Dodd-Frank News Center

Rep. Tlaib asks Fed Chair about support for companies who are laying off workers

This story appeared in Bank Digest.

Rep. Rashida Tlaib (D-Mich) has sent a letter to Fed Chair Jerome Powell requesting clarity on why the Fed is financially “propping up firms that endanger the health of Americans, while failing to sufficiently help cities and municipalities in dire need.” She referenced a report released by the House Select Committee on the Coronavirus showing that the Fed’s Secondary Market Corporate Credit Facility (SMCCF) portfolio included the bonds of 95 companies that paid out dividends to their shareholders even as the companies laid off everyday workers, including $15 million worth of Marathon Petroleum corporate bonds. Rep. Tlaib states that this stance is incongruous with the Fed's mandate to maximize employment.

FHFA extends COVID-related loan flexibilities

This story appeared in Bank Digest.

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will extend several loan origination flexibilities until Nov. 30, 2020, to ensure continued support for borrowers during the COVID-19 national emergency. These include: alternative appraisals on purchase and rate term refinance loans; alternative methods for documenting income and verifying employment before loan closing; and expanding the use of power of attorney to assist with loan closings. The flexibilities were set to expire on Oct. 31, 2020.

Quarterly report to Congress issued on pandemic recovery

This story appeared in Bank Digest.

The Office of the Special Inspector General for Pandemic Recovery, established by Section 4018 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), has issued its Quarterly Report to Congress. The Special Inspector General has the duty to conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments made by the Secretary of the Treasury under any program established by the Secretary under Division A of the CARES Act, as well as the management by the Secretary of any program established under Division A of the CARES Act.

 

Members of Congress offer help to investigate PPP loan fraud

This story appeared in Bank Digest.

A bipartisan group of 23 members of Congress have sent a letter to the Small Business Administration and the Treasury Department asking what tools and resources SBA may need, that Congress could provide through appropriations and statutory authority, to be able to fully investigate PPP loan fraud. The letter follows a report published by the SBA Inspector General in July 2020 that stated there are “strong indicators of widespread potential fraud” within two of the fiscal relief programs enacted and expanded by Congress to provide relief to small businesses as they face the economic crisis brought upon by the COVID-19 pandemic.

Treasury and SBA questioned about PPP loan forgiveness applications

This story appeared in Bank Digest.

Four Democratic members of Congress have sent a letter to the Department of Treasury and the Small Business Administration (SBA) urging them to provide an update on Paycheck Protection Program (PPP) loan forgiveness applications. The Treasury Department and the SBA have received nearly 100,000 applications for PPP loan forgiveness. The letter expresses disappointment in the lack of PPP loan forgiveness approvals and requested more information about the delays, stating “this is far too long for borrowers and lenders to be sitting waiting on updated information—and leaves them in an unnecessarily difficult position.”

Treasury’s Crowley issues statement marking CARES Act anniversary

This story appeared in Bank Digest.

Assistant Secretary of the Treasury for Public Affairs Monica Crowley has released a statement on the sixth month anniversary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, noting, “In record time, Treasury helped to launch the Paycheck Protection Program by the Small Business Administration, which supported over 5.2 million small businesses and an estimated 51 million jobs with more than $525 billion in critical funds; issued 160 million Economic Impact Payments to the American people; and disbursed $150 billion to state, local and tribal governments to assist with COVID-19-related expenses.”

 

FHFA extends COVID-related forbearance and loan processing flexibilities

This story appeared in Bank Digest.

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will extend buying qualified loans in forbearance and several loan origination flexibilities until Oct. 31, 2020, to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on Sept. 30, 2020.

 

Banking Committee holds latest quarterly CARES Act hearing

This story appeared in Bank Digest.

The Senate Banking Committee held its latest quarterly CARES Act hearing in which the Committee heard testimony from Treasury Secretary Steven T. Mnuchin and Federal Reserve Board Chair Jerome H. Powell. In his opening statement, Committee Chairman Mike Crapo (R-Idaho) noted, “There has been significant interest in exploring ways that the Main Street Lending Program, which offers financial support to smaller and medium-sized businesses and nonprofits, can be improved to expand its access and utilization.” Sen. Sherrod Brown (D-Ohio), the Committee’s Ranking Member, said, “We need an economic rescue package for everyone, help to keep families in their homes, and to protect workers at their jobs, help for seniors and veterans and students who are at risk. And we need it fast.”

Quarles addresses Institute of International Bankers

This story appeared in Bank Digest.

Federal Reserve Board Vice Chair for Supervision Randal K. Quarles has delivered remarks at the 2020 Virtual D.C. Summit of the Institute of International Bankers. His speech, “Optimism in the time of COVID,” addresses the global economy as well as the U.S. economy and its outlook. The speech also addresses the new long-run monetary policy strategy recently announced by the Federal Open Market Committee, and financial stability and regulatory issues. Quarles spoke about some of the implications of the COVID event for banks and for financial stability, noting that while large U.S. banks entered this crisis in strong condition, the Fed has taken a number of steps to help bolster banks’ resilience. He also stated that nonbank financial firms, especially those engaged in liquidity transformation, experienced acute strains in March. Quarles has put together a senior group of market regulators and central bank governors to develop a holistic review of the March stresses in nonbank finance.

Fed Chair testifies at Coronavirus subcommittee hearing

This story appeared in Bank Digest.

The Select Subcommittee on the Coronavirus Crisis has held a hybrid hearing on Sept. 23, 2020, to examine the current state of the job market, the federal government’s economic recovery efforts during the coronavirus crisis, how the crisis has exacerbated inequality, and the need for additional fiscal stimulus. Fed Chair Jerome H. Powell submitted his testimony on the Fed’s efforts to alleviate the economic fallout of the ongoing pandemic.