S&C FINANCIAL SERVICES CORONAVIRUS DEVELOPMENTS

March 25, 2020

Our Coronavirus Resource Page is being continuously updated with the latest legal analysis, memos and podcasts related to COVID-19.


March 26, 2020
FOMC DIRECTS FRBNY TO CONDUCT AGENCY COMMERCIAL MORTGAGED-BACK SECURITIES PURCHASES

The FOMC directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to increase System Open Market Account holdings of agency mortgage-backed securities in “amounts needed to support smooth market functioning.”  The FOMC directed the Desk to include purchases of agency commercial mortgage-backed securities in such purchases. A term sheet for the purchase operations is available here.
 
March 26, 2020
FSOC DISCUSSES COVID-19 IMPACTS

The FSOC met in executive and open sessions to discuss developments related to the COVID-19 virus and its impacts on financial institutions and markets.  Council members provided updates regarding how their agencies are responding to the financial and economic effects of the coronavirus’s spread.  Written statements were released for FDIC Chairman McWilliams, CFPB Director Kraninger, SEC Chairman Clayton, and CFTC Chairman Tarbert.
 
March 26, 2020
JOINT STATEMENT ENCOURAGING RESPONSIBLE SMALL-DOLLAR LENDING

The Fed, CFPB, FDIC, NCUA and OCC issued a joint statement encouraging banks, savings associations and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.
March 26, 2020
CFPB PROVIDES FLEXIBILITY DURING COVID-19 PANDEMIC

The CFPB announced that it is providing needed flexibility to enable financial companies to work with customers in need as they respond to the COVID-19 pandemic.  The Bureau will not expect quarterly reporting required under the Home Mortgage Disclosure Act and Regulation C, or reporting of certain information related to credit card and prepaid accounts, and will postpone certain specified data collections.
 
March 26, 2020
FDIC LETTER RE: FINANCIAL SERVICES AS ESSENTIAL CRITICAL INFRASTRUCTURE

The FDIC issued a Financial Institution Letter (FIL) highlighting the applicability of the Cybersecurity and Infrastructure Security Agency’s (CISA) recent guidance identifying financial services sector workers as essential critical infrastructure workers during the COVID-19 response emergency.
 
March 26, 2020
FINANCIAL REGULATORS HIGHLIGHT COORDINATION AND COLLABORATION OF EFFORTS TO ADDRESS COVID-19


The FFIEC announced that FFIEC members are actively discussing and identifying appropriate measures to maintain safety and soundness while protecting consumers, and noted that the federal banking agencies will not take action against any institution for submitting its March 31, 2020 Call Reports after the respective filing deadline, as long as the report is submitted within 30 days of the official filing date.
 
March 26, 2020
INTERAGENCY WEBINAR ON COVID-19 STATEMENT ON LOAN MODIFICATIONS AND REPORTING

The FDIC issued a Financial Institution Letter announcing that the Fed, FDIC, OCC, NCUA and CFPB will jointly host a webinar, to raise awareness of the interagency statement on loan modifications and reporting for financial institutions, which encouraged financial institutions to work prudently with borrowers affected by COVID-19.  The interagency webinar, originally scheduled for March 27, 2020, at 2:00 p.m. EDT, was subsequently postponed “due to recent legislative developments that could impact the March 22 interagency statement.” Our client memo on the interagency statement is available here.
 
March 26, 2020
FDIC ENCOURAGES TEMPORARY ALTERNATIVE MAILING PROCEDURES

The FDIC issued a Financial Institution Letter encouraging financial institutions and other parties to use temporary alternative electronic communication procedures in connection with supervisory correspondence.
 
March 25, 2020
FED REPORTS TO CONGRESS ON LENDING FACILITIES

The Fed made available three reports to Congress pursuant to Section 13(3) of the Federal Reserve Act concerning three of its recently-established lending facilities (the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, and the Money Market Mutual Fund Liquidity Facility).
 
