Insight

Washington Report 360 | January 8, 2021

COVID-19 relief; SBA PPP; Congress approved NDAA; CFPB recommendations to improve consumer protections; Focus on digital asserts;

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Amy S. Matsuo

Regulatory and ESG Insights Leader, KPMG US

+1 919-664-7100

The Consolidated Appropriations Act, 2021 became law on December 27, 2020, including certain COVID-19 relief and response measures such as reactivating the PPP and terminating certain FRB emergency credit programs.
SBA released interim final rules and other guidance to implement reactivation of the PPP; more guidance is yet to come.
Congress voted to override the President’s veto of the National Defense Authorization Act, enacting provisions that comprehensively amend the BSA/AML/CFT frameworks, including reporting and data repository requirements for beneficial ownership information.
A CFPB Taskforce on Consumer Financial Law published a report of 100 recommendations for improving consumer protections, including one suggestion that the CFPB license non-depository financial companies; OCC released a statement agreeing that fintech firms require a national charter but stating the OCC should be the licensing agency.
Focus on digital assets seen in releases from OCC, SEC, and FinCEN.
Shift to the Biden Administration and Democratic control of Congress will likely focus financial services regulators on increased enforcement, climate risk-related policies, and expanded access to the financial system; rulemakings not yet effective may be halted or delayed, and the Congressional Review Act may be used to nullify rulemakings finalized in the last few months.

Banking

Federal banking agencies (FRB, OCC, FDIC):
- Extended temporary relief under Regulation O and the FDIC’s Part 363 for extensions of credit to certain investment funds
FRB:
- Affirmed the Countercyclical Capital Buffer at the current zero percent level

OCC:
- Clarified institutions’ authority to use stablecoins to conduct payment activities
- Finalized updates to its “Activities and Operations” regulation
- sIssued an interpretative letter regarding preemption
FDIC:
- Published guidance on the FDIC’s reservation of authority to require compliance with Part 363 when asset growth is related to mergers and acquisitions
CFPB:
- Released Taskforce recommendations on improvements to consumer protection in the financial marketplace
- Issued a final rule implementing FDCPA requirements regarding certain disclosures for consumers
- Issued an advisory opinion on ECOA/Regulation B and special purpose credit programs

Capital Markets

SEC:
- Requested comment on the custody of digital asset securities by special purpose broker-dealers
- Proposed amendments to Rule 144 and Form 144 to reduce risk of unregistered distributions
- Adopted a modernized marketing rule for investment advisors
- Announced the creation of the security-based swaps joint venture, led by the Divisions of Examination and Trading and Markets
CFTC:
- Issued temporary relief for certain SOFR-linked investments and daily reporting for derivatives clearing organizations
FINRA:
- Proposed amendments to its Consolidated Audit Trail Compliance Rule
- Requested comment on potential enhancements to TRACE reporting of U.S. Treasury securities
- Proposed extending the implementation of amendments to its Margin Requirements rule

Other

Congress:
- Passed, and the President signed, the Consolidated Appropriations Act, 2021
- Voted to override the President’s veto of the National Defense Authorization Act
Treasury/FinCEN:
- Proposed an AML rule that would establish reporting, recordkeeping, and verification requirements for certain convertible virtual currency and digital asset transactions
SBA:
- Released interim final rules and guidance to implement reactivation of the PPP
- Extended the deadline to apply for the EIDL program for COVID-19
FHFA:
- Extended the COVID-19 multifamily forbearance though March 2021
FRBNY:
- Released a whitepaper on the looming “eviction cliff” in New York City