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04/03/2020

SBA releases interim final rule on Paycheck Protection Program

The U.S. Small Business Administration has released an interim final rule to implement sections 1102 and 1106 of the CARES Act, which temporarily adds a new product, the "Paycheck Protection Program," to the SBA's 7(a) Loan Program. It will be effective on publication, and SBA-approved lenders can start accepting applications under the program April 3, 2020.

04/03/2020

SBA programs for small business relief

The OCC has issued Bulletin 2020-31 encouraging banks to consider providing loans under available SBA relief programs to small businesses.

  • The Paycheck Protection Program (PPP), an expansion of the SBA’s 7(a) loan program, allows borrowers to obtain loans that are fully guaranteed by the SBA and that may be fully or partially forgiven if certain conditions are satisfied. The PPP is available beginning April 3, 2020.
  • The Economic Injury Disaster Loan and Loan Advance Program expands the SBA’s existing disaster assistance loan program and waives certain requirements. Economic Injury Disaster Loans can provide a small business with a working capital loan of up to $2 million. In addition, small businesses may request a loan advance from the SBA of up to $10,000, which does not have to be repaid.
  • The Debt Relief Program will pay the principal, interest, and fees for six months on existing 7(a) loans and new 7(a) loans originated before September 27, 2020.

04/02/2020

CFPB COVID-19 credit reporting guidance

The Consumer Financial Protection Bureau yesterday released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers’ making payments. The Bureau’s statement underscores that consumers benefit if lenders report accurate information about these arrangements to credit bureaus so that the credit reports of consumers are accurate.

In addition, in response to staffing and resources constraints on lenders and credit bureaus due to the pandemic, the Bureau’s statement also provides flexibility for lenders and credit bureaus in the time they take to investigate disputes. The Bureau specifically states that it does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes as long as they make good faith efforts during the pandemic to do so as quickly as possible.

04/02/2020

CFPB settles with short-term lender

The CFPB has announced a settlement with Cottonwood Financial, Ltd., which does business under the name Cash Store. Cash Store is based in Irving, Texas, and owns and operates roughly 340 retail lending outlets in Idaho, Illinois, Michigan, New Mexico, Texas, Utah, and Wisconsin. The Bureau found that in the course of marketing, servicing, and collecting on high-interest payday, auto-title, and unsecured consumer-installment loans Cash Store violated the Consumer Financial Protection, Fair Credit Reporting, and Truth in Lending Acts. The consent order requires Cash Store to pay over $1.3 million in redress and penalties.

04/02/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act performance evaluations that were made public in March.. Of the 28 evaluations made public this month, 22 were rated satisfactory and the following six were rated outstanding (links are to the evaluation reports):

04/02/2020

OCC publishes March proposal to amend licensing rules

The OCC has published at 85 FR 18728 its March 2020 proposal (see our Top Story) to amend its rules relating to policies and procedures for corporate activities and transactions involving national banks and Federal savings associations to update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes. Comments will be accepted through May 4, 2020.

04/01/2020

FEMA to suspend communities in CT, MD, NJ and RI

FEMA has published a notice at 85 FR 18129 in today's Federal Register listing communities in Connecticut, Maryland, New Jersey and Rhode Island that are scheduled for suspension on April 3, 2020, from the National Flood Insurance Program due to noncompliance with the floodplain management requirements of the program. The affected communities are:

  • CT: North Stonington, Stonington, and Voluntown
  • MD: Barton, Cumberland, Frostburg, Lonaconing, Midland, and Westernport
  • NJ: Belleville, Bloomfield, Caldwell, Cedar Grove, East Orange, Essex Fells, Glen Ridge, Newark, North Caldwell, Nutley, Orange Township, Roseland, and Verona
  • RI: Charlestown, Coventry, Exeter, Hopkinton, Narragansett, Narragansett Indian Tribe, North Kingstown, Richmond, South Kingstown, West Greenwich, and Westerly

If FEMA receives documentation that a listed community has adopted the required floodplain management measures before April 3, the community won't be suspended. Information on the current participation status of a community can be found in FEMA's Community Status Book.

04/01/2020

CFPB Guide to coronavirus mortgage relief options

04/01/2020

Low income CUs eligible for NCUA loans and grants

The NCUA has announced federally insured, low-income-designated credit unions can request grants and loans from the NCUA to assist members, businesses, and communities experiencing economic hardships due to the COVID-19 pandemic.

The NCUA’s Office of Credit Union Resources and Expansion will award grants and loans to low-income credit unions to:

  • Provide assistance to schools with children in need, including providing breakfast and lunch;
  • Provide assistance to elderly members needing food and medication delivery services;
  • Offer rental, mortgage, and utility payment assistance to members such as entrepreneurs, small business owners, and hospitality and service industry employees;
  • Offer loan payment relief to affected members;
  • Develop a new product or service for affected members, such as offering preloaded cards; or
  • Cover costs associated with moving credit union operations to remote locations: laptops, software, and short-term rentals.

04/01/2020

Regulators clarify five year-transition rule and CECL Rule

FDIC FIL-32-2020, issued yesterday, delivered a joint statement by the Fed, FDIC, and OCC to clarify the interaction between the interim final rule that provides a five-year transition period for the impact of the current expected credit loss methodology (CECL) on regulatory capital and the temporary CECL relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

On March 27, 2020, the agencies issued an interim final rule that provides banking organizations that were required (as of January 1, 2020) to adopt CECL during the 2020 calendar year an option to delay an estimate of CECL's impact on regulatory capital. Also, on March 27, 2020, the CARES Act was signed into law. The CARES Act provides banking organizations optional temporary relief from complying with CECL. The joint statement clarifies the interaction between the CECL IFR and the CARES Act for purposes of regulatory capital requirements.

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