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Fed encourages use of discount window
On March 16, the federal bank regulatory agencies issued a statement encouraging depository institutions to use the Federal Reserve’s discount window to meet household and business demands for credit.
Fed encourages banks to use capital and liquidity buffers
On March 15, the Federal Reserve issued a press release that, among other things, encouraged banks to use their capital and liquidity buffers to lend to households and businesses and announced that reserve requirement ratios will be reduced to 0% effective March 26. The Federal Reserve, OCC, and FDIC issued a joint press release on March 17 with the same encouragement.
Fed agencies encourage flexibility in light of Covid-19 crisis
On March 13, the OCC, FDIC, and NCUA issued guidance on March 13 that borrows heavily from the Federal Reserve’s 2013 Guidance SR 13-6 / CA 13-3: Supervisory Practices Regarding Banking Organizations and Their Borrowers and Other Customers Affected by a Major Disaster or Emergency to address how institutions can work prudently with affected customers and how the agencies can provide regulatory relief in a safe and sound manner to institutions.
Releases by the FDIC (FIL-17-2020, OCC (Bulletin 2020-15, and NCUA (Letter 20-CU-02, along with the Fed’s 2013 Guidance all encourage financial institutions to be flexible in working with all borrowers affected by the coronavirus outbreak, with the FDIC especially calling out customers in vulnerable industry sectors such as airlines, energy, travel, tourism, shipping, and small businesses.The guidance suggests the following efforts to aid customers: (i) waiving certain fees (e.g. ATM, overdraft, and late payments); (ii) increasing ATM daily withdrawal limits; (iii) easing restrictions on check-cashing; (iv) increasing credit card limits for creditworthy borrowers; (v) offering payment accommodations (e.g. extending due dates and allowing deferrals); and (vi) working with consumers temporarily unable to work due to business closures, slowdowns, or sickness. The regulators also encourage prudent efforts to modify terms of existing loans, and in the OCC’s guidance, to consider easing terms on new loans in a manner consistent with prudent banking practices.
The regulators stated their intent to work with institutions to reduce the burden of examinations, including making greater use of off-site reviews, and not to assess penalties or take other supervisory actions if institutions are unable to comply with reporting requirements despite reasonable and prudent efforts. The guidance also encourages institutions that need to temporarily close physical locations to offer alternative service options when practical and to notify their primary federal or state regulator and customers about temporary closures and alternative service options as soon as practical.
Fed agencies issue Covid-19 guidance
On March 9, the Federal Reserve, CFPB, FDIC, NCUA, OCC, and CSBS issued a joint release encouraging institutions to “work constructively with borrowers and other customers in affected communities” and stating that “prudent efforts consistent with safe and sound lending practices should not be subject to examiner criticism.” The agencies also acknowledged that institutions would face staffing and other challenges and committed to expedite requests to provide more convenient availability of services and work to minimize the disruption and burden of examinations and inspections.
FFIEC issues Covid-19 guidance
On March 6, the FFIEC issued updated guidance on steps financial institutions should take to minimize adverse effects of a pandemic, particularly with respect to the institution’s business continuity plans.
SEC guidance provides regulatory flexibility for shareholder meetings
On March 13, the SEC issued guidance to assist public companies, investment companies, shareholders, and other market participants affected by Covid-19 with upcoming annual shareholder meetings. According to the SEC, the guidance is intended to facilitate the ability of companies to hold these meetings and engage with shareholders, including through the use of technology, while complying with federal and state securities laws. Specifically, the guidance provides regulatory flexibility to companies seeking to change the date and location of shareholder meetings, such as allowing affected parties to make these announcements in SEC filings without incurring additional costs.
North Carolina Office of Commissioner of Banks communicates on operational changes
On March 17, the North Carolina Office of Commissioner of Banks issued a communication to banks advising them that the OCOB needs to be informed of any changes in operations or services offered.
Michigan Department of Insurance and Financial Services issues message to consumers addressing financial concerns
On March 17, Michigan Department of Insurance and Financial Services Director Anita Fox published a letter to consumers seeking to address financial concerns stemming from the Covid-19 crisis and emergency measures. In the letter, Fox assured consumers that Michigan’s financial institutions are well-positioned to sustain the impacts of the crisis, and reminded consumers that deposits in state’s banks and credit unions are federally insured. Fox also recommended that consumers take advantage of remote banking capabilities and contact their financial institution with any questions pertaining to in-person operations or concerns involving extensions of credit.
Iowa Division of Credit Unions issues update on notifications to close or limit services
On March 17, the Iowa Division of Credit Unions issued an update pertaining to advanced notice for credit unions to limit services or close branches. In response to the Covid-19 crisis, the superintendent announced the standard requirement to notify the division 60 days prior to closures or limitations of services would be relaxed to entail a notification via written email “in a timeframe as practicable as possible.” The update further explained that while no formal form is required, the credit union must provide details pertaining to closures or service limitations, and how it has communicated these changes to its members.
Minnesota Commerce Department provides “work from home” guidance to regulated institutions
On March 17, the Minnesota Commerce Department issued guidance to mortgage originators and servicers outlining the process for temporarily or permanently closing branch offices in Minnesota. For permanent closures, a licensee should file a surrender through NMLS. For temporary closures, the licensee should notify the Department. In addition, if the licensee has individual MLOs working from a home office, they must not have consumers come to the unlicensed location, and the company’s data security standards should be maintained. No physical records should be maintained at the unlicensed location.
Similar “work from home” guidance was provided to industrial loan and thrift companies, licensed non-depository financial institutions, and regulated lenders.