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CFPB posts COVID-19 mortgage-related information

The Bureau has added information to its "Guide to coronavirus mortgage relief options" article, including updated mortgage relief forbearance options.

The CFPB also outlined practices in Bulletin 2020-02 to provide mortgage servicers clarity, facilitate compliance, and prevent harm to consumers during the transfer of residential mortgages. The Bureau stated that, because consumers do not have a choice with respect to the transfer of servicing, compliance with regulatory requirements is especially important in risk mitigation and preventing consumer harm. Examples of practices that servicers may consider as contributing to compliance include:

  • Developing a servicing transfer plan that includes a communications plan, testing plan (for system conversion), a timeline with key milestones and an escalation plan for potential problems;
  • Engaging in quality control work after a transfer of preliminary data to validate that the data on the transferee's system matches the data submitted by the transferor;
  • Determining servicing responsibilities for legacy accounts including tax reporting, credit bureau reporting and other questions that may arise;
  • Conducting a post-transfer review or de-brief to determine effectiveness of the transfer plan and whether any gaps have arisen that require resolution; and
  • Monitoring consumer complaints and loss mitigation performance metrics. The CFPB emphasizes the importance of post-transfer monitoring to ensure that transferred data is complete, accurate and functional for the transferee.
  • Identifying any loans in default, active foreclosure and bankruptcy or any forbearance agreements entered in with the borrower. Where applicable include loss mitigation activity for each loan, including status and notes pertaining to the loss mitigation action.



The FDIC has posted a series of FAQs concerning the SBA's Paycheck Protection Program.


House approves added PPP funding

The House of Representatives has passed legislation approved earlier by the Senate that--

  • Makes improvements in the Paycheck Protection Program (PPP) by setting aside $60 billion for smaller community banks and credit unions
  • Extends the PPP by providing $310 billion in additional funding
  • Grants the SBA $50 billion for disaster loans and $10 billion for disaster grants
  • Provides $75 billion for hospitals and health care workers for purchase of personal protective equipment and $25 billion to expand COVID-19 testing

The president is expected to sign the bill today.


Expansion of access to PPP liquidity facility planned

To facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program, the Federal Reserve announced yesterday that it is working to expand access to its Paycheck Protection Program Liquidity Facility for additional SBA-qualified lenders as soon as possible. Current SBA-qualified PPP lenders include depository institutions, such as banks and credit unions, as well as non-depository institution lenders, such as some Community Development Financial Institutions. Currently, only depository institutions are eligible to participate in the facility, and over 1000 have already been approved to access the program.


Fed transparency on credit support facilities

Yesterday the Federal Reserve Board outlined the extensive and timely public information it will make available regarding its programs to support the flow of credit to households and businesses and thereby foster economic recovery. Specifically, the Board will report substantial amounts of information on a monthly basis for the liquidity and lending facilities using CARES Act funding, including the names and details of participants in each facility, amounts borrowed and interest rate charged; and overall costs, revenues, and fees for each facility.


FHLBanks can accept PPP loans as collateral

The Federal Housing Finance Agency (FHFA) has announced that Federal Home Loan Banks can accept Paycheck Protection Program loans as collateral when making advances to their members. FHLBanks can accept loans guaranteed by the Small Business Administration under PPP provided the FHLBanks comply with certain safety and soundness requirements.


NCUA amends regs in response to CARES Act

The NCUA has announced its Board has approved an interim final rule that amends the agency’s capital adequacy (12 CFR Part 702) and member business loans and commercial lending (12 CFR Part 723) regulations following the creation of the SBA’s Paycheck Protection Program (PPP) . The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires that PPP loans receive a zero-percent risk weighting under the NCUA’s risk-based capital requirements. To reflect this statutory requirement, the interim final rule amends the NCUA’s capital adequacy regulation so that covered PPP loans receive a zero-percent risk weight in the agency’s risk-based net worth requirements.

The rule becomes effective on publication. Comments will be accepted for 30 days from the publication date.


House prices up in February

U.S. house prices rose in February, up 0.7 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 5.7 percent from February 2019 to February 2020. The previously reported 0.3 percent increase for January 2020 was revised upward to 0.5 percent. For the nine census divisions, seasonally adjusted monthly house price changes from January 2020 to February 2020 were all positive, ranging from 0.3 percent in the West South Central division to +1.2 percent in the Middle Atlantic division. The 12-month changes were also all positive, ranging from +4.2 percent in the West South Central division to +8.1 percent in the Mountain division. U.S. house prices rose in February, up 0.7 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 5.7 percent from February 2019 to February 2020.


Enterprises to purchase qualified loans in forbearance

The Federal Housing Finance Agency (FHFA) has announced its approval of the purchase by Fannie Mae and Freddie Mac (the Enterprises) of certain single-family mortgages in forbearance that meet specific eligibility criteria. Due to the COVID-19 pandemic, some borrowers have sought payment forbearance shortly after closing on their single-family loan and before the lender could deliver the mortgage loan to the Enterprises.

Mortgage loans either in forbearance or delinquent are normally ineligible for delivery under Enterprise requirements. However, yesterday's action lifts that restriction for a limited period of time and only for mortgages meeting certain eligibility criteria. Eligible loans will also be priced to mitigate the heightened risk of loss to the Enterprises from these purchases. These prudential measures also ensure fulfillment of the Enterprises' charter requirements to only purchase loans that meet the purchase standards imposed by private, institutional mortgage investors.


Webinar: How to Become a PPP Lender

The federal banking regulators and the NCUA are jointly hosting a webinar for bankers today (Thursday, April 23) from 11:00 a.m. to 12:00 p.m. EDT. Bankers will have the opportunity to hear directly from officials within the Small Business Administration (SBA) regarding the Paycheck Protection Program (PPP). The presentation is for lenders who are not currently SBA lenders. Details on required preregistration and availability of webinar materials copies can be found in the FDIC's FIL-49-2020, issued yesterday.


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