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CFPB outlines regulatory flexibility related to Covid-19
On March 26, the CFPB announced several regulatory flexibility measures to help financial companies work with consumers affected by Covid-19. Specifically, the measures postpone certain industry data collections on Bureau-related rules. These include:
- HMDA. Quarterly information reporting by certain mortgage lenders as required under HMDA and Regulation C will not be expected during this time. However, entities should continue collecting and recording HMDA data in anticipation of making annual submissions. Entities will be provided information by the Bureau on when and how to commence new quarterly HMDA data submissions. (See statement here.)
- TILA. During this time, annual submissions required under TILA, Regulation Z, and Regulation E “concerning agreements between credit card issuers and institutions of higher education; quarterly submission of consumer credit card agreements; collection of certain credit card price and availability information; and submission of prepaid account agreements and related information” will not be expected. (See statement here.)
- Section 1071. A survey seeking information from financial institutions on the cost of compliance in connection with pending rulemaking on Section 1071 of the Dodd-Frank Act has been postponed. As previously covered by InfoBytes, under the terms of a stipulated settlement resolving a 2019 lawsuit that sought an order compelling the Bureau to issue a final rule implementing Section 1071, the Bureau agreed to outline a proposal for collecting data and studying discrimination in small-business lending.
- PACE Financing. A survey of firms providing Property Assessed Clean Energy (PACE) financing to consumers for the purposes of implementing Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act has been postponed.
- Supervision and Enforcement. The Bureau’s policy statement provides “that it does not intend to cite in an examination or initiate an enforcement action against any entity for failure to submit to the Bureau” specified information related to credit card and prepaid accounts. However, the Bureau’s announcement advises entities to “maintain records sufficient to allow them to make delayed submissions pursuant to Bureau guidance.” With respect to operational challenges facing institutions due to Covid-19, the Bureau states that it will work with institutions when scheduling examinations and other supervisory activities to minimize disruption and burden. “[W]hen conducting examinations and other supervisory activities and in determining whether to take enforcement action, the Bureau will consider the circumstances that entities may face as a result of the [Covid-19] pandemic and will be sensitive to good-faith efforts demonstrably designed to assist consumers,” the announcement states.
Fed extends small financial institutions' filing deadline
On March 26, the Federal Reserve (Fed) announced that it will not take action against small financial institutions that miss the deadline for filing their March 31 “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).” Pursuant to the Fed’s guidance, small financial institutions with $5 billion or less in assets must file their financial statements within 30 days of the official deadline. The Fed also encouraged institutions to communicate with their Reserve Bank if they anticipate the need for additional time to file their statements. As previously covered by InfoBytes, the federal regulatory agencies issued a similar 30-day grace period for institutions that must submit call reports.
Federal Reserve Board delays changes to provision of intraday credit to foreign banks
On March 24, the Federal Reserve Board announced that it will delay planned revisions to their procedures that govern providing intraday credit to U.S. branches of foreign banking organizations. The amendments were originally approved on April 1, 2019, and were scheduled to become effective on April 1, 2020. The FRB is delaying implementation for six months, until October 1, 2020, to provide foreign banking organizations and the Federal Reserve Banks allow additional time to allow both the with additional time to focus on “heightened priorities” instead of establishing new arrangements to comply with the proposed amendments.
Federal Reserve Board files reports with Congress on newly established lending facilities
On March 25, the Federal Reserve Board filed three reports to Congress pursuant to Section 13(3) of the Federal Reserve Act on the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, and the Money Market Mutual Fund Liquidity Facility. Each report provides Congress with details on the facilities, including the structure and basic terms of the facilities. The announcement of the lending facilities was previously covered here.
NCUA issues FAQs regarding Covid-19 and credit union operations
On March 25, the National Credit Union Administration (NCUA) issued FAQs regarding the impact of Covid-19 on the NCUA and credit union operations. The FAQs answer questions regarding, among other things, flexibility for federal credit unions in planning annual meetings and monthly board of director meetings, restrictions on access to or closure of facilities, the impact of Covid-19 on the NCUA’s examination and supervision program, and deadlines for submission of certain filings (e.g., Call Reports, annual capital plan and/or stress testing, Bank Secrecy Act reports).
OCC issues bulletin to community banks on filing of Call Reports
On March 25, the OCC issued Bulletin 2020-24, which encourages institutions to file March 31 call reports by the filing deadline, but recognizes that Covid-19-related disruptions may cause filing delays. As such the OCC will not take action against institutions affected by Covid-19 for submitting in good faith the March 31 call report within 30 days of the filing deadline. Further, institutions may amend the filing to correct for unintentional and incidental reporting errors within 30 days of the filing deadline without penalty. Institutions affected by Covid-19 that expect a delay in their March 31 call report submission or anticipate challenges in obtaining director attestations before submission of the call report are encouraged to contact their supervisory office.
New York Fed releases FAQs on the Commercial Paper Funding Facility
On March 25, the Federal Reserve Bank of New York released FAQs to address programmatic inquiries about the newly-created Commercial Paper Funding Facility (CPFF), which will provide a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle (SPV). The FAQs address, among other things, how the CPFF will work, when the CPFF will become operational, which issuers will be eligible to sell commercial paper to the SPV, whether issuers are required to register with the CPFF, and what types of commercial paper will be eligible for purchase by the SPV.
FFIEC issues statement regarding Call Report filing delays
On March 25, the FFIEC issued a statement providing that the federal banking agencies will not take action against any institution for submitting March 31, 2020, Reports of Condition and Income (Call Reports) after the respective filing deadline, as long as the report is submitted within 30 days of the official filing date. Institutions are encouraged to contact their primary federal regulator in advance of the official filing date if they anticipate a delayed submission.
Freddie Mac issues bulletin on servicing requirements and relief related to Covid-19
On March 25, Freddie Mac released Bulletin 2020-7, which sets forth servicing requirements and relief related to Covid-19 for Freddie Mac servicers. The bulletin does the following: (i) requires servicers to report to Freddie Mac any borrower who has a Covid-19 related hardship using a specific default reason code; (ii) provides temporary relief from certain property inspection and property preservation requirements; (iii) clarifies requirements for streamlined Flex Modification evaluations for borrowers with a Covid-19-related hardship, including outreach techniques; (iv) extends the current reporting deadline for annual certifications and delivery of financials from March 31, 2020, to April 30, 2020; (v) provides guidance on the use of electronic records and signatures in connection with the origination and closing process; and (vi) sets forth expectations regarding seller and servicer business continuity plans.
Fannie, Freddie develop payment deferral program
On March 25, Fannie Mae announced the release of a new payment deferral program developed with Freddie Mac at the direction of the FHFA. Fannie Mae issued Lender Letter LL-2020-05 and Freddie Mac issued Bulletin 2020-6 to introduce the new workout option which “enables servicers to assist eligible borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current.” The lender letter and the bulletin cover, among other things: (i) criteria necessary to be eligible for a payment deferral; (ii) terms of payment deferral; (iii) steps to complete a payment deferral; (iv) applicable fees; (v) reimbursement for expenses; and (iv) servicer incentive fees. Servicers may begin to evaluate borrowers for the deferral payment program on July 1, but no later than January 1, 2021.