Washington Report 360 | April 10, 2020

Key highlights

• The FRB announced new credit facilities, including one to support the SBA’s new Paycheck Protection Program, one to support states and municipalities, and two under the Main Street Lending Program. The facilities draw on funding provided by the Treasury through the CARES Act.
• The Federal Reserve Bank of New York opened registration for the FRB’s Commercial Paper Funding Facility; the program will commence April 14.
• Regulatory focus on implementing the CARES Act provisions through amendments to regulatory capital, Community Bank Leverage Ratio, and loan modifications and forbearance; additional focus on strengthening conduct and controls seen in SEC and FINRA Regulation BI releases. 
• Growing focus on loan modifications and loss mitigation, directing servicers and financial institutions to support borrowers and comply with consumer protection laws.

Financial services regulatory and policy news

Banking

• Federal banking agencies (FRB, FDIC, OCC):
  • Issued an interim final rule amending the regulatory capital rules for the PPPLF and PPP loans
    FRB, FDIC, OCC, April 9, 2020
  • Announced changes to the community bank leverage ratio
    FRB, FDIC, OCC, April 6, 2020
  • Encouraged mortgage servicers to work with struggling homeowners
    FRB, FDIC, OCC, CFPB, NCUA, Conference of State Bank Supervisors, April 3, 2020
  • Issued a revised statement on loan modifications and COVID-19
    FRB, FDIC, OCC, CFPB, NCUA, CSBS, April 7, 2020
• FRB:
  • Announced new credit facilities, including a PPP liquidity facility and the main street lending program
    FRB, April 9, 2020
  • Temporarily modified growth restrictions on a large bank to expand credit support for small businesses
    FRB, April 8, 2020
• CFPB:
  • Released a video on obtaining mortgage forbearance due to COVID-19
    CFPB, April 3, 2020
  • Released its FY19 Office of Servicemember Affairs Annual Report
    CFPB, April 3, 2020

Capital Markets

• SEC:
  • Adopted enhanced standards for central counterparties and central securities depositories
  • SEC, April 9, 2020
  • Provided temporary conditional exemptive relief for BDCs regarding investments in small- and mid-sized businesses
    SEC, April 8, 2020
  • Adopted offering reforms for BDCs and registered closed-end funds
    SEC, April 8, 2020
  • Published risk alerts setting expectations for inspections on compliance with Reg BI and Form CRS
    SEC, April 7, 2020
• FINRA:
  • Aligned with SEC on examinations for compliance with Reg BI and Form CRS
    FINRA, April 8, 2020
  • Proposed a rule change to address brokers with a significant history of misconduct
    FINRA, April 3, 2020
  • Highlighted firm practices observed in Reg BI preparedness reviews
    FINRA, April 8, 2020

Other

• Treasury and SBA publish PPP lender application for nonbanks
  Treasury, SBA, April 8, 2020
• FinCEN provided guidance on BSA/AML issues and COVID-19
  Treasury, FinCEN, April 3, 2020
• FRBNY opened registration for the CPFF; announced April 14 launch
  Federal Reserve Bank of New York, April 6, 2020
• Federal Reserve Banks published the Small Business Credit Survey: 2020 Report on Employer Firms
  FRB NY, April 7, 2020
• ARRC announced spread adjustment methodology for cash products and SOFR
  ARRC, FRB NY, April 8, 2020
• BIS and IOSCO deferred final implementation phases for margin requirements for non-centrally cleared derivatives
  BIS, IOSCO, April 3, 2020

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