March 25, 2020
STIMULUS III PACKAGE 

The Senate adopted the “Coronavirus Aid, Relief, and Economic Security Act” (the so-called “Stimulus III” package), legislation intended to address the “economic impact of the coronavirus.”  The legislation passed  the Senate 96 to 0 late on March 25, 2020.  The House is expected to consider the Senate-passed bill on Friday, March 27, 2020.  Among other measures, and in additional to significant new funding for hospitals, healthcare providers, and states and local governments, the bill provides the Treasury Department up to $500 billion to finance, in coordination with the Federal Reserve, loans, loan guarantees and other investments to help eligible businesses affected by the COVID-19 pandemic.  It also temporarily suspends or amends certain regulatory and accounting requirements applicable to banking organizations.  The legislation also authorizes $350 billion to finance lending to small businesses through programs administered by the Small Business Administration.
 
March 25, 2020
SEC EXTENDS CONDITIONAL EXEMPTIONS FROM REPORTING AND PROXY DELIVERY REQUIREMENTS

The SEC announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain reporting and proxy delivery requirements for public companies under the federal securities laws. The order supersedes and extends the SEC’s original order of March 4, 2020, which originally provided exemptions to reporting and proxy deliveries due from and including March 1, 2020 to April 30, 2020, to extend to those due on or before July 1, 2020. The SEC also announced it is extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19.  In addition, the SEC’s Division of Corporation Finance issued guidance regarding disclosure considerations and other securities law matters related to COVID-19 and related business and market disruptions.
 
March 24, 2020
FED ANNOUNCES ADJUSTMENTS TO SUPERVISORY APPROACH

The Fed released a statement providing additional information on adjustments to its supervisory approach in light of the coronavirus, including a temporary reduction in its exam activities and additional time—generally 90 days—granted to firms for resolving non-critical existing supervisory findings.  The statement clarifies that large banks should still submit the capital plans that they have developed as part of the Fed’s Comprehensive Capital Analysis and Review (CCAR) by April 6. Our client memo on the Fed statement is available here.
 
March 24, 2020
FED DELAYS PAYMENT SYSTEM RISK POLICY CHANGES

The Fed announced a six-month delay in the planned implementation of policy changes to its payment system risk policy related to procedures governing the provision of intraday credit to U.S. branches and agencies of foreign banking organizations, in light of challenges posed by COVID-19.
 
March 23, 2020
BIPARTISAN HOUSE LETTER TO FASB URGING DELAY OF CECL IMPLEMENTATION

Reps. Gregory Meeks (D-NY) and Blaine Luetkemeyer (R-MO) sent a letter to Financial Accounting Standards Board (FASB) Chairman Russell Golden requesting that FASB “suspend and further delay implementation” of the proposed switch from the Allowance for Loan and Lease Losses (ALLL) to the Current Expected Credit Losses (CECL) standard, noting that “Congress has already expressed a number of serious concerns with the CECL standard, and these fears are only heightened by the coronavirus crisis now engulfing the country.”
 
March 23, 2020
SEC PROVIDES TEMPORARY FLEXIBILITY TO REGISTERED INVESTMENT COMPANIES

The SEC announced an order providing additional flexibility for registered open-end management investment companies other than money market funds and insurance company separate accounts registered as unit investment trusts affected by recent market events to (i) borrow from affiliated persons and for affiliated persons to make collateralized loans, (ii) make interfunding lending arrangements (with and without existing interfunding lending orders), and (iii) deviate from their fundamental policies with respect to lending or borrowing. Our client memo on the SEC order is available here.
 
March 23, 2020
FED ANNOUNCES TECHNICAL CHANGE TO TLAC RULE

The Fed announced an interim final rule to phase in gradually, as intended, the automatic restrictions associated with a firm’s “total loss absorbing capacity,” or TLAC, buffer requirements, if the levels decline. The technical change revises the definition of “eligible retained income” for purposes of the Fed’s TLAC rule, similar to a technical change made to the banking agencies’ capital rule on March 17, 2020.
 
