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Washington insurance commissioner issues order regarding reporting requirements for collecting withheld depreciation payments
On April 27, the Washington insurance commissioner issued Executive Order 20-05 to insurers authorized to transact property and casualty insurance business and all entities regulated by the insurance commissioner. The order extends the deadline for policyholders of property and casualty insurance to report completed repairs in order to claim withheld depreciation payments until at least 60 days after June 26 or the expiration of the governor’s stay at home order, whichever is first.
OCC issues guidance to banks on tracking PPP loan data
On April 27, the OCC issued guidance for banks on receiving credit under the Community Reinvestment Act (CRA) for the loans the banks made to small businesses through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The guidance suggests that lenders should track the PPP loan data, particularly for loans to businesses with $1 million or less in annual revenues that are located in underserved, distressed or low to moderate-income (LMI) areas. The OCC states that tracking this data along with lending decisions and loan volume data “is a prudent banking practice consistent with the principles of safety and soundness and fair access and fair treatment of borrowers.” The SBA’s PPP frequently asked questions can be found here.
Massachusetts Office of Consumer Affairs and Business Regulation issues guidance on reverse mortgages
On April 27, the Massachusetts Office of Consumer Affairs and Business Regulation, Division of Banks, issued guidance relating to compliance with the reverse mortgage counseling requirements under An Act Providing for a Moratorium on Evictions and Foreclosures During the Covid-19 Emergency, which was signed into law and effective on April 20, 2020. The act provides that the in-person counseling requirement under specific provisions of Massachusetts law can alternatively be met by synchronous, real-time video conference or by telephone. The division also provides guidance for counseling options for reverse mortgage counseling, HUD Certificate of HECM counseling, and other reverse mortgage programs.
District of Columbia Department of Insurance, Securities and Banking issues order providing relief to policyholders
On April 27, the District of Columbia Department of Insurance, Securities and Banking issued an order imposing certain requirements on insurance companies authorized to conduct business in the District of Columbia. Among other things, insurance companies and premium finance companies are prohibited from terminating insurance contracts due to non-payment. Insurance companies must make reasonable accommodations for policyholders during the Covid-19 emergency, such as through waiving installment, late payment, or reinstatement fees, extending billing due dates and premium grace periods, and providing an option to use electronic payment technology. The order also provides guidance concerning premium relief and the department’s review of form and rate filings.
Fed revises Municipal Lending Facility to include more cities and counties; extends expiration date
On April 27, the Federal Reserve (Fed) announced it will expand the Municipal Liquidity Facility (MLF) in important ways. As previously covered by InfoBytes, the MLF was established to provide liquidity to state and local governments so they could continue to provide services for their citizens. As when it was established on April 9, the facility will provide up to $500 billion through the purchase of state and county-issued short-term notes, with $35 billion in credit protection provided by the Treasury pursuant to the CARES Act. Revisions to the MLF include lower population thresholds for the facility. Specifically, the facility will purchase notes from counties with at least 500,000 residents, down from the original two million resident threshold, and U.S. cities with a minimum of 250,000 residents, down from the original one million residents threshold. Further, to be eligible for the revised facility, notes must mature within 36 months of issuance—an increase from the previous 24-month maximum maturity term. Issuers must also have had at least two nationally recognized statistical rating firms provide investment grade ratings, as of April 8, 2020. In addition, the Fed extended the termination date for the MLF from September 30 to December 31, 2020.
CFPB outlines lending discrimination warning signs for small businesses applying for PPP loans
On April 27, the CFPB posted a reminder that federal laws such as ECOA protect business owners from discrimination on the basis of protected characteristics when applying for loans under the CARES Act Small Business Administration’s Paycheck Protection Program or other loan programs. The Bureau’s blog post provides several examples of potential lending discrimination warning signs, including (i) being refused for an available loan or workout option even though the business meets the advertised requirements; (ii) being offered credit or workout options with higher rates or worse terms even though the business may be eligible for lower rates; (iii) being discouraged by a lender from applying due to a protected characteristic; (iv) being denied credit without being told why; and (v) receiving negative comments about race, national origin, sex, or other protected characteristics. Lending discrimination complaints may be submitted here, and the Bureau notes that it takes complaint information into account when conducting supervisory and enforcement work.
VA revises lender guidance for borrowers impacted by Covid-19
On April 27, the Department of Veterans Affairs revised Circular 26-20-10, Lending Guidance for Borrowers Affected by Covid-19. The revisions provide that the VA may delegate responsibility to an approved lender to close loans automatically, and that any loan closed under this authority is guaranteed from the date of loan closing. The circular otherwise provides guidance for VA home loan borrowers impacted by Covid-19 and creates temporary measures for loan originating, closing and guarantee. Among other measures, the circular provides that furloughs and other income curtailments as a result of Covid-19 should not be considered a break in employment for underwriting purposes. The circular is effective until July 1, 2023.
NCUA announces grants for minority depository institutions
On April 27, the National Credit Union Administration announced that it is making a total of $125,000 in mentoring grants available to small, low-income credit unions designated as minority depository institutions. Grants will be available in amounts of up to $25,000 and are intended to help recipients establish mentoring programs with larger, low-income designated credit unions that can provide guidance on how to assist low-income and underserved populations.
SBA, Treasury announce guidance on PPP loan processing
On April 26, the Small Business Administration (SBA) updated information regarding the operations of the Paycheck Protection Program (PPP) to supplement an April 24 statement from the SBA and the Department of Treasury (Treasury) announcing that the PPP would restart. Through funding from the PPP and Health Care Enhancement Act signed on April 24, the SBA’s PPP resumed processing loan applications on April 27. The SBA also issued a guidance memo for lenders describing XML file transmission of completed loan applications. The memo advises that lenders may send one bulk submission each of no less than 15,000 loans, which the SBA will process into their E-Tran system. Lenders will then receive one file from the SBA providing loan guarantee numbers and loan amounts for approved applications, as well as a report of loan applications that were not “successfully processed by the SBA loan systems.” The SBA update details additional actions it will take when processing loans, which include: (i) “[p]acing the number of loans processed in the E-Tran system”; (ii) limiting each lender to originating a maximum of 10 percent of the PPP funds available, (iii) “[i]mplementing operational standards to ensure that lenders access PPP funds based on their asset size”; (iv) making certain that applications are processed in the order submitted; and (v) providing guidance to lenders with “a significant amount of loan applications.”
Colorado issues new “safer at home” executive order
On April 26, the Colorado governor issued an executive order that provides new requirements for social distancing and remote work. Among other things, the order directs the Executive Director of the Colorado Department of Public Health and Environment to issue a new or amended public health order that ensures that critical businesses with over 50 employees in any one location follow protocols established by PHO, including symptom screening and temperature check stations. Critical businesses include financial institutions.