Legislation and Regulation Tracker

Under the Investment Advisers Act order: (1) registered investment advisers and exempt reporting advisers affected by coronavirus are temporarily exempt from the requirement to file an amendment to Form ADV or file reports on Form ADV part 1A, respectively.

The SEC that will let corporations announce in regulatory filings that they are holding “virtual” shareholder meetings without incurring the additional cost of sending out a fresh proxy statement.

The swap margin rule would no longer require swap entities to hold initial margin for uncleared swaps with affiliates. However, inter-affiliate transactions would still be subject to variation margin requirements.

SEC due to COVID-19 does not expect to finish certain pending proposed rulemakings until at least late April, including proposals concerning a new accredited investor definition and resource extraction payment disclosures under Dodd-Frank (among others).

The Federal Reserve Board announced on March 17 that it will establish a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses. The Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the CPFF from the Treasury’s Exchange Stabilization Fund. CCMC issued a statement of support.

Published a final rule introducing a “stress capital buffer” (“SCB”) to integrate forward-looking stress test results with the agency’s non-stress capital requirements.

Under the Investment Advisers Act order: (1) registered investment advisers and exempt reporting advisers affected by coronavirus are temporarily exempt from the requirement to file an amendment to Form ADV or file reports on Form ADV part 1A, respectively; (2) registered investment advisers affected by coronavirus are temporarily exempt from requirements to deliver amended brochures, brochure supplements, or summary of material changes to clients where the disclosures are not able to be timely delivered because of circumstances related to coronavirus; and (3) private fund advisers affected by coronavirus are temporarily exempt from Form PF filing requirements.

Lenders will get Community Reinvestment Act (CRA) credit for lending that is “responsive to the needs of low- and moderate-income individuals, small businesses and small farms affected by COVID-19.

Interim final rule to allow banking organizations to neutralize the effects of purchasing assets through the program on risk-based and leverage capital ratios. The Agencies’ capital rule requires banking organizations to comply with risk-based and leverage capital requirements, which are expressed as a ratio of regulatory capital to assets.

Issued a notice stating that the agency “strongly recommends” the use of electronic methods for submitting licensing filings during the COVID-19 pandemic. To avoid potential processing delays associated with paper filings, the OCC recommends that licensing filings be submitted through the “Central Application Tracking System (CATS)” or through the agency’s secure email system.

New term sheet for the Money Market Mutual Fund Liquidity Facility detailing the expansion of the program “to enhance the liquidity and functioning of crucial state and municipal money markets.”

Issued an interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications.

Calling on banks and lenders to place a moratorium on foreclosures and waive ATM, late payment, and overdraft fees in the state.

To promote maximum employment and stable prices, along with its responsibilities to promote the stability of the financial system, the Federal Reserve is using its full range of authorities to provide powerful support for the flow of credit to American families and businesses. Taken together, these actions will provide support to a wide range of markets and institutions, thereby supporting the flow of credit in the economy.

Temporary flexibility for registered funds affected by recent market events to borrow funds from certain affiliates and to enter into certain other lending arrangements. Today’s relief is designed to provide funds with additional tools to manage their portfolios for the benefit of all shareholders as investors may seek to rebalance their investments.

In light of the challenges created by the COVID-19 outbreak, however, staff will not recommend the SEC take enforcement action with respect to the requirements of Rule 302(b) if: (1) a signatory retains a manually signed signature page or other document authenticating, acknowledging, or otherwise adopting his or her signature that appears in typed form within the electronic filing and provides such document, as promptly as reasonably practicable, to the filer for retention in the ordinary course pursuant to Rule 302(b); (2) such document indicates the date and time when the signature was executed; and (3) the filer establishes and maintains policies and procedures governing this process. The signatory may also provide to the filer an electronic record (such as a photograph or .pdf) of such document when it is signed.

The proposal would amend the FINRA suitability rule (Rule 2111) to: (1) state that it will not apply to recommendations subject to Regulation Best Interest; and; (2) remove the element of control from the quantitative suitability obligation.  The proposal would also conform the capital acquisition broker (CAB) suitability rule (CAB Rule 211) to the proposed amendments to Rule 2111 and would conform FINRA’s rules governing noncash compensation to Regulation Best Interest’s limitations on sales contests, sales quotas, bonuses, and noncash compensation.

Request that BCBS and IOSCO issue an immediate, public recommendation to global regulators to suspend the compliance dates for Phase 5 and 6, and that global regulators act swiftly to provide corresponding reassurance in their jurisdictions while they work to address necessary rule amendments or other means to effect this decision.

SEC is extending the filing periods covered by its previously-enacted conditional reporting relief for certain public company filing obligations under the federal securities laws; (2) that the SEC is extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19; and (3) the issuance of the SEC Division of Corporation Finance’s current views regarding disclosure considerations and other securities law matters related to COVID-19.

The Federal Reserve will not take action against a financial institution with $5 billion or less in total assets for submitting its March 31, 2020, Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) or Financial Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding Companies (FR Y-11) after the official filing deadline, as long as the applicable report is submitted within 30 days of the official filing due date.

The CFPB will not expect the reporting of certain information related to credit card and prepaid accounts under the Truth in Lending Act, Regulation Z, and Regulation E.  This includes: (1) the annual submissions concerning agreements between credit card issuers and institutions of higher education; (2) quarterly submission of consumer credit card agreements; (3) collection of certain credit card price and availability information; and (4) submission of prepaid account agreements and related information.

An order granting temporary exemptive relief from certain requirements of Rule 606 of Regulation NMS considering unforeseen and uncertain demands on information technology and other resources required to respond to COVID-19. The SEC is providing that: (1) broker-dealers are exempt from the requirement to provide the public report covering the first quarter of 2020 required by Rule 606(a) until May 29, 2020; and (2) broker-dealers that engage in outsourced routing activity are exempt from the requirement to collect the monthly customer-specific data under Rule 606(b)(3) for such activity until June 1, 2020, and are exempt until July 29, 2020 from the requirement to provide a customer-specific report of June 2020 outsourced routing data within seven business days for customer requests for such customer-specific reports that are made on or before July 17, 2020.

An interim final rule that revises the definition of eligible retained income for purposes of the Board’s total loss-absorbing capacity (TLAC) rule. The revised definition of eligible retained income will make any automatic limitations on capital distributions that could apply under the TLAC rule more gradual and aligns to recent action taken by the Board and the other Federal banking agencies in the capital rule.

An order providing temporary relief under the Investment Company Act of 1940 for registered funds to borrow funds from affiliates and to enter certain other lending arrangements considering the COVID-19 pandemic. Specifically, the order provides: (1) relief permitting registered open-end funds and insurance company separate accounts to borrow money from certain affiliates; (2) relief permitting additional flexibility under existing interfund lending arrangements and extends the ability to use interfund lending arrangements to funds that do not currently have exemptive relief; and (3) relief permitting registered open-end funds to enter into lending arrangements or borrowings that deviate from fundamental policies, subject to prior board approval.

Issued the Statement on Part 363 Annual Reports in Response to the Coronavirus to provide additional information and guidance to insured depository institutions (IDIs) subject to Part 363 of the FDIC's regulations that have been affected by the Coronavirus Disease 2019 (referred to as COVID-19).

