Washington Report 360 | May 29, 2020

Highlights

• Ongoing attention to the Paycheck Protection Program with the release of interim final rules governing the loan forgiveness process and legislation in the House that would modify terms of the program including extending the covered period from 8 to 24 weeks, changing the payroll restrictions from 75 percent to 60 percent, and increasing the loan term from two to five years. The legislation has moved to the Senate for consideration.
• Focus on FRB’s Main Street Lending Program with release of lender and borrower forms and agreements by the Federal Reserve Bank of Boston; the launch date has not been announced but is expected within the next week.
• SEC highlights that one or more ESG issues can be material to investment decisions but cautions on a single combined rating/score.
• Fannie Mae and Freddie Mac launched websites containing their LIBOR Transition Playbook and FAQs to help lenders and investors plan for the shift to alternative reference rates, including discontinuing LIBOR-indexed products by the end of 2020. 

Financial services regulatory and policy news

Banking 

• Federal banking agencies (FRB, OCC, FDIC):
  • Issued FAQs on CRA consideration for activities in response to COVID-19
• FRB:
  • Released forms and agreements, and FAQs, for the Main Street Lending Program (through Boston Fed)
• FDIC:
  • Extended by 30 days the comment period on its proposal to establish a supervisory framework for industrial loan companies and industrial banks
• OCC:
  • Issued interim final rule permitting banks telephonic and electronic participation at all board, shareholder, and member meetings
• CFPB:
  • Released two No-Action Letter Templates, one for mortgage servicers’ loss mitigation program and one for depository institutions’ small-dollar credit products

Capital Markets

• SEC:
  • The Asset Management Advisory committee met to discuss private investments and ESG issues; caution expressed re: composite ESG ratings or scores
  • Division of Investment management issued a Staff Statement on control-share acquisition statutes
• CFTC:
  • Approved the extension of the compliance date for margin requirements for uncleared swaps; Proposed exemption from registration for certain foreign persons acting as commodity pool operators
• FINRA:
  • Proposed temporary rules providing itself relief from certain timing, method of service, and other procedural requirements during COVID-19

Other

• Congress:
  • House passed a bill to amend the Paycheck Protection Program; bill moves to Senate for consideration
• SBA & Treasury:
  • Published a new FAQ on lender submission of Form 1502
  • Announced $10 billion of PPP funding will be set aside for community development financial institutions
• FHFA:
  • Announced Fannie Mae and Freddie Mac launched new LIBOR transition resource websites
• ARRC:
  • Published best practices to assist market participants preparing for the cessation of U.S. dollar LIBOR
• BIS & FSB:
  • Policymakers met with the private sector and discussed importance of stress tests concerning banks’ asset quality and lending capacity

Industry news

• NYSE’s floor reopens with masks, coronavirus waivers and handshake ban
• Mortgage credit tightens, creating drag on any economic recovery
• Millions of PPP loan-forgiveness requests are about to rain on banks
• Questions persist after release of new small-business loan rules
• Coronavirus: Life on the front lines of the federal small business loan program
• Pot banking rules grow hazier during pandemic
• Leveraged loans dodge existential threat In New York court (judge dismissed claims that leveraged loans were securities)

Related content