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Top Story Lending Related

04/07/2020

PPP information for lenders

The SBA has published Form 3506, which non-SBA lenders must submit to receive delegated authority to issue 7(a) loans under the Paycheck Protection Program. Completed forms should be submitted via email to delegatedauthority@sba.gov.

During the weekend, the SBA issued an FAQ confirming that faith-based organizations (including churches, mosques, synagogues and other houses of worship) may apply for PPP loans. Treasury also issued an FAQ document on the PPP, which will be updated from time to time, and guidance on applicable PPP affiliation rules.

04/06/2020

COVID-19 info for small business lenders

The FDIC has created a page on its website with Coronavirus (COVID-19) Information for Small Business Lenders.

The FDIC is working with the SBA to help ensure that FDIC-supervised banks have the information they need to become SBA-certified lenders and start making loans to small businesses through the SBA’s recently launched Paycheck Protection Program (PPP).

One of the resources listing on the page is an FAQ on the SBA's Paycheck Protection Program, which was most recently updated on April 5, 2020. Lenders should return to the FAQ for updates, because Treasury and the SBA continue to fine-tune aspects of the program.

04/06/2020

Agencies encourage mortgage services to work with homeowners

The Federal Reserve Board, Conference of State Bank Supervisors, CFPB, FDIC, NCUA and OCC have issued a joint policy statement providing needed regulatory flexibility to enable mortgage servicers to work with struggling consumers affected by the Coronavirus Disease (COVID-19) emergency. The actions announced Friday by the agencies inform servicers of the agencies' flexible supervisory and enforcement approach during the COVID-19 pandemic regarding certain communications to consumers required by the mortgage servicing rules. The policy statement and guidance issued Friday will facilitate mortgage servicers' ability to place consumers in short-term payment forbearance programs such as the one established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

  • Under the CARES Act, borrowers in a federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID-19 pandemic, may request forbearance by making a request to their mortgage servicer and affirming that they are experiencing a financial hardship during the COVID–19 pandemic. In response, servicers must provide a CARES Act forbearance, that allows borrowers to defer their mortgage payments for up to 180-days and possibly longer.
  • The policy statement clarifies that the agencies do not intend to take supervisory or enforcement action against mortgage servicers for delays in sending certain early intervention and loss mitigation notices and taking certain actions relating to loss mitigation set out in the mortgage servicing rules, provided that servicers are making good faith efforts to provide these notices and take these actions within a reasonable time.
  • To further enable short-term payment forbearance programs or short-term repayment plans, mortgage servicers offering these programs or plans will not have to provide an acknowledgement notice within 5 days of receipt of an incomplete application, provided the servicer sends the acknowledgment notice before the end of the forbearance or repayment period.
  • The guidance also reminds servicers that there is existing flexibility in the rules with respect to the content of certain notices.
  • Finally, to assist servicers experiencing high call volumes from consumers seeking help, the policy statement also confirms that the agencies do not intend to take supervisory or enforcement action against mortgage servicers for delays in sending annual escrow statements, provided that servicers are making good faith efforts to provide these statements within a reasonable time.

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.

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