March 23, 2020
FED ESTABLISHES NEW, AND MODIFIES EXISTING, LENDING FACILITIES 

The Fed announced the establishment of the Term Asset-Backed Securities Loan Facility (TALF) to facilitate the issuance of asset-backed securities backed by student loans, auto loans, credit card loans, and certain other collateral.  The Fed also:  (1) established the Primary Market Corporate Credit Facility (PMCCF) to “serve as a funding backstop” for new corporate debt issued by eligible issuers and the Secondary Market Corporate Credit Facility (SMCCF) to “provide liquidity for outstanding corporate bonds” by purchasing secondary market corporate debt issued by eligible issuers; (2) expanded the eligible collateral for its Money Market Mutual Fund Liquidity Facility to include municipal variable rate demand notes and bank certificates of deposit (the Fed had previously expanded the facility to include single state and other tax-exempt municipal money market mutual funds); (3) expanded the eligible securities for its Commercial Paper Funding Facility to include high-quality, tax-exempt commercial paper.  Our client memo on the new and expanded lending facilities is available here
 
March 23, 2020
CORONAVIRUS “STIMULUS III” BILL FAILS TO MOVE FORWARD


Procedural votes to advance the “Coronavirus Aid, Relief, and Economic Security Act” (the so-called “stimulus III” package), draft legislation intended to address the “economic impact of the coronavirus,” failed on Sunday night in the Senate and again on Monday morning.  The text of the bill was released by Senate Majority Leader (R-KY) on March 19, 2020.  Senate negotiations on a “stimulus III” package continued on Tuesday and additional votes on the measure are expected in the coming days.
 
March 23, 2020
FHFA AUTHORIZES THE GSES TO ENTER INTO ADDITIONAL DOLLAR ROLL TRANSACTIONS

FHFA
announced that it has authorized Fannie Mae and Freddie Mac to enter into additional dollar roll transactions to “help support immediate needs for liquidity in the secondary mortgage market.”  Eligible collateral is limited to agency mortgage-backed securities and the transactions “must be undertaken via an auction or similar mechanism to ensure that they occur at a fair market price.” Our client memo on the FHFA authorization is available here.
 
March 22, 2020
GUIDANCE FOR CALIFORNIA FINANCIAL INSTITUTIONS REGARDING COVID-19

On March 22, 2020, the California Business, Consumer Services and Housing Agency and the California Department of Business Oversight (DBO) issued guidance to financial institutions regarding measures during the COVID-19 pandemic. Among other things, the DBO encourages such institutions to provide accommodations and alternative service options to customers. Our client memo on the California guidance is available here.
 
March 22, 2020
AGENCIES ISSUE STATEMENT ON LOAN MODIFICATIONS AND REPORTING


Federal financial institution regulators and the Conference of State Bank Supervisors published an interagency statement encouraging financial institutions to “work prudently with borrowers who are or may be unable to meet their payment obligations because of the effects” of COVID-19. The statement notes that (i) the agencies will not criticize institutions for working with borrowers and (ii) will not direct supervised institutions to automatically categorize all COVID-19-related loan modifications as troubled debt restructurings. Our client memo on the interagency statement is available here.
 
March 22, 2020
TREASURY MEMORANDUM ON FINANCIAL SERVICES ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS

Treasury
issued a memorandum announcing that the Department of Homeland Security has identified the financial services sector as a “critical infrastructure sector” and outlining individuals within the “Essential Critical Infrastructure Workforce” within the industry, which include workers who are needed to:  (1) “process and maintain systems for processing financial transactions and services”; (2) “provide consumer access to banking and lending services”; and (3) “support financial operations.”  Accordingly, the guidance stresses that firms “aligned to the essential infrastructure worker definition are expected to maintain their operations and work schedules.”
 
March 22, 2020
OCC INTERIM FINAL RULE ON SHORT TERM INVESTMENT FUNDS

The OCC issued an interim final rule revising its short-term investment fund (STIF) rule for national banks acting in a fiduciary capacity to permit banks to temporarily extend maturity limits of these funds.  The rule amends the OCC’s STIF rule to allow the OCC, through the issuance of an administrative order, to address the rule’s limits on weighted average portfolio maturity, weighted average portfolio life maturity, and the “method for determining those limits.”  In conjunction with the interim final rule, the OCC issued a related order outlining revised conditions for a bank to be deemed in compliance in with its STIF rule. 
 
March 22, 2020
SEC CONDITIONAL REGULATORY RELIEF FOR TRANSFER AGENTS


The SEC issued an order providing conditional regulatory relief for transfer agents and their representatives and other persons with certain regulatory obligations under Sections 17A, 17(f)(1), and 17(f)(2) of the Securities Exchange Act and their implementing regulations in light of the COVID-19 outbreak.
 