Announced new guidance on payroll support to aid airline industry employees and guidance on loans to airline industry and businesses critical to national security, pursuant to the CARES Act. 

Launch of the “Employee Retention Credit” designed to encourage businesses to keep employees on their payroll. The refundable tax credit is available to all employers, regardless of size, and covers 50 percent of qualifying wages up to $10,000 paid by an eligible employer whose business has been financially impacted by COVID-19.

In January, the Board finalized a revised framework that simplifies and increases the transparency of its rules for determining when one company controls another company for purposes of the Bank Holding Company Act and Home Owners' Loan Act.

Notice in the Federal Register permitting banking organizations to early adopt the “standardized approach for measuring counterparty credit risk (SA-CCR)” rule for the reporting period ending March 31, 2020 in response to the COVID-19 pandemic.

An order granting temporary exemptive relief from certain requirements of Rule 606 of Regulation NMS in light of unforeseen and uncertain demands on information technology and other resources required to respond to COVID-19.

Issued a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In particular, the statement informs lenders that they must comply with the CARES Act, which requires lenders to report to credit bureaus that consumers are current on their loans if consumers have sought relief from their lenders due to the pandemic. The statement also encourages lenders to continue to voluntarily provide payment relief to consumers and to report accurate information to credit bureaus relating to this relief. Moreover, in response to staffing and resources constraints on lenders and credit bureaus due to the pandemic, the statement also provides flexibility for lenders and credit bureaus in the time they take to investigate disputes. The CFPB specifically states that it does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes as long as they make good faith efforts during the pandemic to do so as quickly as possible.

In response to the COVID-19 pandemic, the Federal Reserve, CFTC, FDIC, OCC, and SEC have jointly announced that they will consider comments on their February 28, 2020 proposal to modify the Volcker Rule’s general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds until May 1, 2020. Comments on the proposal were originally due by April 1, 2020.

Announced a delayed effective date for its March 2, 2020 final rule related to determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the Bank Holding Company (“BHC”) Act or the Home Owners’ Loan Act (“HOLA”).  We notified you on March 31, 2020 when the Federal Reserve originally announced this delay.  This final rule, which was originally slated to be effective on April 1, 2020, will now take effect on September 30, 2020.

Issued a new document updating its original March 16, 2020 notice providing additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the COVID-19 pandemic and announcing a direct contact mechanism for urgent COVID-19-related issues. Of particular note, FinCEN states that for eligible federally-insured depository institutions and federally insured credit unions, loans under the new “Paycheck Protection Program” (PPP) for existing customers will not require re-verification under applicable BSA requirements, unless otherwise indicated by the institution’s risk-based approach to BSA compliance. However, For non-PPP loans, FinCEN reminds financial institutions of FinCEN’s September 7, 2018 ruling offering certain exceptive relief to beneficial ownership requirements.

FDIC announced that it will extend the comment period for its February 10, 2020 proposed rule to modernize its brokered deposit regulations from April 10, 2020 to June 9, 2020. Overall, the proposed rule aims to establish a new framework for analyzing whether deposits placed through deposit placement arrangements qualify as brokered deposits. These include arrangements between insured depository institutions (“IDIs”) and third parties, such as financial technology companies, for a variety of business purposes, including access to deposits, as well as IDIs’ increasing reliance on new technologies to engage and interact with their customers.

To facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program (PPP), the Federal Reserve will establish a facility to provide term financing backed by PPP loans. Additional details will be announced.

Announced support for FinCEN’s Bank Secrecy Act compliance notice (issued on April 3, 2020) and encouraging all banks to follow a risk-based approach to managing their BSA compliance programs. When evaluating a bank’s BSA compliance program, the OCC states that it will consider the actions taken by banks to protect and assist employees, customers, and others in response to the COVID-19 pandemic, including any reasonable delays in BSA report filings, beneficial ownership verification or re-verification requirements, and other risk management processes. Banks are encouraged to contact their examiners if they anticipate delays.

Issuance of a new order providing temporary, conditional exemptive relief for business development companies to enable them to make additional investments in small and medium-sized businesses, including those with operations affected by COVID-19.

The Federal Reserve and Treasury issued parallel press releases regarding additional actions to provide up to $2.3 trillion in loans to support the economy, including through the establishment of the “Main Street Business Lending Program” and a “Municipal Liquidity Facility.”

Seeking public feedback on the topics and issues to be addressed by the Climate-Related Market Risk Subcommittee under the Market Risk Advisory Committee (“MRAC”). The Subcommittee was established to provide a report to the MRAC to identify and examine climate change-related financial and market risks, including for derivatives markets. Specifically, the Subcommittee is directed to focus on: (1) identifying challenges or impediments to evaluating and managing climate-related financial and market risks; (2) identifying how market participants can improve integration of climate-related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting; (3) identifying policy initiatives and best practices for risk management and disclosure of financial and market risks related to climate change that support financial stability; (4) identifying appropriate methods by which market participants’ data and analyses can enhance and contribute to the assessment of climate-related financial and market risks and their potential impacts on agricultural production, energy, food, insurance, real estate, and other financial stability indicators; and (5) identifying financial and market risks arising from potential economic policy responses to climate change.

CFTC Unanimously Approves 3 Proposed Rules, 2 Final Rules at April 14 Open Meeting

Public teleconference meetings of the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), Credit Union Advisory Council (CUAC), and Academic Research Council (ARC) on May 1, 2020 to discuss impacts on consumers related to the COVID-19 pandemic.

Proposed rule to revise its regulations at 17 CFR 43 regarding real-time public reporting and dissemination requirements for swap data repositories (SDRs), derivatives clearing organizations (DCOs), swap execution facilities (SEFs), designated contract markets (DCMs), swap dealers (SDs), major swap participants (MSPs), and swap counterparties that are neither SDs nor MSPs. Overall, the CFTC is proposing revisions to the following aspects of the real-time public reporting regulations: (1) the method and timing of real-time reporting and public dissemination, generally and for specific types of swaps; (2) the delay and anonymization of the public dissemination of block trades or large notional trades; (3) the standardization and validation of real-time reporting fields; (4) the delegation of specific authority to CFTC staff; and (4) the clarification of specific real-time reporting questions and common issues.

Announced the issuance of a new interim final rule to temporarily modify the agency’s regulations so that certain bank directors and shareholders can apply for Paycheck Protection Program (PPP) loans for their small businesses. The Federal Reserve notes that the SBA recently clarified that PPP lenders can make PPP loans to businesses owned by their directors and certain shareholders, subject to certain limits and without favoritism. This interim rule change will allow those individuals to apply for PPP loans, consistent with SBA’s regulations and restrictions.

Proposed amendments to parts 23, 43, 45, and 49 of the Commission’s regulations to improve the accuracy of data reported to, and maintained by, swap data repositories (‘‘SDRs’’). Among other changes, the proposed amendments would modify existing requirements for SDRs to establish policies and procedures to confirm the accuracy of swap data with both counterparties to a swap. The proposed amendments would further require reporting counterparties to verify the accuracy of swap data pursuant to those SDR procedures. The Commission is also proposing certain amendments to parts 23, 43, 45, and 49 to provide enhanced and streamlined oversight over SDRs and data reporting generally.

