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OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act performance evaluations that were made public in April 2020. Of the 20 evaluations made public, 16 were rated satisfactory and the following four were rated outstanding (links are to the evaluation reports):


Credit limit rule compliance date extended

The Federal Reserve Board has finalized and submitted for publication in the Federal Register a final rule to extend by 18 months the initial compliance dates for certain parts of its single-counterparty credit limit rule. The extension, which is unchanged from the proposal, applies to the combined U.S. operations of foreign banks and provides additional time for foreign jurisdictions' implementation of the standard to become effective. Under the final rule, the largest foreign banks need to comply with the single-counterparty credit limit rule by July 1, 2021, and smaller foreign banks have until January 1, 2022, to comply..


CFPB posts ECOA appraisal factsheets and FAQ

The CFPB has released two factsheets on the ECOA valuation rule that provide information on transaction coverage under the rule and the delivery method and timing requirements for appraisals and other written valuations. A COVID-19-related FAQ on the appraisal rule was also published.


Bureau Fair Lending Report to Congress

The Bureau has released its 2019 Fair Lending Report to Congress that highlights its continued focus of fair lending efforts on mortgage lending, student loans, small business lending and other market areas. It also encouraged consumer-friendly innovation to, among other things, expand access to unbanked and underbanked consumers and their communities.


NCUA seeks CECL exemption

The NCUA reports that NCUA Chairman Hood has written a letter urging the Financial Accounting Standards Board to exempt credit unions from complying with the current expected credit losses methodology, or CECL. Hood noted that the NCUA uses the incurred loss model when it supervises and examines the 5,236 credit unions under its purview for safety and soundness — nearly 70 percent of which are less than $100 million in assets. Hood said that attempting to recognize all expected credit losses is fraught with data collection challenges for the smallest credit unions that the agency supervises.


Fed expands access to PPP Liquidity Facility

The Federal Reserve Board has announced it has expanded access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expanded the collateral that can be pledged. The changes will facilitate lending to small businesses via the Small Business Administration's (SBA) Paycheck Protection Program (PPP). Now, all PPP lenders approved by the SBA, including non-depository institution lenders, are eligible to participate in the PPPLF.

SBA-qualified PPP lenders include banks, credit unions, Community Development Financial Institutions, members of the Farm Credit System, small business lending companies licensed by the SBA, and some financial technology firms. When the PPPLF was first announced, the Federal Reserve said the facility would immediately lend to depository institutions and that non-depository institutions would be added as soon as possible. Additional information is provided in the PPPLF Term Sheet.


Fed broadens Main Street Lending Program

The Federal Reserve Board has announced it is expanding the scope and eligibility for the Main Street Lending Program. As part of its broad effort to support the economy, the Federal Reserve developed the Main Street Lending Program to help credit flow to small and medium-sized businesses that were in sound financial condition before the pandemic. The changes include:

  • Creating a third loan option, with increased risk sharing by lenders for borrowers with greater leverage;
  • Lowering the minimum loan size for certain loans from $1,000,000 to $500,000; and
  • Expanding the pool of businesses eligible to borrow. Businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible, compared to the initial program terms, which were for companies with up to 10,000 employees and $2.5 billion in revenue.

Under the new loan option, lenders would retain a 15 percent share on loans that when added to existing debt do not exceed six times a borrower's income, adjusted for interest payments, taxes, and depreciation and other appropriate adjustments. This compares to the existing loan options where lenders retain a 5 percent share on loans, but have different features. Under all of the loan options, lenders will be able to apply their industry-specific expertise and underwriting standards to best measure a borrower's income. In total, three loan options—termed new, priority, and expanded—will be available for businesses.


FEMA to suspend communities in MO and NE tomorrow

FEMA is publishing in today's Federal Register a final rule identifying communities in Missouri and Nebraska that are scheduled to be suspended on May 1, 2020, from the National Flood Insurance Program for noncompliance with the floodplain management requirements of the program. The affected communities are—

  • the City of Nevada, Vernon County, Missouri
  • the Village of Beaver Crossing, City of Seward, and unincorporated areas of Seward County, Nebraska


Treasury adds option for max PPP loan amount

The Treasury Department is publishing in today's Federal Register an interim final rule authorizing all lenders eligible to originate loans under the Paycheck Protection Program to use an alternative criterion for calculating the maximum loan amount for PPP loans to seasonal employers.

Rather than calculating their maximum loan amount by using their monthly average payments for payroll during "the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower[, March 1, 2019, and ending June 30, 2019" as required in the CARES Act, seasonal employers will have the option of using any consecutive 12-week period between May 1, 2019, and September 15, 2019.


CFPB interprets rescission and appraisal waiver rules

The CFPB has announced an interpretive rule clarifying that consumers financially impacted by the COVID-19 pandemic can exercise their rights to modify or waive certain required waiting periods under the TILA-RESPA Integrated Disclosure Rule and Regulation Z rescission rules. The interpretive rule also states that the COVID-19 pandemic is an "example of an extraordinary event beyond the control of any interested party, and thus is a changed circumstance" that may permit the use of revised estimates of affected closing costs.

The Bureau also issued an FAQ that explains that consumers affected by the COVID-19 pandemic may use the waiver of the requirement for delivery of an appraisal at least three days before closing to expedite access to credit.


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