March 21, 2020
NY GOVERNOR ANDREW CUOMO EXECUTIVE ORDER ON MORTGAGE LOAN FORBEARANCE


New York Governor Andrew Cuomo issued an executive order granting persons and businesses experiencing financial hardship due to the COVID-19 outbreak temporary relief from certain loan or mortgage payments and banking fees due to banks or financial institutions that are licensed or regulated by the New York Department of Financial Services (DFS).  The order will remain in effect until April 20, 2020.  The relief provided by the order is narrower than the non-binding guidance issued by the DFS on March 19, 2020, which urged all mortgage servicers conducting business in New York, including mortgage servicers not licensed or regulated by the DFS, to undertake a variety of actions, including forbearance from collecting mortgage payments, in order to alleviate the impact of COVID-19. The DFS subsequently adopted regulations on an emergency basis establishing standards and procedures that regulated institutions must follow in their review of requests for relief and determinations to provide financial relief to those experiencing financial hardship, consistent with the purposes of the executive order. Our client memo on the DFS regulations is available here.
 
March 20, 2020
SUSPENSION OF FEDERAL STUDENT LOAN PAYMENTS
 

Secretary of Education Betsy DeVos announced that “[a]ll borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days” and “have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency.”  Accordingly, Sec. DeVos has directed “all federal student loan servicers to grant an administrative forbearance to any borrower with a federally held loan who requests one,” which will be in effect for a period of at least 60 days, beginning on March 13, 2020.  
 
March 20, 2020
HOUSE REPUBLICANS URGE DELAY ON CECL


21 House Financial Services Committee Republicans sent a letter to House and Senate leadership urging them, as they “construct[] a third piece of legislation in response to COVID-19,” to include a “provision to eliminate or significantly delay the Financial Accounting Standards Board’s (FASB) Current Expected Credit Loss (CECL) accounting standard.”   
 
March 20, 2020
FSB ISSUES STATEMENT RE: CONTINUED ACCESS TO FUNDING


The FSB issued a statement “encourag[ing] authorities and financial institutions to make use of the flexibility within existing international standards to provide continued access to funding for market participants and for businesses and households facing temporary difficulties from COVID-19, and to ensure that capital and liquidity resources in the financial system are available where they are needed.”  
 
March 20, 2020
BASEL COMMITTEE ISSUES STATEMENT RE: RESPONSE TO CORONAVIRUS


The Basel Committee issued a statement noting that it held a conference call to discuss the “impact of the rapid worldwide spread” of COVID-19 on the global banking system” and that the Committee is “actively coordinating with the Financial Stability Board and other standard setting bodies on cross-cutting financial system issues.”  Notably, the Committee is “suspending consultation on all policy initiatives and postponing all outstanding jurisdictional assessments planned in 2020 under its Regulatory Consistency Assessment Programme.” 
 
March 19, 2020
FDIC CHAIRMAN SENDS LETTER TO FASB ON CECL DELAY/TDR EXCLUSION


FDIC Chairman Jelena McWilliams sent a letter to the Financial Accounting Standards Board (FASB) requesting a “delay in transitions to and exclusions from certain accounting rules,” including its current expected credit loss (CECL) standard, in light of “new and uncertain challenges” stemming from the COVID-19 pandemic.  Chairman McWilliams also requests that FASB exclude “COVID-19-related modifications from being considered a concession when determining a troubled debt restructuring (TDR) classification.”
 
March 19, 2020
FDIC RELEASES FAQS FOR FINANCIAL INSTITUTIONS AND CONSUMERS


The FDIC released FAQs for financial institutions and consumers on a “variety of issues that may arise as financial institutions work with customers and communities affected by COVID-19.”  Specifically, the FAQs address, among other topics:  (1) payment accommodations for borrowers; (2) reporting delinquent loans; (3) “alternative service options to provide access to financial services”; (4) filing applications to “temporarily close a facility due to staffing challenges or to take precautionary measures”; and (5) firms experiencing “difficulties” filing regulatory reports.
 