Interim final rule detailing additional eligibility criteria and requirements for certain pledges of loans pursuant to the “Paycheck Protection Program” (PPP), which was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As you are aware, under the PPP, the SBA provides loans with a maturity of two years and an interest rate of 1 percent in order to incentivize small businesses to keep their workers on the payroll. Loans under the PPP will be 100 percent guaranteed by SBA, and the full principal amount of the loans and any accrued interest may qualify for loan forgiveness.

Issued a press release announcing the issuance of exemptive orders regarding the implementation of the Consolidated Audit Trail (CAT) that: (1) establish a phased CAT reporting timeline for broker-dealers; and (2) permit introducing brokers that meet certain requirements to follow the small broker-dealer reporting timeline.

Published a temporary final rule that temporarily raises the maximum aggregate amount of loan participations that a federally-insured credit union may purchase from a single originating lender without needing a waiver from an NCUA regional director. Under this rule, the aggregate loan participation amount from a single originating lender will now be the greater of $5 million or 200 percent of a federally-insured credit union’s net worth.

The rule is designed to clarify how fund boards can satisfy their valuation obligations in light of market developments, including an increase in the variety of asset classes held by funds and an increase in both the volume and type of data used in valuation determinations.

Announced that it is working to expand access to its Paycheck Protection Program Liquidity Facility for additional SBA-qualified lenders.

Announced a new policy statement aimed at increasing the availability of intraday credit extended by Federal Reserve Banks on both a collateralized and uncollateralized basis.

Announced the issuance of a new staff letter providing additional targeted no-action relief to futures commission merchants (FCMS) and introducing brokers (IBs) in response to the COVID-19 pandemic. Specifically, DSIO has granted targeted no-action relief to permit eligible FCMs and IBs taking advantage of covered loans under the Paycheck Protection Program to add back to capital certain amounts under covered loans that are forgivable in accordance with Regulation 1.17 (“Minimum financial requirements for futures commission merchants and introducing brokers”). In order to further align this targeted relief with that issued by the Financial Industry Regulatory Authority (FINRA), DSIO has also granted targeted no-action relief to IBs and FCMs who are permitted by FINRA to add-back for capital purposes accrued FINRA annual assessment fees.

Published a joint interim final rules intended to provide temporary relief to community banking organizations. The first rule provides that a banking organization that has a leverage ratio of eight percent or greater and meets certain other criteria may elect to use the community bank leverage ratio framework.

The SEC published an exemptive order intended to further the implementation of the Consolidated Audit Trail allowing for equity and options reporting in phases, taking into account the complexity of reporting events.

Proposed rule change from the Municipal Securities Rulemaking Board (MSRB) to provide dealers and municipal advisors additional time to comply with certain obligations for a temporary period of time and temporarily suspend late fees on payments owed to the MSRB. Noting that dealers and municipal advisors are facing unprecedented challenges due to the COVID-19 pandemic, the MSRB is specifically proposing to: (1) suspend late fees owed for the period of March 1, 2020 through July 31, 2020; (2) establish that certain supervisory compliance obligations shall be deemed to have been timely completed for calendar year 2020, provided that such supervisory obligations are completed on or before March 31, 2021; and (3) extend the compliance date of rule changes that have yet to be implemented, including the amended and restated guidance regarding the fair dealing obligations underwriters owe to issuers of municipal securities under MSRB Rule G-17, as well as amendments to Form G-32 are designed to collect new data elements from underwriters related to primary offerings of municipal securities through the MSRB’s “Electronic Municipal Market Access Dataport” system.

Additional FAQs to its Paycheck Protection Program guidance to reduce the likelihood of PPP loans going to large companies. New FAQ 31 cautions that a public company with substantial market value and access to capital markets will likely not be able to make the required PPP certifications in good faith that their PPP loan request is necessary. This FAQ also provides that any borrower that applied for a PPP loan prior to the issuance of this guidance and can repay the loan in full by May 7, 2020 and will be deemed by SBA to have made the required certification in good faith—implying they will avoid future scrutiny as to the veracity of their certifications.

Published an interpretive rule providing guidance to government agencies distributing aid to consumers in response to the COVID-19 pandemic. The rule concludes that, if certain conditions are met, certain pandemic-relief payments are not “government benefits” for purposes of Regulation E and thus these payments are not subject to the compulsory use prohibition in the Electronic Funds Transfer Act and its implementing Regulation E. Specifically, government benefits do not include payments from federal, state, or local governments if those payments: (1) are made to provide assistance to consumers in response to the COVID-19 pandemic or its economic impacts; (2) are not part of an already-established government benefit program; (3) are made on a one-time or otherwise limited basis; and (4) are distributed without a general requirement that consumers apply to the agency to receive funds.

Announced a virtual meeting of the Investor Advisory Committee at 2pm ET on May 4, 2020 to discuss: (1) public company disclosure considerations in the context of the COVID-19 pandemic; and (2) public company shareholder engagement/virtual shareholder meetings in the context of the COVID-19 pandemic.

Announced three new guidance documents regarding ERISA health and retirement plan compliance during the COVID-19 national emergency: (1) a joint final rule with the Treasury Department extending certain timeframes for ERISA retirement and health plans; (2) a series of new FAQs on ERISA health and retirement benefit matters that has some important COBRA information; and (3) a new “Disaster Relief Notice” extending the time for plan officials to furnish benefit statements, annual funding notices, and other notices and disclosures required by ERISA.

Policy statement adjusting the manner in which the Reserve Banks administer part II of the agency’s “Policy on Payment System Risk.”

Interim final rule regarding its Central Liquidity Facility. The Central Liquidity Facility is a mixed-ownership government corporation created to improve the general financial stability of credit unions. It provides the credit union system a vital contingent source of funds to assist with system-wide liquidity events. Member credit unions own the Central Liquidity Facility, which exists within the NCUA. Joining the facility is voluntary.

Interpretive rule intended to streamline the ability of consumers with urgent financial needs to obtain access to mortgage credit more quickly during the COVID-19 crisis. Specifically, the rule clarifies that if a consumer determines that his or her need to obtain funds due to the COVID-19 pandemic necessitates consummating the credit transaction before the end of the TILA-RESPA Integrated Disclosure Rule waiting periods, or must be met before the end of the Regulation Z’s right of rescission rules waiting period, the consumer has a bona fide personal financial emergency that would permit the consumer to utilize the modification and waiver provisions.

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or the Act) authorizes the U.S. Department of the Treasury (Treasury) to issue regulations for the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA), including regulations that allow additional lenders to originate loans and establish terms and conditions. In this interim final rule, Treasury authorizes all lenders eligible to originate loans under the PPP to use an alternative criterion for calculating the maximum loan amount for PPP loans issued to seasonal employers.

Announced expanding access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders and is expanding the collateral that can be pledged. As a result of the changes, all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. Additionally, eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral to the PPPLF. An institution that pledges a purchased PPP loan will need to provide the Reserve Bank with documentation from the SBA demonstrating that the pledging institution is the beneficiary of the SBA guarantee for the loan.

Announced the release of a new report examining the effects of the COVID-19 pandemic and finding that consumer credit applications declined substantially in March 2020. In particular, the report found that between the first and last week of March 2020, auto loan inquiries dropped by 52 percent, new mortgage inquiries dropped by 27 percent, and revolving credit card inquiries declined by 40 percent compared to usual patterns seen in the data in earlier years.

