Dodd-Frank News Center

Fed encourages institutions to consider participating in COVID-19 relief programs

This story appeared in Bank Digest.

The Federal Reserve Board has informed financial institutions it supervises about several forms of relief available to small businesses affected by COVID-19 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748). The Fed is encouraging financial institutions to consider participating in programs administered by the Small Business Administration and programs offered by the Treasury Department. The Fed said its examiners will not criticize supervised institutions that prudently use these programs.

 

Agencies modify community bank leverage ratio framework

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency have issued two interim final rules to provide temporary relief to community banking organizations. According to the agencies' joint release, they are acting to implement Section 4012 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748), which requires the agencies to temporarily lower the community bank leverage ratio to 8 percent.

The two rules will modify the community bank leverage ratio framework so that: (1) beginning in the second quarter 2020 and until the end of the year, a banking organization that has a leverage ratio of 8 percent or greater and meets certain other criteria may elect to use the community bank leverage ratio framework; and (2) community banking organizations will have until Jan. 1, 2022, before the community bank leverage ratio requirement is re-established at greater than 9 percent.

The changes will be effective as of the publication of the rules in the Federal Register, and the agencies will accept comments on the interim final rules for 45 days after publication.

• Regulatory Capital Rule: Temporary Changes to the Community Bank Leverage Ratio Framework
• Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework

CFPB issues policy statement on credit reporting responsibilities during COVID-19 pandemic

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers' making payments, and the CFPB's statement underscores that consumers benefit if lenders report accurate information about these arrangements to credit bureaus.

The Bureau issued the policy statement in light of the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748), which provides critical emergency assistance to consumers and businesses affected by COVID-19 and includes provisions addressing consumer reporting requirements.

Fed announces temporary change to supplementary leverage ratio rule

This story appeared in Bank Digest.

To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations' ability to provide credit to households and businesses, the Fed is implementing a temporary change to its supplementary leverage ratio rule. According to the Fed's press release, the change would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies and will be in effect until March 31, 2021.

The change is effective immediately, and the public comment period will be 45 days.

Agencies clarify interaction of CECL revised transition and CARES Act relief

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency have issued a joint statement clarifying the interaction of their Current Expected Credit Loss (CECL) revised transition and the statutory relief afforded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748).

On March 27, 2020, the agencies issued an interim final rule (CECL IFR) that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The CARES Act was also signed into law on that day, and it provides banking organizations with optional, temporary relief from complying with CECL.

Under the agencies' joint statement, no banking organization is required to comply with CECL during the statutory relief period in the CARES Act, including banking organizations that otherwise would be required to adopt CECL in 2020 under U.S. generally accepted accounting principles. In addition, banking organizations that elect to use the CARES Act's relief may also elect the regulatory capital relief provided under the CECL IFR after the expiration of the statutory relief period.

Fed informs institutions of CISA guidance on essential critical infrastructure workers

The Federal Reserve Board has issued a letter informing financial institutions it supervises and their service providers that the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) has identified essential critical infrastructure workers in the financial services sector. These workers are identified in the document "Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response."

The Fed said that CISA, in collaboration with other federal agencies and the private sector, developed an initial list of essential critical infrastructure workers to help state and local officials in their work to protect their communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.

Fed announces reporting relief in light of COVID-19 disruptions

This story appeared in Bank Digest.

The Federal Reserve Board has announced that it will not take action against a financial institution with $5 billion or less in total assets for submitting its March 31, 2020, Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) or Financial Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding Companies (FR Y-11) after the official filing deadline, as long as the applicable report is submitted within 30 days of the official filing due date. The Fed is offering this reporting relief in recognition that small financial institutions may need additional time to submit certain regulatory reports in light of staffing priorities and disruptions caused by the Coronavirus Disease 2019 (COVID-19). Previously, the federal financial institution regulators and state regulators offered similar reporting relief to financial institutions affected by COVID-19 for their March 31, 2020, Consolidated Reports of Condition and Income (Call Reports).

Fed provides additional information on supervisory activities during coronavirus pandemic

This story appeared in Bank Digest.

The Federal Reserve Board has provided additional information to financial institutions on how its supervisory approach is adjusting in light of the coronavirus. Among other items, the Fed said that to minimize disruption and to focus on outreach and monitoring, it will temporarily reduce its examination activities, with the greatest reduction in activities occurring at the smallest banks.

In addition, the Fed said that large banks should still submit their capital plans developed as part of the Comprehensive Capital Analysis and Review (CCAR) by April 6, 2020, and that additional time will be granted for resolving non-critical existing supervisory findings.

Fed delays implementation of changes to Payment System Risk Policy

This story appeared in Bank Digest.

The Federal Reserve Board is delaying by six months the implementation date of changes to Part II of its Policy on Payment System Risk related to procedures for determining the net debit cap and maximum daylight overdraft capacity of a U.S. branch or agency of a foreign banking organization. The changes were approved in April 2019 and were initially scheduled to become effective on April 1, 2020, but because of challenges posed by the coronavirus, the Fed is delaying implementation until Oct. 1, 2020.

 

Financial Services Committee Democrats Release Coronavirus Stimulus Package

This story appeared in Bank Digest.

House Financial Services Committee Chairwoman Maxine Waters (D-Calif) has led committee Democrats in releasing the Financial Protections and Assistance for America's Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321), which is intended to provide a comprehensive stimulus and public policy response to the coronavirus pandemic.

In a statement, Waters said, "Last week, we outlined a comprehensive plan to address the needs of hardworking and vulnerable Americans who may face financial hardship as a result of this devastating pandemic. Today, I am proud to lead my colleagues in releasing a package of more than 40 bills to implement this plan, including my legislation to provide up to $2,000 a month for most adults and $1,000 for each of their children during the pandemic."

But in a statement opposing this package, Committee Ranking Member Patrick McHenry (R-NC) said, "Over the last several days, I have worked with Senate Republicans, the Administration-and our Democrat colleagues-to craft a bipartisan bill that would provide necessary support to those on the frontlines of this fight. Senate Democrats, at the behest of Speaker Pelosi, have now voted twice against this vitally important package. Instead, they are pursuing a 1,400-page grab-bag of progressive policy goals that has little to do with the crisis at hand and absolutely no chance of becoming law."