Dodd-Frank News Center

Financial Services Committee hears from Treasury, Fed Chairs on economic recovery efforts

This story appeared in Bank Digest.

The House Financial Services committee has held a hybrid full Committee hearing entitled, “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response.” Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both testified on the Administration’s ongoing response to the COVID-19 pandemic and efforts to rebuild the economy.

 

Financial Services Committee hears from FHFA Director on agency response to pandemic

This story appeared in Bank Digest.

The House Financial Services committee has held a hearing examining the Federal Housing Finance Agency’s response to the COVID-19 pandemic, especially with regard to Freddie Mac and Fannie Mae. FHFA Director Mark A. Calabria testified at the hearing about his agency’s regulatory oversight over Fannie Mae and Freddie Mac and discussed the possibility of releasing Fannie and Freddie from FHFA conservatorship, but not by the end of 2020. Calabria discussed his agency's policy response to the pandemic, especially protections put into place to support of renters and homeowners struggling to pay for housing due to the pandemic. Committee Chair Maxine Waters (D-Calif) noted that Housing and Urban Development Secretary Ben Carson was also supposed to appear at the hearing but could not attend.

 

Financial Services Committee considers need state and local pandemic relief

This story appeared in Bank Digest.

The House of Representatives Financial Services Committee has held a virtual hearing on Sept. 10, 2020, examining the need for additional aid for state and local governments. Several governors submitted statements for the hearing, explaining the costs state governments have faced in fighting the COVID-19 pandemic. Overall state spending needs are expected to increase considerably, while the economic recession caused by COVID-19 has led to a sharp decline in sales tax and other critical sources of state government revenue. According to the committee Memorandum, funds allocated under the Coronavirus Aid, Relief and Economic Security (CARES Act) “are insufficient to address the challenges state and local governments face.” On April 11, the National Governors Association issued a bipartisan statement calling for Congress to pass $500 billion in additional assistance.

 

Democrats accuse CFPB of failing to make borrowers aware of mortgage relief options

This story appeared in Bank Digest.

Senate Banking Committee members have sent a letter to CFPB Director Kathleen Kraninger regarding what they term as the agency’s failure to use its authority to ensure that borrowers are aware of the mortgage relief options they are legally entitled to during the COVID-19 pandemic. The Senators’ cite the recently released Fannie Mae’s National Housing Survey, which found that 56 percent of borrowers surveyed that made less than $50,000 were not familiar with the mortgage relief options under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The letter accused the Bureau of not meeting its duty and authority “to take actions that ensure families can stay in their homes and prevent a series of irreversible foreclosures” and “coddling the largest banks and mortgage servicers while doing virtually nothing to help borrowers.”

CFPB Blog post explains Economic Impact Payments for new dependents

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has written a blog post describing how to claim economic impact payments for new dependents. In April, the IRS began issuing Economic Impact Payments (EIP) to provide financial relief during the coronavirus pandemic. The blog post describes how to receive the payment for new qualifying dependents, and notes that the process for qualifying, including when payments are received and how much is received, depends on if the child was born in 2019 or 2020.

Congressional Progressive Caucus wants ‘substantial’ changes to MLF

This story appeared in Bank Digest.

Congressional Progressive Caucus Co-Chairs Reps. Mark Pocan (D-Wis) and Pramila Jayapal (D-Wash) released a statement in response to the Federal Reserve’s announcement about revised pricing for its Municipal Liquidity Facility (MLF) (see 2020 No. 3337) asking the Fed to implement additional substantial changes to the MLF. While stating that the lowering penalty rates “was a needed step in the right direction,” the members of Congress said that the change “is insufficient to prevent more layoffs and economic turmoil.” According to the statement, for the MLF “to be an effective tool in our economic recovery, the Fed should align assistance to states and cities with its emergency lending offered to the private sector and extend the maturity period of the loans.” The statement follows a letter sent by the Caucus to Fed Chairman Jerome H. Powell, asking for improvements to the MLF to improve its usefulness to states and cities.

Fed announces revised pricing for its Municipal Liquidity Facility

This story appeared in Bank Digest.

The Federal Reserve Board has announced revised pricing for its Municipal Liquidity Facility (MLF), which reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes. The changes will ensure the MLF continues to provide an effective backstop to assist U.S. states and local governments as they weather the pandemic.

Fed provides update on Outstanding Lending Facilities

This story appeared in Bank Digest.                                  

The Federal Reserve Board has filed a periodic report providing updates pursuant to Section 13(3) of the Federal Reserve Act concerning a lending facility 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. This report provides the first periodic update on the Nonprofit Organization New Loan Facility and the Nonprofit Organization Expanded Loan Facility and the next periodic update on the Primary Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Term Asset-Backed Securities Loan Facility, the Municipal Liquidity Facility, the Paycheck Protection Program Liquidity Facility, the Main Street New Loan Facility, the Main Street Expanded Loan Facility, and the Main Street Priority Loan Facility. 

 

OCC clarifies rules regarding withdrawals from CIFs

This story appeared in Bank Digest.

The Special Inspector General for Pandemic Recovery (SIGPR), created by the CARES Act, has submitted a 60-day report, highlighting the work of the Office of Investigations. The report included three recommendations: the Treasury Department has already agreed to the first and will include SIGPR in the list of entities entitled to “timely and unrestricted access” to information from the borrower; SIGPR also recommended that Congress take up the Special Inspector General for Pandemic Recovery Expedited Hiring Authorities Act of 2020 (S. 3751), sponsored by Senator Grassley; and that Congress consider the various CARES Act relief programs, how they overlap, whether the overlap is in the public interest, and whether legislative clarification is warranted.

Fed extends liquidity swap lines and repurchase agreement facility

This story appeared in Bank Digest.

The Federal Reserve Board has extended its temporary U.S. dollar liquidity swap lines and its temporary repurchase agreement facility for foreign and international monetary authorities (FIMA repo facility) through March 31, 2021. These facilities were 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. According to the Fed, the extensions of these facilities will help sustain recent improvements in global U.S. dollar funding markets by maintaining these important liquidity backstops.