Q&As addressing coronavirus-related relief for retirement plans and IRAs. Specifically, the IRS is addressing Section 2202 of the CARES Act, which provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (such as section 401(k) and 403(b) plans and IRAs) to qualified individuals, as well as special rollover rules with respect to such distributions. Section 2202 also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans.

An interpretive rule intended to allow consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic. The CFBP’s TILA-RESPA Integrated Disclosure (TRID) Rule and the Regulation Z Rescission Rules implement the Truth in Lending Act (TILA). The TRID Rule imposes certain disclosure requirements and waiting periods related to mortgage transactions. The Regulation Z Rescission Rules provide consumers with the right to rescind certain credit transactions secured by their principal dwelling. The Regulation Z Rescission Rules also impose waiting periods.

Interim final rule limits to $20 million the amount of PPP loans that any single corporate group may receive. For purposes of this $20 million limit, businesses are part of a single corporate group if they are majority owned, directly or indirectly, by a common parent. Borrowers who have applied for or received more than $20 million in loans must withdraw or cancel any pending application or approved loan over the limit. Failure to do so will be regarded as a use of PPP funds for “unauthorized purposes” and the loan will not be eligible for forgiveness. These interim final rules are effective today, May 4, 2020, and are subject to a June 3, 2020 comment deadline.

Renewed the charter for its Market Risk Advisory Committee (MRAC) for an additional two years. The MRAC was formed in May 2014 to advise the CFTC on matters of public concern to the Commission, clearinghouses, exchanges, intermediaries, market makers, and end-users regarding systemic issues that threaten the stability of the derivatives markets and other financial markets, and to assist the CFTC in identifying and understanding the impact and implications of an evolving market structure and movement of risk across clearinghouses, intermediaries, market makers and end-users.

New FAQs intended to support small businesses who have applied for a loan from their financial institution under the Paycheck Protection Program. Creditors are generally required under the Equal Credit Opportunity Act and Regulation B to notify applicants within 30 days of receiving a “completed application” of the creditor’s approval, counteroffer, denial or other adverse notice regarding the application. The FAQs clarify that a Paycheck Protection Program application is only a “completed application” once the creditor has received a loan number from the SBA or a response about the availability of funds. This ensures that the time awaiting this information from the SBA does not count towards the 30-day notice requirement, and that applications will therefore not “time out” during the process. The FAQs also make clear that if the creditor denies an application without ever sending the application to the SBA, the creditor must give notice of this adverse action within 30 days. The document further clarifies that a creditor cannot deny a loan application based on incompleteness where the creditor has enough information for a credit decision but has yet to receive a loan number or response about the availability of funds from the SBA.

Issued an interagency policy statement on allowances for credit losses. The policy statement describes the measurement of expected credit losses using the current expected credit losses (CECL) methodology and updates concepts and practices detailed in existing supervisory guidance that remain applicable. The agencies simultaneously announced additional interagency guidance addressing credit risk review systems, which presents principles for establishing a system of independent, ongoing credit risk review in accordance with safety and soundness standards.

Final rule amending the margin requirements for uncleared swaps for swap dealers (SD) and major swap participants for which there is no prudential regulator. Specifically, this rule adds the European Stability Mechanism (ESM) to the list of entities that are expressly excluded from the definition of “financial end user” in the CFTC’s 2016 “Margin Rule” and corrects an erroneous cross-reference in the CFTC’s regulations. The ESM is an intergovernmental financial institution that provides financial assistance for national or regional development to Euro area member states that are in or are threatened by severe financial distress – similar to other entities listed as multilateral development banks which are excluded from the definition of financial end user in the CFTC’s regulations.

Announced that the Municipal Securities Rulemaking Board (MSRB) has filed a proposed rule change to align its regulations with Regulation Best Interest. The rule change consists of amendments to: (1) MSRB Rule G-8 on books and records; (2) MSRB Rule G-9 on preservation of records; (3) MSRB Rule G-19 on suitability of recommendations and transactions; (4) MSRB Rule G-20 on gifts, gratuities, non-cash compensation and expenses of issuance; (5) MSRB Rule G-48 on transactions with “Sophisticated Municipal Market Professionals” (SMMPs); and (6) the deletion of an interpretation of MSRB Rule G-20.

Published a final rule amending its Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The final rule amends Regulation C to increase the permanent threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100 loans, effective July 1, 2020. The rule also amends Regulation C to increase the permanent threshold for collecting and reporting data about open-end lines of credit from 100 to 200, effective January 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires. Recognizing the operational challenges confronted by institutions due to the COVID-19 pandemic, the CFPB has stated its expectation that this final rule will “reduce regulatory burden on smaller institutions to help those institutions to focus on responding to consumers in need now and in the longer term.”

Final rule amending its regulations for securities clearing agencies to subject all SEC-registered central counterparties (CCPs) and central securities depositories (CSDs) to enhanced standards. Previously, in 2012, the SEC finalized Rule 17Ad-22 under the Securities Exchange Act of 1934, which set regulatory standards for registered clearing agencies. In 2016, the SEC supplemented these standards by establishing requirements for registered clearing agencies that meet the definition of a “covered clearing agency” in Rule 17Ad-22(e). The final rule is intended to clarify and expand upon the definitions of “covered clearing agency” in Rule 17Ad-22(a)(5), “central securities depository services” in Rule 17Ad-22(a)(3), and “sensitivity analysis” in Rule 17Ad-22(a)(16). This final rule is effective as of July 13, 2020.

Announced the temporary approval of revisions to its existing information collection request (ICR) for Form FR A, “Reporting Requirements Associated with Emergency Lending Under Section 13(3).” The Federal Reserve’s Regulation A establishes policies and procedures with respect to emergency lending under section 13(3) of the Federal Reserve Act, as required by sections 1101 and 1103 of the Dodd-Frank Act. These policies and procedures include: (1) a certification that a participant in a lending facility is not insolvent; and (2) a certification that a participant in a lending facility is unable to secure adequate credit accommodations from other banking institutions. Currently, the FR A includes only the former certification because the latter was unintentionally omitted. In addition to the two certifications in Regulation A that apply to all emergency lending authorized under section 13(3), the Federal Reserve also has the authority to establish additional certification requirements for an individual emergency lending facility. Depending on the requirements of a particular lending facility, the Federal Reserve notes that there may be a need to vary the certifications, depending on the facts and circumstances.

New set of measures to support the financial sector as it aims to recover from the economic fallout of the COVID-19 pandemic. Overall, the ESRB’s actions are in line with its five “priority areas” with respect to COVID-19: (1) system-wide restraints on dividend payments, share buybacks, and other pay-outs (which echo similar calls from Congressional Democrats for the elimination of dividend payments by U.S. banks during the crisis); (2) implications for the financial system of guarantee schemes and other fiscal measures to protect the real economy; (3) market illiquidity and implications for asset managers and insurers; (4) the impact of large scale downgrades of corporate bonds on markets and entities across the financial system; and (5) liquidity risks arising from margin calls.

