Committee release economic projections from the December 15-16 FOMC meeting

December 16, 2020

The Board of Governors of the Federal Reserve System and Federal Open Market Committee (FOMC) released a summary of the economic projections made by FOMC participants in conjunction with the December 15-16, 2020 meeting, highlighting the most likely outcomes for real GDP growth, the unemployment rate and inflation.

Federal Deposit Insurance Corporation

FDIC Releases New 2020 Community Banking Study

December 16, 2020

The Federal Deposit Insurance Corporation (FDIC) released a new study on the state of the nation’s community banks. The FDIC’s 2020 Community Banking Study finds community banks played a critical role in providing access to credit in several key areas of the U.S. economy during the COVID-19 pandemic, particularly through lending to support commercial real estate, small businesses and agriculture. The FDIC study found that, relative to the broader banking sector, community banks continued to report positive financial performance during the COVID-19 pandemic. 

Office of the Comptroller of the Currency

OCC Reports Decline in Mortgage Performance due to COVID-19

December 16, 2020

The Office of the Comptroller of the Currency (OCC) reported that the performance of first-lien mortgages in the federal banking system declined during the third quarter of 2020. The OCC Mortgage Metrics Report, Third Quarter 2020 showed that 92.5% of mortgages included in the report were current and performing at the end of the quarter, compared to 96.4% a year earlier. Servicers initiated 369 new foreclosures during the third quarter of 2020, a 48.2% increase from the previous quarter and a 98.3% decrease from a year ago. Events associated with the COVID-19 pandemic, including foreclosure moratoriums, caused significant decreases in such metrics.

FINRA

FINRA Seeks Comment on Lessons from the COVID-19 Pandemic

December 16, 2020

The Financial Industry Regulatory Authority (FINRA) has issued a regulatory notice seeking comment on lessons from the COVID-19 pandemic. FINRA seeks feedback on lessons learned from member firms’ experiences during the COVID-19 pandemic, including the impact of changes made to member firms’ operations and business models, and the effectiveness of business continuity planning. FINRA also requests comment on whether it should consider changes to its rules, operations or administrative processes to address lessons learned during the COVID-19 pandemic or to address anticipated long-term impacts of the pandemic on member firms and investors.

Department of Housing and Urban Development/Federal Housing Administration

FHA Achieves Full FHA Catalyst Digital Claim Submission Capabilities for Single Family Forward Mortgages

December 16, 2020

The Federal Housing Administration (FHA) implemented additional functionality in its FHA Catalyst: Claims Module, achieving full, digital submission capabilities. Servicers submitting claims to FHA for insurance can now use the FHA Catalyst: Claims Module for all 17 Single Family forward mortgage claim types, including FHA’s special COVID-19 National Emergency Standalone Partial Claim and other home retention claim types designed to help homeowners regain sustainable homeownership as they recover from the financial effects of the COVID-19 pandemic.

Federal Housing Finance Agency

FHFA Announces 2021 Affordable Housing Goals for Fannie Mae and Freddie Mac

December 16, 2020

The Federal Housing Finance Agency (FHFA) announced its 2021 affordable housing goals for Fannie Mae and Freddie Mac. Due to the economic uncertainty related to the COVID-19 pandemic, FHFA announced the benchmarks for calendar year 2021 only, and those levels will remain the same as they were for 2018-2020. The current benchmarks were set to expire on December 31, 2020.

Ginnie Mae

Limited Extension to Securitization Deadline for LIBOR Based HECMs due to COVID-19

December 16, 2020

Ginnie Mae published APM 20-12, “Ineligibility of LIBOR Products for Single-Class MBS,” on September 21, 2020. APM 20-12 prohibited the securitization of new LIBOR-Based adjustable rate Home Equity Conversion Loans (HECMs) effective with Home Equity Conversion Mortgage-backed Securities (HMBS) issued on January 1, 2021 or later. Ginnie Mae, after further consideration of the impact of the COVID-19 pandemic on a lender’s ability to close HECM transactions that were initiated prior to the publication of APM 20-12, has extended the deadline for securitization of new LIBOR Based HECMs. Ginnie Mae will restrict the eligibility of new adjustable rate HECMs for securitization into any HMBS pool type that relies on LIBOR, effective with HMBS issued on or after March 1, 2021.

Extension to the Deadline for Submission of Resolution of Board of Directors and Certificate of Authorized Signatures (HUD-11702) Certification and Renewal of Other Master Agreements

December 16, 2020

Ginnie Mae has released an All Participant Memorandum stating that, due to the impact of the COVID-19 pandemic, it is allowing an extension to the usual deadline for the annual submission of form HUD-11702 and renewal of other Master Agreements. The deadline was extended from January 1, 2021 to July 1, 2021.

International

European Commission

Coronavirus Response: Tackling Non-Performing Loans (NPLs) to Enable Banks to Support EU Households and Businesses

December 16, 2020

The European Commission presented a strategy to prevent a future build-up of non-performing loans (NPLs) across the European Union as a result of the coronavirus crisis.

European Banking Authority

EBA Welcomes European Commission’s Action Plan to Tackle NPLs in the Aftermath of the COVID-19 Pandemic

December 16, 2020

The European Banking Authority (EBA) welcomed the European Commission’s comprehensive action plan to tackle the expected rise of non-performing loans (NPLs) on banks’ balance sheets following the outbreak of the COVID-19 pandemic. The action plan requests the EBA’s support to improve data quality and comparability, enhance transparency and market discipline under Pillar 3 rules, and address regulatory impediments to NPL purchases.