InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
SBA creates website for federal disaster loans
On March 20, the Small Business Administration created a new website for businesses, private nonprofits, homeowners, and renters to apply for disaster loans in connection with Covid-19. The website identifies eligible disaster areas and provides links to apply online and check application status.
Fed announces international coordinated liquidity international action
On March 20, the Federal Reserve Board announced a coordinated action with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank “to further enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements” To achieve this, the central banks have agreed to increase the frequency of 7-day maturity operations from weekly to daily starting March 23 and continuing through April. The central banks also will continue to hold weekly 84-day maturity operations.
SCOTUS extends filing deadline
On March 19, the U.S. Supreme Court issued an order extending the deadline to file any petition for a writ of certiorari due on or after the date of the order “to 150 days from the date of the lower court judgment, order denying discretionary review, or order denying a timely petition for rehearing.” Motions for extensions of time pursuant to Rule 30.4 will ordinarily be granted as a matter of course if the difficulties relate to Covid-19 and if the length of extension requested is reasonable under the circumstances. The Clerk will also entertain motions to delay the distribution of petitions for writs of certiorari where the petitioner’s grounds for additional time to file a reply are due to difficulties related to Covid-19. These modifications should indicate whether the opposing party has an objection. The Court emphasizes that these modifications—which will remain in effect until further order of the Court—do not apply to cases that have been granted certiorari or where a direct appeal or an original action has been set for argument.
FDIC asks FASB to delay CECL rules due to Covid-19
On March 19, the FDIC sent a letter to the Financial Accounting Standards Board (FASB) encouraging FASB to delay transitions to and exclusions from certain accounting rules, including (i) excluding Covid-19-related modifications from being considered a concession when determining a troubled debt restructuring classification; (ii) permitting financial institutions an option to postpone implementation of the current expected credit losses (CECL) methodology given the current economic environment; and (iii) imposing a moratorium on the effective date for institutions that are not currently required to implement CECL to allow these financial institutions to focus on immediate business challenges relating to the impacts of Covid-19. CSBS issued a statement on March 20 announcing it fully supports the FDIC’s request, stating the delay will give banks additional time to focus on their customers.
Fed agencies discuss CRA considerations in response to Covid-19
On March 19, the FDIC, Federal Reserve Board, and the OCC issued a joint statement encouraging financial institutions to work with low and moderate-income customers and communities who may be adversely affected by Covid-19. The agencies state that they will provide favorable CRA consideration for financial institution’s retail banking services and retail lending activities in their assessment areas that respond to the needs of affected low and moderate-income individuals, small businesses, and small farms consistent with safe and sound banking practices. These activities may include: (i) waiving certain fees; (ii) easing check-cashing restrictions; (iii) expanding the availability of short-term, unsecured credit and increasing credit card limits for creditworthy borrowers; (iv) providing alternative service options; and (v) offering payment accommodations, such as permitting deferred or skipped payments or extending payment due dates to avoid delinquencies and negative credit bureau reporting. Financial institutions that engage in qualifying community development (CD) activities will also receive favorable CRA consideration, including but not limited to loans, investments, or services that support digital access for low and moderate-income individuals or communities, as well as economic development activities that sustain small business operations. In addition, favorable consideration will also be given to CD activities that help to stabilize communities affected by Covid-19 located in a broader statewide or regional area that encompasses a financial institution’s CRA assessment area, “provided that such institutions are responsive to the CD needs and opportunities that exist in their own assessment area(s).” The joint statement is effective until six months after the national emergency declaration is lifted, unless extended by the agencies.
Fed agencies issue capital and liquidity buffers FAQs
On March 19, the FDIC, the Fed, and the OCC released FAQs regarding the use of capital and liquidity buffers. (See OCC Bulletin 2020-17, “Pandemic Planning: Joint Questions and Answers Regarding Statement About the Use of Capital and Liquidity Buffers.”) The joint questions and answers follow a joint statement issued by the agencies on March 17 to encourage banks to utilize capital and liquidity buffers in order to continue lending activities. The FAQs were created in response to questions provided by banking organizations. Topics covered in the FAQs include (i) liquidity buffers; (ii) capital buffers; (iii) triggers for recovery and resolution plans; and (iv) “total loss-absorbing capacity rule.” See the FDIC announcement here and FIL-20-2020 here.
FDIC posts Covid-19 FAQs for bankers and bank customers
On March 19, the FDIC issued FIL-18-2020, which highlights frequently asked questions for bank customers and banks affected by Covid-19. The FAQs, are available on the FDIC’s Covid-19 webpage. Bank customer FAQs cover questions regarding (i) deposit insurance; (ii) customer access to money; (iii) tips for avoiding scams; and (iv) identity theft, among other things. The FAQs for financial institutions cover topics including working with borrowers affected by Covid-19 through payment accommodations, reporting delinquent loans, and operational issues affecting institutions.
Fed agencies issue regulatory capital interim rule
On March 19, the OCC, the Fed, and the FDIC announced the release of an interim final rule for the Money Market Mutual Fund Liquidity Facility (MMLF) which revises capital rules for activities with the MMLF. The agencies issued the rule to enable financial institutions to “effectively use” the MMLF following its launch by the Fed on March 18. Pursuant to the Federal Reserve Act, the Fed granted authority to establish the MMLF to the Federal Reserve Bank of Boston, allowing it to provide “non-recourse loans to eligible institutions” secured by assets those institutions buy from money market mutual funds. The rule will allow financial institutions to participate because activities with the MMLF will “neutralize the regulatory capital effects of participating in the program” on the institution. The rule is effective immediately and there will be a 45-day comment period.
Fed announces temporary swap lines with nine countries
On March 19, the Federal Reserve announced the establishment of temporary U.S. dollar liquidity arrangements (swap lines) with the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank (Denmark), the Bank of Korea, the Banco de Mexico, the Norges Bank (Norway), the Reserve Bank of New Zealand, the Monetary Authority of Singapore, and the Sveriges Riksbank (Sweden). These facilities are designed to “help lessen strains in global U.S. dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad.”
CFPB announces consumer financial resources for Covid-19 pandemic
On March 24, the CFPB announced the resources available on the Bureau’s website to assist consumers in protecting their personal finances during the Covid-19 pandemic. According to Director Kathy Kraninger, the Bureau “want[s] consumers to know the various steps they can take to help themselves or a loved one, both in the short and long term. Our resources address situations ranging from consumers having difficulty paying their bills or meeting other financial obligations to consumers experiencing a loss of income to avoiding scams.” Resources also include links detailing how consumers who experience problems with financial products or services can file effective complaints, what steps consumers can take to protect older adults, and how consumers can protect their credit during the pandemic. The Bureau will continue to update the website regularly with additional Covid-19 related content.