Final rule correcting one of its regulations to restore text that was inadvertently deleted in a 2011 amendment. Section 501 of Title V of the Gramm-Leach-Bliley Act (“Title V”) mandates that certain agencies covered by Title V establish appropriate safeguards for the financial institutions subject to their jurisdiction relating to administrative, technical and physical safeguards: (1) to insure the security and confidentiality of customer records and information; (2) to protect against any anticipated threats or hazards to the security or integrity of such records; and (3) to protect against unauthorized access to or use of such records or information which could result in substantial harm or inconvenience to any customer. The CFTC and entities subject to its jurisdiction were originally excluded from Title V’s coverage. However, section 124 of the Commodity Futures Modernization Act of 2000 amended the Commodity Exchange Act to add section 5g, providing that futures commission merchants (“FCMs”), commodity trading advisors (“CTAs”), commodity pool operators (“CPOs”), and introducing brokers (“IBs”) fall under the requirements of Title V and requiring the CFTC to prescribe regulations in furtherance of Title V. Thus, in 2001, the CFTC promulgated part 160 of its regulations to establish standards relating to Title V, and, specifically, § 160.30 in relation to section 501’s mandate. This final rule is effective as of June 17, 2020.

Interim final rule provides additional guidance on the ability to increase certain PPP loans. On April 14, 2020, the SBA posted an interim final rule that, among other things, provided guidance for individuals with self-employment income. The interim final rule stated, “if you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership.” On April 28, 2020, the Treasury Department posted a separate interim final rule that provided an alternative criterion for calculating the maximum loan amount for PPP loans issued to seasonal employers.

Announced the issuance of its final rule regarding the Community Reinvestment Act (CRA) and published a related statement from Comptroller of the Currency Joseph Otting.

Announced that on June 17 it will begin taking requests for emergency loans under its Term Asset-Backed Securities Loan Facility (TALF), which will lend to companies against collateral ranging from bundled credit card loans to packages of loans to highly indebted businesses. Under the TALF, the New York Fed will lend to a special purpose vehicle which will provide non-recourse funding secured by eligible collateral to eligible borrowers. The New York Fed also released an expanded set of Frequently Asked Questions and other documents pertaining to the facility’s operations.

Proposed rule to establish a new regulatory capital framework for Fannie Mae and Freddie Mac (the Enterprises), based on a proposal originally issued in July 2018. The FHFA notes that the new proposed rule is intended to preserve the mortgage risk-sensitive framework of the 2018 proposal while increasing the quantity and quality of the Enterprises’ regulatory capital and reducing the pro-cyclicality of the aggregate capital requirements. Together, the FHFA states that the new proposed rule will ensure each Enterprise’s ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress, and represents a “critical step” toward responsibly ending the conservatorships.

Interim final rule for the Paycheck Protection Program (PPP) outlining additional eligibility requirements for entities with foreign affiliates. As you are aware, under the PPP, the SBA provides loans with a maturity of two years and an interest rate of 1 percent in order to incentivize small businesses to keep their workers on the payroll. Loans under the PPP will be 100 percent guaranteed by SBA, and the full principal amount of the loans and any accrued interest may qualify for loan forgiveness.

Amendments to the National Market System plan governing the Consolidated Audit Trail (CAT NMS Plan). The amendments will require the Plan participants to publish and file with the SEC a complete implementation plan for the CAT as well as quarterly progress reports. Each of the reports must be approved by the Operating Committee established under the CAT NMS Plan and submitted to the CEO, President, or an equivalently situated senior officer at each participant. In addition, the amendments include financial accountability provisions that establish target deadlines for certain implementation milestones and reduce the amount of fee recovery available to the participants if those target deadlines are missed.

Final rule renewing the reporting requirements for the mandatory BE-180, “Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons.” The BE-180 benchmark survey is conducted once every five years and is intended to cover the universe of financial services transactions of U.S. financial services companies with foreign persons.

Issued a series of 13 interagency FAQs related to the Community Reinvestment Act (CRA) and the coronavirus pandemic. In particular, the FAQs clarify that: (1) agencies will consider COVID-19-affected areas under major disaster declarations (including all 50 states, D.C., and certain territories) as disaster areas for CRA purposes for a period extending six months after the disaster declaration is lifted; (2) banks will receive favorable CRA consideration for “community development activities that are responsive to community needs and conducted in response to COVID-19;” (3) Paycheck Protection Program (PPP) loans will be considered “particularly responsive” to community needs when made to businesses with gross annual revenues of $1 million or less or to businesses located in low-to-moderate-income geographies or distressed or underserved non-metropolitan, middle-income locales; (4) PPP loans of greater than $1 million may qualify as community development loans if they also have a primary purpose of community development; (5) PPP loans for $1 million or less will qualify as small business loans; (6) Main Street Lending Program loans that meet relevant CRA requirements may receive CRA consideration; and (7) cashing Economic Impact Payment checks for non-customers at no charge and waiving late fees and overdraft charges are examples of “particularly responsive” services for low- and moderate-income individuals.

Final rule creating a new “safe harbor” for the use of electronic media by employee benefit plans to furnish information to participants and beneficiaries of plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).

Final rule amending the compliance dates related to “Single-Counterparty Credit Limits (SCCLs) for Bank Holding Companies and Foreign Banking Organizations” (SCCL Rule), which was published on August 6, 2018 and establishes SCCLs for bank holding companies and foreign banking organizations (FBOs) with total consolidated assets of at least $250 billion.

Interim final rule temporarily modifying certain regulatory requirements to help ensure that federally insured credit unions (FICUs) remain operational and liquid during the COVID-19 crisis. Specifically, the NCUA is issuing two temporary changes to its “prompt corrective action” (PCA) regulations. The first change amends the NCUA’s regulations to temporarily enable the agency to issue an order applicable to all FICUs to waive the earnings retention requirement for any FICU that is classified as adequately capitalized. The second change modifies the NCUA’s regulations with respect to the specific documentation required for net worth restoration plans for FICUs that become undercapitalized.

Final rule clarifying that when a national bank or savings association sells, assigns, or otherwise transfers a loan, interest permissible before the transfer continues to be permissible after the transfer. Acting Comptroller of the Currency Brian P. Brooks issued a related statement noting that this rule is intended to respond to recent developments (i.e., the Second Circuit’s Madden v. Midland Funding, LLC decision) that created uncertainty concerning the effect of a transfer on a loan’s permissible interest rate.

Interagency policy statement on allowances for credit losses (ACLs). In particular, this policy statement describes: (1) the measurement of expected credit losses under the current expected credit losses (CECL) methodology and the accounting for impairment on available-for-sale debt securities in accordance with FASB ASC Topic 326; (2) the design, documentation, and validation of expected credit loss estimation processes, including the internal controls over these processes; (3) the maintenance of appropriate ACLs; (4) the responsibilities of boards of directors and management; and (5) examiner reviews of ACLs

Final rule modifying the registration, communications, and offering processes available to business development companies and registered closed-end funds (collectively, affected funds) to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Interim final rule on PPP loan review procedures and borrower / lender responsibilities specifically contains provisions: (1) establishing that the SBA may review any PPP loan, within six years after the date the loan is forgiven or repaid in full, to determine borrower eligibility under the CARES Act, the accuracy of PPP loan calculations, use of PPP funds for eligible costs, and eligibility for loan forgiveness; (2) providing that borrowers may appeal SBA determinations within 30 days of receipt (subject to an appeals process that will be outlined in a future interim final rule); (3) requiring lenders to make a determination regarding PPP loan forgiveness within 60 days of receiving a loan forgiveness application from a borrower (subject to a separate 90-day window for SBA review of the application); and (4) establishing that lenders will not be paid their fees for any PPP loans that the SBA deems ineligible and creating a one-year “clawback” provision for bank fees on these loans.

