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05/21/2020

Re-proposed capital rule for Fannie and Freddie

The FHFA has announced that it is seeking comments on a notice of proposed rulemaking that establishes a new regulatory capital framework for Fannie Mae and Freddie Mac. The proposed rule is an enhancement of the proposal published in July 2018. Comments will be due 60 days after the notice is published in the Federal Register.

05/21/2020

Fed CRA evaluation ratings

Our monthly check of the Federal Reserve Board's listing of CRA evaluation ratings reveals that 14 ratings were made public in April. All of those ratings were Satisfactory, except for the evaluation of Eagle Bank, Bethesda, Maryland, whom we congratulate for its Outstanding rating.

05/21/2020

CFPB extends comment period on FDCPA proposal

The CFPB has published [85 FR 30890] a notice that it is extending the comment period on its proposal to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), to require debt collectors to make certain disclosures when collecting time-barred debts. Comments will now be accepted through August 4, 2020.

05/21/2020

SBA extends deadline again

The Small Business Administration has updated its PPP FAQ yet again, adding question 48 to indicate it has extended the deadline for lenders to file the initial SBA Form 1502 to the later of May 29, 2020, or 10 calendar days after disbursement or cancellation of the PPP loan. The FAQ doesn't say so, but the reason for the extension (from the current deadline of May 22) is that the SBA hasn't yet finalized and published Form 1502.

Starting April 15, 2020, the SBA and Treasury have issued 12 interim final rules implementing the Paycheck Protection Program:

  • 4/15/20: 85 FR 20811 - Adding the PPP to SBA's 7(a) Loan Program (SBA)
  • 4/15/20: 85 FR 20817 - Additional guidance regarding the application of certain affiliate rules (SBA)
  • 4/20/20: 85 FR 21747 - Additional PPP eligibility criteria and requirements for certain pledges of PPP loans.(SBA)
  • 4/28/20: 85 FR 23450 - Information on requirement for promissory notes, authorizations, affiliation and eligibility (SBA)
  • 4/30/20: 85 FR 23917 - Authority for lenders to use alternative criterion for calculating maximum loan amount (seasonal workers) (Treasury)
  • 5/04/20: 85 FR 26324 - Limits on PPP loans to corporate groups and guidance on non-bank lender participation (SBA)
  • 5/04/20: 85 FR 26321 - Requirements on disbursements (SBA)
  • 5/08/20: 85 FR 27287 - Nondiscrimination obligations and additional eligibility criteria (SBA)
  • 5/19/20: 85 FR 29845 - Extending the safe-harbor date by which certain borrowers must repay loans to 5/14/20 (SBA)
  • 5/19/20: 85 FR 29842 - Guidance on the ability to increase certain PPP loans (SBA)
  • 5/19/20: 85 FR 29847 - Guidance on additional eligibility requirements for electric cooperatives (SBA)
  • 5/21/20: 85 FR 30835 - Treatment of entities with foreign affiliates (SBA)

05/21/2020

OCC finalizes CRA rule without FDIC and Fed

The OCC has announced its release of a final rule strengthening and modernizing the agency’s regulations under the Community Reinvestment Act (CRA).

The OCC reported it made several changes to its December 2019 proposal that respond to stakeholders’ comments, including:

  • Clarifying the importance of the quantity and quality of activities as well as their value.
  • Increasing credit for mortgage origination to promote availability of affordable housing in low- and moderate-income areas.
  • Clarifying credit for athletic facilities to ensure they benefit and support low- and moderate-income communities.
  • Deferring establishment of thresholds for grading banks’ CRA performance and delineating banks’ deposit-based assessment areas until the OCC assesses improved data required by the final rule.

The final CRA rule applies to national banks and savings associations, which, according to the OCC, conduct the majority of all CRA activity. The rule will become effective October 1, 2020, with a compliance date of January 1, 2023. Small and intermediate banks have until January 1, 2024, to comply with requirements involving assessment area, data collection and recordkeeping.

The FDIC, which had issued a proposal for CRA modernization jointly with the OCC in December 2019, issued a statement by Chairman Jelena McWilliams that the FDIC "is not prepared to finalize the CRA proposal at this time." The Federal Reserve Board has not issued a proposal to amend its current CRA regulations.

05/20/2020

Credit card debt and coronavirus relief

The CFPB has posted an article, "Credit card debt during coronavirus: Relief options and tips." The article is a guide to help consumers understand their options during the COVID-19 pandemic when they are unable to handle their credit card debt.

05/20/2020

Winners of FinCEN's BSA Awards program

FinCEN has announced the award recipients of the 2020 FinCEN Director’s Law Enforcement Awards Program who will be publicly identified in an official ceremony on October 29, 2020 in Washington, DC.

The annual program recognizes law enforcement agencies that used Bank Secrecy Act (BSA) reporting to successfully pursue and prosecute criminal investigation in seven categories:

  • SAR Review Task Force - Federal Bureau of Investigation
  • Significant Fraud - Immigration and Customs Enforcement-Homeland Security Investigations
  • Cyber Threat - Immigration and Customs Enforcement-Homeland Security Investigations
  • State and Local Enforcement - New York State Police
  • Third Party Money Launderers - Internal Revenue Service-Criminal Investigation
  • Transnational Organized Crime - Drug Enforcement Administration
  • Transnational Security Threat Category - Federal Bureau of Investigation

The description of each investigation illustrates the key role of financial industry BSA filings in law enforcement's pursuit of criminals.

05/20/2020

Commercial Bank Exam Manual updated

The Federal Reserve Board has posted an update of its Commercial Bank Examination Manual, which presents examination objectives and procedures that Federal Reserve System examiners follow in evaluating the safety and soundness of state member banks. The Manual is intended as guidance for planning and conducting bank examinations.

05/20/2020

Guidance issued on borrower eligibility for refi or purchase

The Federal Housing Finance Agency (FHFA) announced yesterday that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, who wish to refinance or buy a new home. Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (i.e. in forbearance but continued to make their mortgage payments or reinstated their mortgage). Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.

FHFA is also extending the Enterprises' previously announced ability to purchase single-family mortgages in forbearance. The Enterprises are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020, and where only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.

05/19/2020

Labor may allow OT exemption for commissioned loan officers

The Department of Labor has published a final rule at 85 FR 29867 in the May 19, 2020, Federal Register withdrawing the "partial list of establishments" with "no retail concept" and the "partial list of establishments" that "may be recognized as retail" for the purposes of determining whether a business may qualify for an exemption from the Fair Labor Standards Act's overtime compensation requirement for certain commissioned employees employed by a retail or service establishment.

The elimination of the lists from Labor's regulations at 29 CFR 779 will promote consistent treatment when evaluating exemption claims by treating all businesses equally under the same standards. Banking and mortgage lending trade representatives have claimed the two lists have prevented mortgage lenders from applying for exemptions from the overtime requirement for mortgage loan officers who may earn more than half their income from commissions.

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