March 19, 2020
BANKING AGENCIES RELEASE STATEMENT ON CRA CONSIDERATIONS


The Fed, FDIC, and OCC released a statement addressing Community Reinvestment Act (CRA) consideration for certain bank activities in response to COVID-19 and noting that the agencies will “provide favorable consideration” under the CRA to certain retail banking services, retail lending activities, and community development (CD) activities “related to this national emergency.”  The statement is effective “through the six-month period after the national emergency declaration is lifted,” unless otherwise extended. 
 
March 19, 2020
DFS ISSUES LETTER TO MORTGAGE SERVICERS URGING SUPPORT TO CUSTOMERS


DFS issued an industry letter to New York State regulated and exempt mortgage servicers urging them to “alleviate the adverse impact caused by COVID-19 on those mortgage borrowers (‘mortgagors’) who demonstrate they are not able to make timely payments.”  DFS suggests that servicers “support . . . adversely impacted mortgagors” by, among other measures:  (1) forbearing mortgage payments for 90 days from their due dates; (2) “[r]efraining from reporting late payments to credit rating agencies for 90 days”; (3) postponing evictions and foreclosures for 90 days; and (4) waving late payment fees and “any online payment fees” for 90 days. 
 
March 19, 2020
DFS ISSUES LETTER TO FINANCIAL INSTITUTIONS URGING SUPPORT TO CUSTOMERS


DFS issued an industry letter urging all New York State regulated financial institutions to take “reasonable and prudent actions” to support New Yorkers impacted by COVID-19 by, among other measures:  (1) waiving overdraft fees, ATM fees, and late fees for credit card and other loan balances; (2) increasing credit limits “for creditworthy customers”; (3) “[o]ffering payment accommodations”; and (4) “[e]nsuring that consumers and small businesses do not experience a disruption of service if financial institutions close their offices.” 
 
March 19, 2020
DFS ISSUES LETTER TO INSURANCE ENTITIES URGING SUPPORT TO CUSTOMERS


DFS issued an insurance circular letter urging its regulated insurance entities to take “reasonable and prudent actions” to support New Yorkers impacted by COVID-19, including:  (1) “[o]ffering payment accommodations”; (2) working with customers to “avoid non-renewal of insurance policies where a consumer fails to timely respond to a non-renewal notice”; and (3) “[i]ncreasing resources as necessary to accommodate increased claim submissions and increased inquiries from consumers about policy coverage benefits.”
 
March 19, 2020
EUROPEAN COMMISSION ADOPTS TEMPORARY FRAMEWORK FOR STATE AID


The European Commission adopted a temporary framework allowing member states to provide direct grants of €800,000, state guarantees of bank loans, subsidized interest rates and short-term export credit insurance to mitigate the effects of COVID-19.  This temporary framework will be in place until Dec. 31, 2020 and applies retrospectively to any aid granted by member states since Feb. 1, 2020.  Our client memo on the temporary framework is available here
 
March 18, 2020
FED ESTABLISHES MONEY MARKET MUTUAL FUND LIQUIDITY FACILITY


The Fed announced the establishment of a Money Market Mutual Fund Liquidity Facility (MMLF) under which the Federal Reserve Bank of Boston (FRBB) will extend loans to “eligible financial institutions secured by high-quality assets purchased by the financial institution” from MMMFs on or after March 18, 2020 or concurrently with the borrowing, but not prior to the opening of the facility.  In concert with the establishment of the MMLF, the Fed, FDIC, and OCC issued an interim final rule allowing “banking organizations to neutralize the regulatory capital effects of participating in the program.”  The rule became effective upon its publication in the Federal Register on March 23, 2020 and comments are due on or before May 7, 2020. On March 20, 2020, the Fed expanded the MMLF to make loans available to eligible financial institutions secured by certain high-quality assets purchased from single state and other tax-exempt municipal money market mutual funds. On March 23, 2020, the Fed expanded eligible collateral for the MMLF to include municipal variable rate demand notes and bank certificates of deposit.
 
March 18, 2020
FHFA AND HUD EVICTION SUSPENSIONS


FHFA announced that it has directed Fannie Mae and Freddie Mac (the Enterprises) to “suspend foreclosures and evictions for at least 60 days due to the coronavirus national emergency.”  The suspension applies to “homeowners with an Enterprise-backed single-family mortgage.”  Relatedly, HUD Secretary Ben Carson authorized FHA to “implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days.” 
 