Interim final rule implementing temporary changes to their supplementary leverage ratio rule. The supplementary leverage ratio generally includes subsidiaries of bank holding companies with more than $250 billion in total consolidated assets. Covered entities are required to hold a minimum ratio of three percent, measured against their total leverage exposure, with more stringent requirements for the largest and most systemic financial institutions. The interim final rule permits depository institutions to choose to exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the supplementary leverage ratio. If a depository institution does change its supplementary leverage ratio calculation, it will be required to request approval from its primary federal banking regulator before making capital distributions, such as paying dividends to its parent company, as long as the exclusion is in effect.

Expansion in the number and type of entities eligible to directly use its Municipal Liquidity Facility (MLF). Under the new terms, all U.S. states will be able to have at least two cities or counties eligible to directly issue notes to the MLF regardless of population. Governors of each state will also be able to designate two issuers in their jurisdictions whose revenues are generally derived from operating government activities (such as public transit, airports, toll facilities, and utilities) to be eligible to directly use the facility. In addition to these expanded terms, the MLF continues to be directly open to U.S. states, the District of Columbia, U.S. cities with a population of at least 250,000 residents, U.S. counties with a population of at least 500,000 residents, and certain multistate entities.

Providing “temporary and targeted flexibility” for credit card issuers regarding electronic provision of certain disclosures required to be in writing during the COVID-19 pandemic. Regulation Z generally requires that credit card issuers provide disclosures to consumers in writing. Where underlying law, such as Regulation Z, requires a written disclosure to a consumer, the consumer consent provisions of the E-Sign Act allow the disclosure to be provided electronically subject to certain requirements. Per this statement, the CFPB will take a “flexible” supervisory and enforcement approach during the COVID-19 pandemic regarding card issuers’ electronic provision of account-opening disclosures and temporary rate or fee reduction disclosures mandated under the provisions governing non-home secured, open-end credit in Regulation Z. Specifically, the statement pertains to oral telephone interactions where a card issuer may seek to open a new credit card account for a consumer, to provide certain temporary reductions in APRs or fees applicable to an existing account, or to offer a low-rate balance transfer. In these instances, the CFPB does not intend to cite a violation in an examination or bring an enforcement action against an issuer that during a phone call does not obtain a consumer’s E-Sign consent to electronic provision of the written disclosures required by Regulation Z, so long as the issuer during the phone call obtains both the consumer’s oral consent to electronic delivery of the written disclosures and oral affirmation of his or her ability to access and review the electronic written disclosures. In addition, the CFPB expects that issuers will take reasonable steps during the phone call to verify consumers’ electronic contact information.

Final rule to strengthen and modernize the Community Reinvestment Act (CRA) by clarifying and expanding the activities that qualify for CRA credit; updating where activities count for CRA credit; creating a more consistent and objective method for evaluating CRA performance; and providing for more timely and transparent CRA-related data collection, recordkeeping, and reporting.

Proposed rule from the MSRB to amend MSRB Rule A-13 regarding underwriting and transaction assessments for brokers, dealers, and municipal securities dealers. Specifically, the rule would waive certain underwriting, transaction, and technology assessments (collectively, market activity fees) related to transactions with the Federal Reserve’s Municipal Liquidity Facility (MLF).

Proposed rule concerning the anticipated discontinuation of LIBOR. Specifically, the CFPB is proposing changes to certain open-end and closed-end provisions to provide examples of replacement indices for LIBOR indices that meet certain Regulation Z standards. The CFPB is also proposing changes to certain open-end provisions restricting index changes, requiring change-in-terms notices, and addressing how credit card rate reevaluation requirements apply. Comments on the proposed rule will be due by August 4, 2020. The CFPB has simultaneously posted: (1) a set of FAQs addressing LIBOR transition topics and regulatory questions, including issues related to general implementation considerations, requirements for adjustable-rate mortgage servicing notices, adjustable-rate mortgage and home equity lines of credit origination disclosures, and requirements under the Alternative Mortgage Transaction Parity Act; and (2) an updated Consumer Handbook on Adjustable Rate Mortgages (CHARM) to help consumers better understand adjustable rate mortgage loan products.

Proposed rule to amend its regulations at 17 CFR 190 governing bankruptcy proceedings for commodity brokers, including futures commission merchants (FCMs) and derivatives clearing organizations (DCOs). The CFTC notes that these regulations have not been comprehensively updated since their adoption in 1983. As a result, the CFTC states that the proposed rule is intended to reflect several major changes to the industry over the past 37 years, including the exponential growth in the speed of transactions and trade processing. In addition, the CFTC observes that important lessons have been learned over prior bankruptcies, including the need for administrative arrangements that are specific to the circumstances of the individual bankruptcy and the success of an approach, consistent with applicable statutes, that prioritizes cost effectiveness and promptness over precision. Finally, the CFTC states that DCOs have become increasingly important to the financial system since the 1980s.

Order providing temporary conditional relief to registered municipal advisors (MAs) from the potential application of broker-dealer registration requirements in connection with certain direct placement of municipal securities. This temporary exemption permits MAs to solicit banks, their wholly-owned subsidiaries that are engaged in commercial lending and financing activities, and credit unions (collectively, Qualified Providers) in connection with direct placements of securities issued by their municipal issuer clients. The SEC notes that the temporary exemption is subject to a number of conditions specifically designed to protect investors, including: (1) MAs must obtain written representations from the Qualified Provider, which limits the potential investor base for direct placements issued pursuant to the temporary exemption to institutions that routinely engage in credit risk analysis (and typically do so consistent with their commercial lending practices and regulatory obligations) and typically do not resell such securities to retail investors; (2) MAs must make written representations, which protect potential investors by putting them on notice of what duties and obligations the municipal advisor will undertake in connection with the transaction; (3) MAs must obtain written representations from the Qualified Provider(s) regarding the temporary exemption’s investor eligibility and transfer restriction conditions; and (4) MAs must notify SEC staff of any instances of reliance on the exemption to keep the SEC informed about how the exemption may affect the municipal securities market.

Request for information (RFI) regarding “Pooled Employer Plans” (PEPs) under the Setting Every Community Up for Retirement Enhancement (SECURE) Act and other multiple employer plans. The SECURE Act amended the Employee Retirement Income Security Act of 1974 (ERISA) to allow for PEPs, which are individual account plans established or maintained for the purpose of providing benefits to the employees of two or more employers that are treated as a single employee pension benefit plan or single pension plan for purposes of ERISA. PEPS are required to designate a pooled plan provider that is a named fiduciary of the PEP. As a fiduciary, the pooled plan provider is subject to standards and restrictions in ERISA and the Internal Revenue Code, including the prohibited transaction provisions restricting fiduciaries of plans from engaging in conflict of interest transactions.

