Dodd-Frank News Center

Democrats urge McConnell to focus on COVID-19 matters as Senate returns to session

This story appeared in Bank Digest.

A number of Democratic senators, including Senate Minority Leader Chuck Schumer (D-NY), Senate Democratic Whip Dick Durbin (D-Ill), and Senate Finance Committee Ranking Member Ron Wyden (D-Ore), have sent a letter to Senate Majority Leader Mitch McConnell (R-Ky) urging him to make COVID-19-related matters and oversight of all COVID-related legislation the Senate’s focus as it is scheduled to come back into session during the week of May 4, 2020. The senators noted that the Senate is scheduled to return to debate nominations and that there is currently no scheduled COVID-19-related legislative or committee business.

Mnuchin and Carranza issue statement on review of PPP loans

This story appeared in Bank Digest.

Treasury Secretary Steven T. Mnuchin and Small Business Administration Administrator Jovita Carranza have issued a joint statement on the SBA’s Paycheck Protection Program.

In their statement, they said, “We have noted the large number of companies that have appropriately reevaluated their need for PPP loans and promptly repaid loan funds in response to SBA guidance reminding all borrowers of an important certification required to obtain a PPP loan. To further ensure PPP loans are limited to eligible borrowers, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application. Regulatory guidance implementing this procedure will be forthcoming.”

 

 

Fed expands scope and duration of Municipal Liquidity Facility

This story appeared in Bank Digest.

The Federal Reserve Board is expanding the scope and duration of the Municipal Liquidity Facility (MLF), which was announced on April 9, 2020, and will offer up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.

Among other changes, the Fed announced new population thresholds it said will allow substantially more entities to borrow directly from the MLF than the initial plan announced on April 9. The termination date for the facility has been extended to Dec. 31, 2020, in order to provide eligible issuers more time and flexibility.

OCC clarifies guidance on documenting Paycheck Protection Program loans

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has issued a bulletin to clarify its statement in OCC Bulletin 2020-44, which concerned the documentation of Paycheck Protection Program loans and which the OCC is rescinding. In its new guidance, the OCC said that while not requiring banks to obtain or maintain information beyond what exists in the ordinary course of business, the agency is encouraging banks providing loans under the PPP to prudently document their implementation and lending decisions.

In addition, the OCC is encouraging banks to identify and track the PPP loans made to small business borrowers that have annual revenues of $1 million or less and are located in low- to moderate-income areas.

OCC issues guidance on its visitorial authority over banks

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has issued guidance reminding national banks, federal savings associations, and federal branches and agencies of foreign banks that the OCC has exclusive visitorial authority over them, even while it recognizes that a wide range of stakeholders have an interest in the successful implementation of programs established by the federal government in response to the COVID-19 pandemic. The OCC said that unless otherwise authorized by federal law, state and local officials are generally precluded from conducting examinations, requiring the production of banks' books or records, or exercising other visitorial authority with respect to banks.

Fed takes temporary actions to increase availability of intraday credit

This story appeared in Bank Digest.

The Federal Reserve Board has announced temporary actions aimed at increasing the availability of intraday credit extended by Federal Reserve Banks on both a collateralized and uncollateralized basis. The Fed said these temporary actions are consistent with the series of actions it has announced to support the flow of credit to households and businesses and to mitigate the disruptions from COVID-19. These temporary actions will be applied immediately and will remain in effect until Sept. 30, 2020, unless the Fed communicates otherwise prior to that date.

 

Fed outlines public disclosure parameters for lending and liquidity facilities

This story appeared in Bank Digest.

The Federal Reserve Board has outlined the public information it will make available regarding its programs to support the flow of credit to households and businesses and thereby foster economic recovery during the COVID-19 pandemic national emergency. Specifically, the Fed said it will report substantial amounts of information on a monthly basis for the liquidity and lending facilities using Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) funding. The information includes: (1) names and details of participants in each facility; (2) amounts borrowed and interest rate charged; and (3) overall costs, revenues, and fees for each facility.

 

FHFA announces four-month advance obligation limit for loans in forbearance

This story appeared in Bank Digest.

The Federal Housing Finance Agency is aligning the policies of Fannie Mae and Freddie Mac (the Enterprises) regarding servicer obligations to advance scheduled monthly principal and interest payments for single-family mortgage loans. The agency said that once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. This applies to all Enterprise servicers regardless of type or size.

The FHFA is also instructing the Enterprises to maintain loans in COVID-19 payment forbearance plans in mortgage backed security pools for at least the duration of the forbearance plan.

 

McConnell announces CARES Act oversight plans; members of oversight commission named

This story appeared in Bank Digest.

Senate Majority Leader Mitch McConnell (R-KY) has announced that Senate Banking Committee Chairman Mike Crapo (R-Idaho) will lead and coordinate the Senate’s oversight of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). He also announced that Sen. Pat Toomey (R-Pa) will be the Senate majority leader’s appointment to the five-member Congressional Oversight Commission created by the statute.

The Senate majority and minority leaders and the House speaker and minority leader each select one representative on the five-member panel, with the final member—the chair of the commission—selected jointly by the House speaker and Senate majority leader.

In addition, House Speaker Nancy Pelosi (D-Calif) has announced that her appointment to the commission will be Rep. Donna Shalala (D-Fla), and House Minority Leader Kevin McCarthy (R-Calif) has named Rep. French Hill (R-Ark) as his appointee to the commission. Senate Minority Leader Chuck Schumer (D-NY) previously announced plans to appoint Bharat Ramamurti to the commission.

Paycheck Protection Program Liquidity Facility fully operational

This story appeared in Bank Digest. 

The Federal Reserve  Board has announced that its Paycheck Protection Program Liquidity Facility is fully operational and available to provide liquidity to eligible financial institutions. The Small Business Administration's Paycheck Protection Program (PPP) guarantees loans extended by qualified lenders to small businesses so that those businesses can keep workers employed. The Fed said its Paycheck Protection Program Liquidity Facility will support the effectiveness of the PPP by extending credit to financial institutions that make PPP loans, using such loans as collateral.