March 18, 2020
CFTC ISSUES CUSTOMER ADVISORY RE: FRAUD


The CFTC issued a customer advisory “informing the public to be on alert for frauds seeking to profit from recent market volatility related to the COVID-19 (coronavirus) pandemic.” 
 
March 17, 2020
FED ESTABLISHES COMMERCIAL PAPER FUNDING FACILITY

The Fed announced the establishment of a Commercial Paper Funding Facility (CPFF) designed to provide  a “liquidity backstop to U.S. issuers of commercial paper” by purchasing three-month U.S. dollar-denominated unsecured and asset-backed commercial paper generally rated A-1/P-1 “directly from eligible companies” through the Federal Reserve Bank of New York’s (FRBNY) primary dealers.  The SPV will end its purchase of commercial paper on March 17, 2021, unless extended by the Fed Board. On March 23, 2020, the Fed subsequently expanded the eligible securities for the CPFF to include high-quality, tax-exempt commercial paper and revised the facilities’ pricing terms. 
 
March 17, 2020
FED ESTABLISHES PRIMARY DEALER CREDIT FACILITY


The Fed announced the establishment of a Primary Dealer Credit Facility (PDCF) that will offer overnight and term funding with maturities of up to 90 days to primary dealers.  The PDCF will “remain available to primary dealers for at least six months, or longer if conditions warrant.”  The FRBNY also issued FAQs on the PDCF. 
 
March 17, 2020
BANKING AGENCIES ENCOURAGE BANKING ORGANIZATIONS TO USE CAPITAL AND LIQUIDITY BUFFERS; ISSUE TECHNICAL CHANGE THROUGH INTERIM FINAL RULE


The Fed, FDIC, and OCC issued a statement “encouraging banking organizations to use their capital and liquidity buffers as they respond to the challenges presented by the effects of the coronavirus,” but noting that they “expect” firms to “continue to manage their capital actions and liquidity risk prudently.”  The agencies also issued a Q&A document responding to “public inquiries from banking organizations regarding the use of their capital and liquidity buffers.” In conjunction with the statement, the agencies issued an interim final rule revising the definition of “eligible retained income” for all banking organizations subject to the agencies’ capital rule in order to “make any [applicable] automatic limitations on capital distributions . . . more gradual,” as intended.  The interim final rule became effective upon its publication in the Federal Register on March 20, 2020.   
 
March 17, 2020
CFTC PROVIDES TEMPORARY RELIEF IN RESPONSE TO CORONAVIRUS


The CFTC’s Divisions of Swap Dealer and Intermediary Oversight (DSIO) and Market Oversight (DMO) issued several no-action letters providing temporary, targeted relief to futures commission merchants, introducing brokers, swap dealers, retail foreign exchange dealers, floor brokers, and swap execution facilities and designated contract markets, in response to the COVID-19 pandemic.  Our client memo on the no-action letters is available here
 
March 17, 2020
DEPOSITORY INSTITUTION TRADE GROUPS REPLY TO SENATE BANKING COMMITTEE DEMOCRATS


Seven depository institution trade groups sent a reply to a letter from eight Senate Banking Committee Democrats on their members’ response to the spread of COVID-19, reporting that the “American financial system is strong and resilient” and that banks and credit unions “across the country stand ready to support their customers and members and are working to help those affected.” 
 
March 17, 2020
SENATE BANKING COMMITTEE RANKING DEMOCRAT SENDS LETTERS TO FEDERAL AGENCIES


Senate Banking Committee Ranking Minority Member Sherrod Brown (D-OH) sent letters to the Fed, FDIC, OCC, CFPB, NCUA, SEC, FHFA, and HUD urging the agencies to “immediately cease all pending rulemaking processes . . . that are not a direct response to the immediate public health or economic risks posed by COVID-19” and extend “any pending comment periods on rules not directly related to addressing the immediate risks to the financial system and economy or other critical health and safety factors closing after March 1, 2020.”
 
March 16, 2020
BANKING AGENCIES ENCOURAGE DEPOSITORY INSTITUTIONS TO USE DISCOUNT WINDOW


The Fed, FDIC, and OCC issued a statement “encouraging” depository institutions to use the Fed’s discount window to “meet demands for credit from households and businesses at this time.”  The Fed subsequently issued a statement noting that it is “encouraged by the notable increase in discount window borrowing this week with banks demonstrating a willingness to use the discount window as a source of funding to support the flow of credit to households and businesses.” 
 