Pilot advisory opinion (AO) program to publicly address regulatory uncertainty in the agency’s existing regulations. The pilot AO program will allow entities seeking to comply with regulatory requirements to submit a request where uncertainty exists. The CFPB will then select topics based on the program’s priorities and make the responses available to the public. The CFPB states that the pilot program will focus on four key priorities: (1) ensuring that consumers are provided with timely and understandable information to make responsible decisions; (2) identifying outdated, unnecessary, or unduly burdensome regulations in order to reduce regulatory burdens; (3) ensuring consistency in enforcement of federal consumer financial law in order to promote fair competition; and (4) ensuring markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.

Final modifications to the “covered fund” provisions of the 2013 Volcker Rule, which generally prohibits banking entities from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds. Overall, the agencies assert that this “Volcker 2.1” final rule will: (1) facilitate capital formation by providing banking entities greater flexibility in sponsoring funds that provide loans to companies (e.g., allowing investments in qualifying venture capital funds) so banking entities can allocate resources to a more diverse array of long-term investments in a broader range of geographic areas, industries, and sectors than they may be able to access directly; (2) protect safety and soundness and financial stability by not allowing banks to engage in any activity that is not currently permissible if conducted on their balance sheets, and limiting banks’ exposures to potential risks by including protections that restrict the ability to conduct certain transactions with covered funds; and (3) provide greater clarity and certainty about what activities are permitted, including by clarifying the existing foreign public fund exclusion, which is intended to provide consistent treatment between U.S. registered investment companies and their foreign equivalents.

Finalized amendments to their swap margin rule to facilitate the implementation of prudent risk management strategies at banks and other entities with significant swap activities. In particular, under the final rule, entities that are part of the same banking organization generally will no longer be required to hold a specific amount of initial margin for uncleared swaps with each other, known as “inter-affiliate swaps.” Inter-affiliate swaps typically are used for internal risk management purposes by transferring risk to a centralized risk management function within the firm. The agencies simultaneously issued a separate interim final rule extending the initial margin compliance date: (1) to September 1, 2021 for swap entities and counterparties with average annual notional swap portfolios of $50 billion to $750 billion; and (2) to September 1, 2022 for counterparties with average annual notional swap portfolios of $8 billion to $50 billion.

Interim final rule regarding the PPP in response to the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act), which amended the Coronavirus Aid, Relief, and Economic Security (CARES) Act and was signed into law on June 5, 2020. This new rule implements Flexibility Act changes to a pair of PPP regulations that the SBA previously published on June 1, 2020 related to loan forgiveness and loan review procedures (respectively).This interim final rule is retroactively effective March 27, 2020 – the date the CARES Act was enacted – except for the provision relating to the maturity date of PPP loans which is effective June 5, 2020 and the provision relating to the cap on the amount of loan forgiveness for owner-employees and self-employed individuals which is effective June 24, 2020.

Announced approval of FINRA’s proposal to update its suitability and noncash compensation rules in order to provide clarity on which standard applies and to address inconsistencies with Regulation Best Interest. Specifically, FINRA’s rulemaking amends its suitability rule (Rule 2111) to: (1) state that it will not apply to recommendations subject to Regulation Best Interest; and (2) remove the element of control from the quantitative suitability obligation. FINRA has also confirmed its capital acquisition broker (CAB) suitability rule (CAB Rule 211) to these amendments to Rule 2111.

Package of regulatory materials on its replacement of the Obama-era fiduciary rule that has been renamed “Improving Investment Advice for Workers & Retirees.” The new regulatory package is composed of two parts, a new proposed class exemption and a technical rule implementing the vacatur of the DOL’s 2016 fiduciary rule. In general, the new proposed class exemption would require fiduciary investment advice to be provided in accordance with “Impartial Conduct Standards” imposed over the five-part test that existed before the Obama-era fiduciary rule. In broad terms the Impartial Conduct Standards consists of the following components: (1) a best interest standard (providing that investment advice fiduciaries relying on the class exemption would have to provide advice in the best interest of retirement investors); (2) a reasonable compensation standard; and (3) a requirement to make no materially misleading statements about recommended investment transactions and other relevant matters. The new proposed class exemption also would include other protective conditions requiring disclosure to retirement investors, conflict mitigation, and a retrospective compliance review. Investment advice fiduciaries could lose access to the class exemption for a period of ten years for certain criminal convictions in connection with the provision of investment advice to retirement investors or for egregious conduct with respect to compliance with the class exemption.

Proposed revisions to its existing information collection request (ICR) entitled, “Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks (FR 2225).” The FR 2225 is required for foreign banking organizations (FBOs) that wish to and are eligible to establish a non-zero net debit cap for their U.S. branches and agencies under the Federal Reserve Policy on Payment System Risk (PSR policy). The FR 2225 reporting form collects information needed to identify the respondent and its fiscal year-end and specifically collects four items to determine its year-end capital and assets for purposes of daylight overdraft monitoring. The four items, converted into U.S. dollars collected for the capital and assets determination include: (1) worldwide capital for the reporting FBO (“item 1”); (2) an adjustment to avoid double counting of capital used by any direct or indirect subsidiary of the FBO that also has access to Fedwire and has its own net debit cap (“item 2”); (3) the FBO’s total daylight overdraft capital base for the U.S. branch and agency family (“item 3”), which is used to calculate the net debit cap; and (4) the reporting FBO’s total worldwide assets (“item 4)”. The Reserve Banks use items 1 and 2 as supplemental information to clarify the data reported in item 3. Federal Reserve staff use the assets data reported in item 4 for analytical purposes.

Interim final rule to amend Regulation X to make clear that servicers do not violate Regulation X by offering certain COVID-19-related loss mitigation options based on an evaluation of limited application information collected from the borrower. Normally, with certain exceptions, Regulation X would require servicers to collect a complete loss mitigation application before making an offer.

Order to update the filing threshold for broker-dealers’ Form 17-H filings made pursuant to Exchange Act Rules 17h-1T and Rule 17h-2T. The threshold, which the SEC observes has not been updated in nearly 30 years, will exempt certain smaller broker-dealers from the reporting requirements of the rules.

Seeking comments regarding the FR Y-9 series of reports (“Financial Statements for Holding Companies”). The FR Y-9 series is the primary source of financial data on holding companies) that examiners rely on in the intervals between onsite inspections. The Federal Reserve requires holding companies to provide standardized financial statements to fulfill the agency’s statutory obligation to supervise these organizations. Financial data from these reporting forms are used to detect emerging financial problems, to review performance and conduct pre-inspection analysis, to monitor and evaluate capital adequacy, to evaluate holding company mergers and acquisitions, and to analyze a holding company’s overall financial condition to ensure the safety and soundness of its operations

Seeking comments regarding the FR Y-14A/Q/M series of reports (“Capital Assessments and Stress Testing Reports”). The annual FR Y-14A collects quantitative projections of balance sheet, income, losses, and capital across a range of macroeconomic scenarios and qualitative information on methodologies used to develop internal projections of capital across scenarios. The quarterly FR Y-14Q collects granular data on various asset classes, including loans, securities, trading assets, and PPNR for the reporting period. The monthly FR Y-14M is comprised of three retail portfolio- and loan-level schedules, and one detailed address-matching schedule to supplement two of the portfolio and loan-level schedules.

