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Treasury issues final rule supporting the Covid-19 response

Federal Issues Department of Treasury DFPI Covid-19 California State Issues

Federal Issues

On January 6, the U.S. Treasury Department issued the final rule for the State and Local Fiscal Recovery Funds (SLFRF) program, which was established under the American Rescue Plan Act, and has delivered approximately $350 billion to state, local, and Tribal governments for Covid-19 pandemic relief. According to Treasury, the “SLFRF program ensures governments have the resources needed to respond to the pandemic, including providing health and vaccine services, supporting families and businesses struggling with the pandemic’s economic impacts, maintaining vital public services, and building a strong and equitable recovery.” Highlights of the final rule include providing additional clarity and flexibility for recipient governments by, among other things: (i) expanding the list of eligible uses for funds; (ii) increasing support for public sector hiring and capacity; (iii) streamlining options to provide premium pay for essential workers; and (iv) broadening eligible water, sewer, and broadband infrastructure projects. The rule is effective April 1, 2022.

The same day, the California Department of Financial Protection and Innovation (DFPI) announced that its efforts to spur mortgage servicers’ participation in the California Mortgage Relief Program, which is funded by Treasury under the American Rescue Plan Act, has “helped forge a national model to protect homeowners impacted by the COVID-19 pandemic.” According to the announcement, among other things, DFPI “issued a historic reporting requirement for residential mortgage servicing licensees to report how they would be protecting homeowners through increased mortgage relief staffing, mitigation efforts such as repayment plans, and state and federal mortgage relief funding,” and “encouraged mortgage lenders and servicers to work with affected customers and communities to avoid foreclosures.”

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