March 16, 2020
FINCEN ISSUES GUIDANCE ON TIMELY FILING OF REPORTS AND RECENT FRAUDULENT TRANSACTIONS


FinCEN issued guidance encouraging financial institutions to communicate concerns related to the timely filing of reports required under the Bank Secrecy Act and identifying several patterns of fraudulent transactions that have emerged since the onset of the COVID-19 outbreak.  Our client memo on the guidance is available here.
 
March 16, 2020
SEC ISSUES STATEMENT ON ITS OPERATIONS AND RULEMAKING DEADLINES


The SEC issued a statement concerning the Commission’s “operational initiatives, market-focused actions, guidance and targeted assistance and relief, investor protection efforts and other work of the agency in response to the effects of COVID-19.”  The statement notes that the Commission “will not take final action before April 24th” on certain active rulemakings “in order to allow commenters additional time if needed.”   
 
March 16, 2020
U.S., EUROPEAN MERGER REVIEW ADAPTS TO COVID-19 CRISIS


The DOJ’s Antitrust Division, FTC, and European Commission announced new procedures that will impact the process and timing of merger reviews in light of the COVID-19 outbreak.  While each agency remains operational, merging parties should expect delays in the review process and prepare accordingly.  Our client memo on the announcements is available here
 
March 13, 2020
FDIC STATEMENT ON WORKING WITH CUSTOMERS AFFECTED BY COVID-19


The FDIC issued a statement encouraging its regulated entities to take “prudent steps” assist customers and communities affected by COVID-19 and outlining potential actions for firms to “serve the long-term interests of communities and the financial system,” which include:  (1) waiving certain fees, such as ATM fees, overdraft fees, and late payment fees on credit cards and other loans; (2) increasing credit card limits for creditworthy borrowers; and (3) offering payment accommodations. 
 
March 13, 2020
COMPTROLLER OF THE CURRENCY BULLETIN ON WORKING WITH CUSTOMER AFFECTED BY COVID-19


The OCC issued a bulletin substantially similar to the FDIC’s statement encouraging banks to take steps to meet the financial services needs of customers adversely affected by COVID-19-related issues” and pledging that the agency will “provide appropriate regulatory assistance, as warranted, to banks” affected by the outbreak.  Similar to the FDIC’s statement, the bulletin outlines potential actions for banks to assist customers affected by COVID-19, which include permitting firms to “ease terms for new loans to affected borrowers, consistent with prudent banking practices.”
 
March 13, 2020
SEC TEMPORARY EXEMPTIVE RELIEF FOR FUNDS AND INVESTMENT ADVISERS


The SEC issued two orders providing temporary exemptive relief for funds and investment advisers affected by COVID-19, from certain requirements under the Investment Company Act of 1940 and the Investment Advisers Act of 1940 involving in person votes by boards of directors, as well as certain filing deadlines.
 
March 12, 2020
DFS ISSUES ORDER FOR TEMPORARY RELIEF FROM CERTAIN NY BANKING AND FINANCIAL SERVICES LAW REQUIREMENTS


The Superintendent of the DFS issued an order granting temporary relief from certain requirements of the New York Banking Laws and the New York Financial Services Laws and the regulations promulgated thereunder to regulated entities affected by COVID-19.  Key forms of relief include the modification of the DFS’s application requirements to close or relocate an authorized place of business, branch, office or location and a 45-day extension for certain compliance and reporting filings, including the certification of compliance with the DFS’s Part 504 transaction monitoring and filtering program requirements and the DFS’s cybersecurity program requirements.  Our client memo on the order is available here.
 
March 9, 2020
FINANCIAL INSTITUTION REGULATORS STATEMENT ENCOURAGING FIRMS TO WORK WITH CUSTOMERS AND BUSINESSES


The Fed, FDIC, OCC, NCUA, CFPB, and Conference of State Bank Supervisors issued a statement encouraging financial institutions to “meet the financial needs of customers and members affected by the coronavirus” and noting that “prudent efforts” that are consistent with safe and sound lending practices should not be subject to examiner criticism.”