Proposed rules regarding the “qualified mortgage” (QM) definition under Regulation Z and the Truth in Lending Act. In the first of its proposed rules, the CFPB seeks to make certain amendments to the General QM loan definition in Regulation Z. Among other things, the CFPB proposes to remove the General QM loan definition is 43 percent DTI limit and replace it with a price-based threshold. In its second proposed rule, the CFPB seeks to extend the Temporary GSE QM loan definition to expire upon the effective date of final amendments to the General QM loan definition in Regulation Z (or when the GSEs cease to operate under the conservatorship of the FHFA, if that happens earlier). Overall, the CFPB states that its objective with these two proposals is to facilitate a smooth and orderly transition away from the Temporary GSE QM loan definition and to ensure access to responsible, affordable mortgage credit upon its expiration.

Extended information collection request (ICR) related to the Paycheck Protection Program (PPP) which was originally approved and implemented on an emergency basis.

Announced that the agency has ratified certain provisions of its November 17, 2017 final rule regarding payday, vehicle title, and certain high-cost installment loans. This 2017 rule contained two primary components: (1) mandatory underwriting provisions requiring lenders to assess borrowers’ ability to repay before making covered loans; and (2) payments provisions governing lenders’ withdrawing payments for covered loans from consumers’ bank accounts. Although the CFPB notes that it is separately issuing a rule that rescinds the mandatory underwriting provisions of the 2017 rule, the agency is explicitly ratifying the payments provisions in light of the U.S. Supreme Court’s June 29, 2020 decision in Seila Law LLC v. CFPB that the removal procedures for the CFPB Director violate the separation of powers under the U.S. Constitution.

Proposed rule to amend its regulations at 17 CFR 38 to address the potential risk of a designated contract market’s (DCM) trading platform experiencing a disruption or system anomaly due to electronic trading. As a result, the proposed rule outlines three “risk principles” for DCMs in this space concerning: (1) the implementation of exchange rules applicable to market participants to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading; (2) the implementation of exchange-based pre-trade risk controls for all electronic orders; and (3) the prompt notification of the CFTC by DCMs of any significant disruptions to their electronic trading platforms. The proposed rule also describes certain “acceptable practices” which provide that a DCM can comply with these principles by adopting and implementing rules and risk controls that are “reasonably designed” to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading. The CFTC interprets “reasonably designed” to mean that a DCM’s rules and risk controls are objectively reasonable. DCM rules and pre-trade risk controls that are not “reasonably designed” would not satisfy the acceptable practices and therefore may be subject to CFTC action. The CFTC adds that it will monitor DCMs to ensure compliance with the risk principles.

Request for information (RFI) to gather input concerning: (1) the effectiveness of current state- and employer-provided paid leave programs; and (2) how access or lack of access to paid leave programs impacts America’s workers and their families. For the purposes of this RFI, “paid leave” means absence from work during which an employee receives compensation to care for a spouse, parent, child, or his or her own health. Overall, the WB states that it is seeking an assessment of paid leave in the U.S. from the general public and from a diverse array of stakeholders, including state and local officials, employers, unions, workers, individuals who are not currently employed, faith-based and other community organizations, universities and other institutions of higher education, foundations, chambers of commerce, and other interested parties with experience or expertise in paid leave. The agency states that that the information gathered through this RFI will help to identify promising practices related to eligibility requirements, related costs, and administrative models of existing paid leave programs.

Proposed rule that would determine when national banks or federal savings associations (collectively, banks) make a loan and are the “true lender” in the context of a partnership between a bank and a third party. The OCC notes that banks’ lending relationships with third parties can facilitate access to affordable credit.

Proposed rule regarding the mutual fund and exchange-traded fund disclosure framework. Overall, the SEC states that the proposal would: (1) require streamlined reports to shareholders that would include, among other things, fund expenses, performance, illustrations of holdings, and material fund changes; (2) significantly revise the content of these items to better align disclosures with developments in the markets and investor expectations; (3) encourage funds to use graphic or text features such as tables, bullet lists, and question-and-answer formats to promote effective communication; and (4) promote a layered and comprehensive disclosure framework by continuing to make available online certain information that is currently required in shareholder reports but may be less relevant to retail shareholders generally.

Published President Trump’s August 8, 2020 memorandum for the Secretary of the Treasury, which directs the Secretary to use his authority to defer certain payroll tax obligations with respect to the American workers most in need during the COVID-19 pandemic. Specifically, the Secretary is directed to defer the withholding, deposit, and payment of the 6.2 percent Social Security tax on certain wages or compensation paid between September 1, 2020, and December 31, 2020. The memorandum clarifies that the withholding deferral is to apply only with respect to employees with wages or compensation payable during a bi-weekly pay period that generally is less than $4,000, calculated on a pre-tax basis (or the equivalent amount with respect to other pay periods). Additionally, the Secretary is directed to issue guidance to implement this memorandum and “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”

Final rule amending Regulation Z, which implements the Truth in Lending Act (TILA), to update the dollar amounts of various thresholds that are adjusted annually based on the annual percentage change in the Consumer Price Index as published by the Bureau of Labor Statistics.

Final rule revising and codifying its “Statement of Policy” on Section 19 of the Federal Deposit Insurance Act. Section 19 prohibits, without the FDIC’s prior written consent, any person from participating in banking who has been convicted of a crime of dishonesty or breach of trust or money laundering, or who has entered a pretrial diversion or similar program in connection with the prosecution of such an offense. The FDIC’s related Statement of Policy on Section 19 was issued in 1998 and sets forth a set of criteria for providing relief for individuals with convictions for certain low-risk crimes that constituted de minimis crimes, forgoing the need for an application for a waiver of Section 19.

Seeking comments on a proposal to extend, with revisions, its existing ICR entitled, “Reporting Requirements Associated with Regulation XX (FR XX).” Regulation XX implements section 14 of the Bank Holding Company Act of 1956 (BHC Act), which establishes a financial sector concentration limit that generally prohibits a financial company from merging or consolidating with, or otherwise acquiring, another company if the resulting company’s liabilities upon consummation would exceed 10 percent of the aggregate liabilities of all financial companies (a covered acquisition). Under section 14 of the BHC Act and Regulation XX, a “financial company” means: (1) an insured depository institution; (2) a bank holding company; (3) a savings and loan holding company; (4) any other company that controls an insured depository institution; (5) a nonbank financial company designated by the Financial Stability Oversight Council (FSOC) for Federal Reserve supervision; or (6) a foreign bank or company that is treated as a bank holding company for purposes of the BHC Act. The FR XX-1 collects information from certain financial companies that do not otherwise report consolidated financial information to the Federal Reserve or another federal banking agency.

Interim final rule to inform Paycheck Protection Program (PPP) borrowers and lenders of the process for a PPP borrower to appeal certain SBA loan review decisions to the Office of Hearings and Appeals (OHA). Under this rule, a final loan review decision is an official written decision by the SBA, following the SBA’s completion of PPP loan review, that finds a borrower: (1) was ineligible for a PPP loan; (2) was ineligible for the PPP loan amount received or used the PPP loan proceeds for unauthorized uses; and/or (3) is ineligible for PPP loan forgiveness. Only final SBA loan review decisions can be appealed to OHA, meaning that a PPP borrower cannot file an OHA appeal of any decision made by a lender concerning a PPP loan.