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FinCEN mirrors SBA PPP FAQs on Beneficial Ownership

FinCEN has posted a Paycheck Protection Program FAQs document that mirrors two of the SBA's FAQs regarding implementation of the Paycheck Protection Program (PPP) that involve explaining the requirements under the Bank Secrecy Act (BSA), and how lenders can meet those requirements when issuing a PPP loan.

[FinCEN's action adopts the SBA's interpretation of how Beneficial Ownership certification requirements will apply to PPP customers, which differs from FinCEN regulations. At the same time, FinCEN carefully stated in the text preceding the two FAQs, that, as "administrator of the BSA, [FinCEN] is re-publishing those FAQs in this document [and] will update its document with any additional BSA-related FAQs involving the PPP," apparently reclaiming its authority over the interpretation of its own regulations. -- Editor]


CARES ACT multifamily rental housing relief

HUD has announced it is issuing new mortgage payment relief guidance under the CARES Act for borrowers with multifamily mortgages insured by the Federal Housing Administration or borrowers participating in other HUD multifamily housing programs. Servicers must grant multifamily borrowers experiencing financial hardships as a result of COVID-19 up to 90 days of forbearance when the borrower requests assistance. Servicers can grant this forbearance without direct HUD approval if they follow the protocol in HUD’s guidance. To facilitate implementation, HUD is providing a standard Multifamily Forbearance Protocol to reduce paperwork and streamline processing for borrowers, servicers, and lenders. The protocol includes:

  • Allowing servicers to grant, without HUD approval, up to 30 days of forbearance for borrowers experiencing a financial hardship due to COVID-19 if the borrower was current on their mortgage payments as of February 1, 2020;
  • Allowing automatic forbearance extensions from servicers to borrowers for up to two additional 30-day periods, without HUD approval; and
  • Encouraging borrowers to enter into repayment plans with renters (residential and commercial) that experience an income reduction or temporary loss of household income but are able to make up the difference over time, without HUD approval.


Relief for Oregon weather-related damage

FDIC FIL-42-2020, issued Friday, announces steps steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Oregon affected by severe storms, tornadoes, straight-line winds and flooding February 5–9, 2020.


Payroll support for employees of small air carriers

Treasury Mnuchin has announced details of the Payroll Support Program under the CARES Act which will not require passenger air carriers that will receive $100 million of payroll assistance or less to provide financial instruments as appropriate compensation. For passenger air carriers with payroll support payments up to $100 million, funds will be available promptly upon approval of their applications. The majority of these requests seek less than $10 million. For more information see updates of program implementation under the CARES Act.


HUD publishes notice of admin actions against mortgagees

HUD has published [85 FR 20510, 4/13/2020] a notice of the cause and description of administrative actions taken by HUD's Mortgagee Review Board against HUD-approved mortgagees during HUD's fiscal year ending September 30, 2019.


CFPB blog article on student loans and coronavirus

The CFPB has posted an updated article on its Blog reviewing key things student borrowers need to know about their loans and the effect of the CARES Act.


Capital rules relaxed for PPP loans

The federal bank regulatory agencies announced Thursday an interim final rule to encourage lending to small businesses through the Small Business Administration's Paycheck Protection Program, or PPP. The PPP was established by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, and provides loans to small businesses so that they can keep their workers on the payroll during the disruptions caused by the coronavirus. The interim final rule modifies the agencies' capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve's PPP facility because there is no credit or market risk in association with PPP loans pledged to the facility. Consistent with the agencies' current capital rules and the CARES Act requirements, the interim final rule also clarifies that a zero percent risk weight applies to loans covered by the PPP for capital purposes. The rule is effective immediately. Comments will be accepted for 30 days following Federal Register publication.

UPDATE: Published 4/18/2020 at 85 FR 20387. Effective on publication. Comments on the interim final rule are due by 5/13/2020.


Treasury support for new lending programs

Treasury announced yesterday that Secretary Mnuchin had approved the Treasury Department's support of new and expanded lending programs concurrently announced by the Federal Reserve Board.


Fed to provide up to $2.3 Trillion in added economic relief

The Federal Reserve announced on Thursday it will provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. The actions the Federal Reserve is taking today to support employers of all sizes and communities across the country will:

  • Bolster the effectiveness of the Small Business Administration's Paycheck Protection Program (PPP) by supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses. The PPP provides loans to small businesses so that they can keep their workers on the payroll. The Paycheck Protection Program Liquidity Facility (PPPLF) will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value;
  • Ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans through the Main Street Lending Program. The Department of the Treasury, using funding from the CARES Act, will provide $75 billion in equity to the facility;
  • Increase the flow of credit to households and businesses through capital markets, by expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF) as well as the Term Asset-Backed Securities Loan Facility (TALF). These three programs will now support up to $850 billion in credit backed by $85 billion in credit protection provided by the Treasury; and
  • Help state and local governments manage cash flow stresses caused by the coronavirus pandemic by establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipalities. The Treasury will provide $35 billion of credit protection to the Federal Reserve for the Municipal Liquidity Facility using funds appropriated by the CARES Act.

Related resources:


PPP FAQ updated again

The Treasury/SBA FAQ document for PPP loans was updated yesterday. Two changes addressed lender concerns in additions to the FAQ:

  • Question 19: SBA clarified that lenders may use their own note or an SBA form. The agency has released its own form, but it may be revised to address industry feedback to meet lenders’ operational needs.
  • Question 20: The lender must make the first disbursement of the loan no later than 10 calendar days after the loan is approved.


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