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SBA releases PPP loan forgiveness application

The Small Business Administration has released the Paycheck Protection Program Loan Forgiveness Application that borrowers must complete in order to have their Paycheck Protection Program loans forgiven. The form includes detailed information about the costs that are eligible for forgiveness and instructions for calculating those costs. The SBA said regulations and additional guidance for borrowers on completing the forgiveness form, as well as guidance for lenders detailing their responsibilities will be issued soon.


CFPB settles with Monster Loans

The Consumer Financial Protection Bureau has announced the filing of a proposed stipulated final judgment to resolve allegations in its lawsuit against California mortgage lender Chou Team Realty, LLC, which does business as Monster Loans, and several individuals and related companies, including Thomas Chou and Sean Cowell.

The Bureau's complaint alleged that Chou and Cowell were among the leaders of a scheme to use Monster Loans’ account with a major credit bureau to unlawfully obtain consumer reports for their associated student loan debt-relief companies, which in turn used the consumer reports to deceptively market their services nationwide and then charged consumers illegal fees. The proposed settlement, if entered by the court, would impose an $18 million redress judgment against Monster Loans, ban Monster Loans, Chou, and Cowell from the debt-relief industry, and impose a total $450,001 civil money penalty against them.

If approved by the court, the redress and civil penalty amounts would be partially suspended based on the defendants' alleged limited ability to pay.


Fannie and Freddie extend foreclosure and eviction moratorium

The Federal Housing Finance Agency announced Thursday that Fannie Mae and Freddie Mac (the Enterprises) are extending their moratorium on foreclosures and evictions until at least June 30, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on May 17.


FDIC updates exam manual

The FDIC has released its April 2020 updates to its Consumer Compliance Examination Manual. The following sections were updated:

  • Pre-Examination Planning (II-4.1): Updated to incorporate changes to the process.
  • Pre-Examination Information Packet Template (III-1.1): Changes to the Pre-Examination Planning process have been reflected in the Template.
  • Truth in Lending Act (V-1.1): Updated to reflect annual threshold changes. The escrow exemption and the appraisal exemption thresholds for higher priced mortgages and the credit card penalty fee safe harbor amount were increased.
  • Home Mortgage Disclosure Act (V-9.1): Updated to reflect updated loan volume thresholds. The asset size exemption thresholds were also updated.
  • Consumer Leasing Act (V-10.1): The exemption threshold for consumer credit and lease transactions were increased.
  • Community Reinvestment Act (XI-1.1): Asset-based definitions for Small Banks and Intermediate Small Banks were updated.


CFPB statement on responsibility during pandemic

The CFPB has released a statement and FAQs outlining the responsibility of certain financial firms during the pandemic. In the statement, the Bureau outlines the billing error responsibilities of credit card issuers and other open-end non-home secured creditors during the COVID-19 pandemic. Additionally, the Bureau encourages financial firms to continue to provide the kind of assistance to their communities that many have been providing, such as waiving fees, lowering minimum-balance requirements, and implementing changes in account terms that benefit consumers.

It should be noted that these are Bureau statements, which may not reflect the positions of other federal financial regulators.


New payment deferral option from Fannie and Freddie

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac (the Enterprises) are making available a new payment deferral option. The payment deferral option allows borrowers, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.

Servicers will begin offering the payment deferral repayment option starting July 1, 2020.

In addition to the new payment deferral option, borrowers with COVID-19 related hardships can still utilize other options that include reinstatement, repayment plan, or loan modifications based on their individual situations.


FEMA to suspend Tennessee communities from NFIP

The Federal Emergency Management Agency has published a notice at 85 FR 28499 in today's Federal Register that it intends to suspend on May 15, 2020, the City of Manchester and unincorporated areas of Coffee County, Tennessee, from the National Flood Insurance Program for noncompliance with the floodplain management requirements of the program.


FDIC proposes rule to lessen insurance assessment impacts

The FDIC has issued a press release and FIL-56-2020 to announce a notice of proposed rulemaking that would mitigate the deposit insurance assessment effects of participating in the Paycheck Protection Program (PPP) established by the SBA and the Paycheck Protection Program Lending Facility (PPPLF) and Money Market Mutual Fund Liquidity Facility (MMLF) established by the Federal Reserve System. The changes would:

  1. remove the effect of participation in the PPP and PPPLF on various risk measures used to calculate an insured depository institution’s assessment rate,
  2. remove the effect of participation in the PPPLF and MMLF programs on certain adjustments to an IDI’s assessment rate,
  3. provide an offset to an insured depository institution’s assessment for the increase to its assessment base attributable to participation in the MMLF and PPPLF, and
  4. remove the effect of participation in the PPPLF and MMLF programs when classifying insured depository institutions as small, large, or highly complex for assessment purposes.

To provide certainty to insured depository institutions regarding the assessment effects of participating in these programs, the FDIC is proposing an effective date by June 30, 2020, and an application date of April 1, 2020, which would ensure that the changes are applied to assessments starting in the second quarter of 2020. Comments will be accepted for seven days following publication in the Federal Register.


TALF term sheet updates

The Federal Reserve Board has announced additional information regarding borrower and collateral eligibility criteria for the Term Asset-Backed Securities Loan Facility (TALF). The facility was announced on March 23 as part of an initiative to support the flow of credit to U.S. consumers and businesses. To help ensure that U.S. consumers and businesses remain able to access credit at affordable terms, TALF will initially make up to $100 billion of loans available.

The Board also outlined the information it will publicly disclose for the TALF and the Paycheck Protection Program Liquidity Facility (PPPLF) on a monthly basis. The Board will disclose the name of each participant in both facilities; the amounts borrowed, interest rate charged, and value of pledged collateral; and the overall costs, revenues, and fees for each facility. The disclosures are similar to those announced in April for the Board facilities that utilize CARES Act funds. A TALF Term Sheet and FAQs were also posted.


Payroll Support Program - Aviation Industry participant list

Treasury has posted a list of its Payroll Support Program participants with amounts of assistance provided and, where applicable, financial instruments provided to the federal government as appropriate compensation for the provision of financial assistance. Approved applicants include all of the major passenger air carriers, more than 260 smaller passenger air carriers, and a significant number of cargo air carriers and contractors.


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