Dodd-Frank News Center

Agencies issue examiner guidance for assessing safety and soundness considering COVID-19

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation, Federal Reserve Board, Office of the Comptroller of the Currency, and National Credit Union Administration, in conjunction with the state bank and credit union regulators, have issued examiner guidance to promote consistency and flexibility in the supervision and examination of financial institutions affected by the COVID-19 pandemic. The interagency guidance instructs examiners to consider the unique, evolving, and potentially long-term nature of the issues confronting institutions due to the COVID-19 pandemic and to exercise appropriate flexibility in their supervisory response.

 

Fed seeks feedback on proposal to expand Main Street Lending Program to nonprofits

This story appeared in Bank Digest.

The Federal Reserve Board will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations. The Fed said that as with the existing Main Street Lending Program, which targets small and medium-sized businesses, the proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the coronavirus pandemic and could benefit from additional liquidity during this period. Feedback may be submitted by email until June 22, 2020.

Fed resumes examination activities for all financial institutions

This story appeared in Bank Digest.

The Federal Reserve Board has announced that it will resume examination activities for all financial institutions, including those with total consolidated assets of less than $100 billion. Having previously reduced its exam activity temporarily in light of COVID-19, the Fed now is of the opinion that banks have had time to implement contingency operating plans and adapt their operations, so exam activity will resume.

At the same time, the Fed anticipates that examination activities, including full-scope examinations, will be conducted offsite until conditions improve to facilitate on-site examinations. Further, the Fed intends to continue working with banks to understand any specific issues they may be facing.

Fed expands Main Street Lending Program

This story appeared in Bank Digest.

Federal Reserve Board has expanded its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support. The changes include: (1) lowering the minimum loan size for certain loans to $250,000 from $500,000; (2) increasing the maximum loan size for all facilities; (3) increasing the term of each loan option to five years (from four years); and (4) extending the repayment period for all loans by delaying principal payments for two years (rather than one).

Fed expands eligibility to use Municipal Liquidity Facility

This story appeared in Bank Digest.

The Federal Reserve Board has expanded the number and type of entities eligible to directly use its Municipal Liquidity Facility. Under the new terms, all U.S. states will be able to have at least two cities or counties eligible to directly issue notes to the MLF regardless of population.

Governors of each state will also be able to designate two issuers in their jurisdictions whose revenues are generally derived from operating government activities to be eligible to directly use the facility. The Fed said that in addition to the expanded terms, the MLF continues to be directly open to U.S. states, the District of Columbia, U.S. cities with a population of at least 250,000 residents, U.S. counties with a population of at least 500,000 residents, and certain multistate entities.

Agencies issue FAQs on CRA consideration for activities in response to COVID-19

This story appeared in Bank Digest.

The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency have issued a set of Frequently Asked Questions on Community Reinvestment Act consideration for activities in response to the Coronavirus Disease (COVID-19). The FAQs provide additional clarification of the information included in the Joint Statement on CRA Consideration for Activities in Response to COVID-19 issued in March 2020.

Fed issues updated report to Congress on FRA 13(3) response to COVID-19

This story appeared in Bank Digest.

The Federal Reserve Board has filed an updated report with Congress pursuant to Section 13(3) of the Federal Reserve Act concerning certain lending facilities established by the Fed in response to economic effects of the COVID-19 pandemic. The Fed is required to submit an initial report regarding each facility established under Section 13(3) and periodic updates at least every 30 days thereafter. The current report provides the second periodic update for: (1) the Primary Dealer Credit Facility; (2) the Commercial Paper Funding Facility; and (3) the Money Market Mutual Fund Liquidity Facility.

Agencies provide temporary changes to supplementary leverage ratio rule

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency have issued an interim final rule providing temporary changes to their supplementary leverage ratio rule. According to the agencies’ joint release, the temporary modifications will provide flexibility to certain depository institutions to expand their balance sheets in order to provide credit to households and businesses in light of the challenges arising from the coronavirus response.

Specifically, the interim final rule permits depository institutions to choose to exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the supplementary leverage ratio. The rule is effective upon publication in the Federal Register and will be in effect through March 31, 2021. Comments on the rule will be accepted for 45 days after its publication in the Federal Register.

 

Fed issues report on economic well-being of U.S. households

This story appeared in Bank Digest.

The Federal Reserve Board has issued its “Report on the Economic Well-Being of U.S. Households in 2019, Featuring Supplemental Data from April 2020.” The report found that financial circumstances were generally positive for most adults at the end of 2019 but that financial conditions changed dramatically for people who experienced job loss or reduced hours during March 2020 as the spread of COVID-19 intensified in the United States.

The report draws from the Fed’s seventh annual Survey of Household Economics and Decisionmaking, which was conducted in October of 2019. To obtain updated information in the midst of closures and stay-at-home orders, a smaller supplemental survey of just over 1,000 adults was conducted from April 3 to April 6 of 2020.

 

Fed updates Municipal Liquidity Facility term sheet

This story appeared in Bank Digest.

The Federal Reserve Board has published updates to the term sheet for the Municipal Liquidity Facility to provide pricing and other information. The MLF was established to offer up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic. The Fed has also issued updated frequently asked questions regarding the MLF.