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Regulators webinar on working with customers affected by COVID-19

The FDIC, Fed, OCC, and NCUA will host a webinar for bankers on Friday, April 24, 2020, from 3:00 to 4:00 p.m. EDT, to discuss the revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. The webinar will address accounting and regulatory reporting questions and clarify the interaction between current accounting principles and Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The webinar topics will include:

  • Clarifying the interaction between current accounting principles and Section 4013 of the CARES Act;
  • Supervisory considerations on past-due and nonaccrual regulatory reporting; and
  • Regulatory capital considerations.

Participants should preregister for the event. To accommodate the participation of as many financial institutions as possible, the agencies ask that each institution register no more than two representatives to attend the live session. Participants are encouraged to email questions in advance to Webinar materials will be archived for future viewing and can be accessed after the webinar at the registration link.


New FFIEC calculation tools announced

The Federal Institutions Examination Council has announced the availability of two FFIEC federal disclosure computational tools: the Annual Percentage Rate (APR) Computational Tool and the Annual Percentage Yield (APY) Computational Tool. These web-based tools facilitate supervision of financial institutions with regard to applicable laws and regulations and assist financial institutions in their efforts to comply with those laws and regulations. The OCC has discontinued use of its Annual Percentage Rate Calculation Program for Windows (APRWIN) and Annual Percentage Yield Calculation Program for Windows (APYWIN) in favor of the FFIEC Federal Disclosure Computational Tools. The OCC's APRWIN and APYWIN are no longer available for download.


Paycheck Protection Program Liquidity Facility up and running

The Federal Reserve announced yesterday that its Paycheck Protection Program Liquidity Facility is fully operational and available to provide liquidity to eligible financial institutions, which will help support small businesses. The Small Business Administration's Paycheck Protection Program, or PPP, guarantees loans extended by qualified lenders to small businesses so that those businesses can keep workers employed. The Federal Reserve's facility will support the effectiveness of the PPP by extending credit to financial institutions that make PPP loans, using such loans as collateral. Supplying financial institutions with additional liquidity will help increase their capacity to make PPP loans, if and when the SBA's PPP funds are replenished by Congress. Additional information on the facility, which is managed by the Federal Reserve Bank of Minneapolis on behalf of the Federal Reserve System, can be found HERE.


OSA Annual Servicemember Affairs Report for 2019

The CFPB’s Office of Servicemember Affairs (OSA) has posted its Annual Report for Fiscal Year 2019.The report is a review of OSA’s activities in fulfilling its statutory responsibilities over the course of FY19, which covers the period from October 1, 2018 to September 30, 2019. Of note to financial institutiions is section 3 of the report, which addresses military consumer complaints. As in past years, the leading complaint subjects were:

  • Credit or consumer reporting
  • Debt collection
  • Mortgages
  • Credit card
  • Checking or savings accounts


Borrower Protection Program announced

The Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB) have announced the Borrower Protection Program, a new joint initiative that enables CFPB and FHFA to share servicing information to protect borrowers during the coronavirus national emergency. Under the program, the CFPB will make complaint information and analytical tools available to FHFA via a secure electronic interface; and FHFA will make available to the Bureau information about forbearances, modifications and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac.


FFIEC updates BSA/AML Exam Manual

FDIC FIL-44-2020 announced Wednesday evening (April 15, 2020) that the Federal Financial Institutions Examination Council (FFIEC) has updated several sections and related examination procedures in the FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual. The updated sections provide transparency into the BSA/AML exam process and do not establish new requirements. The changes should not be interpreted as new instructions or as an augmented examination focus.

Many of the revisions are designed to emphasize and enhance the risk-focused approach to BSA/AML supervision. An interagency statement accompanying the FIL provides information on the updated sections, all of which are identified in the April 2020 Update also provided with the FIL. Those sections are identified with an April 2020 date in the table of contents and on the FFIEC BSA/AML InfoBase. Updates to other sections of the Manual will be released in phases later.


PPP and EIDL funds exhausted

The Small Business Administration has reported that it will stop accepting applications for Paycheck Protection Program loans once the processed loan volume reaches the $349 billion level authorized by the CARES Act. Once that point is reached, the SBA said, lenders will no longer be able to send PPP applications to the SBA's system. Loan applications received by banks but not yet submitted to SBA will not be able to be completed. It is expected that the funds will be exhausted today (Thursday, April 16), perhaps as early as this morning. Additional PPP funds won't be available unless Congress acts to supplement the program.

The SBA has also posted a notice that loan advance funds under the EIDL program have been fully committed, and no further applications under that program can be accepted.

UPDATE: The SBA added a notice to its PPP information page this morning (April 16) that "The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding." We updated the headline for this story accordingly.


PPP listening sessions to be held by OCC

The OCC has announced that its Office of Innovation will host three teleconference listening sessions on April 16, 20, and 21, to discuss issues and potential solutions relating to the Paycheck Protection Program (PPP). These sessions will focus on three aspects of the PPP: payroll verification, fraud identification, and backend processes.

  • Payroll verification - April 16, 11:00 a.m. – 1:00 p.m. ET. The OCC seeks to facilitate discussion around methods to increase the speed and efficiency of payroll verification for PPP loans during loan application and monitoring processes.
  • Fraud identification - April 20, 1:00 p.m. – 3:00 p.m. ET. The OCC seeks to facilitate discussion around solutions that will enable entities to more effectively and efficiently identify fraudulent uses of the PPP, including loan stacking (i.e., receiving PPP loans from more than one lender).
  • Backend processes - April 21, 1:00 p.m. – 3:00 p.m. ET. The OCC seeks to facilitate discussion around solutions addressing potential challenges entities may face monitoring PPP loans and during the loan forgiveness process.

Potential solutions may include new products or services (including those developed by fintech companies), partnerships between a bank and fintech company, or other approaches related to responsible innovation in the federal banking system. Each listening session will last approximately two hours. Parties interested in providing their views should contact OCC’s Office of Innovation at and indicate which call they are interested in participating in.


Regulators provide appraisal relief

A joint press release yesterday from the Federal Reserve, FDIC, OCC, NCUA, and CFPB announced an interim final rule to temporarily defer real estate-related appraisals and evaluations under the interagency appraisal regulations to allow regulated institutions to extend financing to creditworthy households and businesses quickly in the wake of the national emergency declared in connection with COVID-19. In addition, the federal banking agencies, together with NCUA and the Consumer Financial Protection Bureau, in consultation with the Conference of State Bank Supervisors, issued a joint statement to address challenges relating to appraisals and evaluations for real estate-related financial transactions affected by COVID-19.

The interim final rule, to become effective on Federal Register publication, will temporarily defer certain appraisals and evaluations for up to 120 days following closing the residential or commercial real estate loan transactions (other than transactions involving acquisition, development, and construction of real estate). The deferment provisions will expire on December 31, 2020, unless extended by the federal banking agencies. The NCUA will consider a similar proposal on April 16.

The joint statement outlines other flexibilities in industry appraisal standards and in the agencies' appraisal regulations and describes temporary changes to Fannie Mae and Freddie Mac appraisal standards that can assist lenders during the COVID-19 emergency.


Changes to NCUA Central Liquidity Facility

The NCUA yesterday announced its approval of an interim final rule that enhances the ability of the Central Liquidity Facility to serve as liquidity backstop to the nation’s credit union system. The interim final rule enhances the NCUA’s regulations on the Central Liquidity Facility to supplement the legislative changes resulting from the Coronavirus Aid, Relief, and Economic Security Act while adding even greater flexibility and relief for member credit unions. The rule makes it easier for credit unions to join the facility as a regular member or through a corporate credit union as part of an agent relationship, and access emergency liquidity should the need arise.

Specifically, the rule:

  • Eliminates the six-month waiting period for a new member to receive a loan;
  • Makes temporary amendments to the waiting period for a credit union to terminate its membership;
  • Eases collateral requirements on some assets; and
  • Allows, temporarily, for an agent member to borrow for its own liquidity needs.

The interim rule becomes effective on publication in the Federal Register. Comments on the rule will be accepted for 60 days following publication.


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