On March 31, the Board of Governors of the Federal Reserve System (Federal Reserve Board) published six sets of responses to Frequently Asked Questions (FAQs) consisting of existing legal interpretations regarding Regulations H, K, L, O, W and Y. Additional FAQs will be released periodically and posted to the agency’s website as part of an ongoing effort to increase transparency and enhance accessibility to Federal Reserve Board legal interpretations. Release. FAQs.
On March 5, the Federal Reserve Board clarified guidance as it relates to definitions for minority depository institutions (MDIs) by expanding the MDI definition to include women-owned financial institutions, and highlighting resources available to MDIs through its Partnership for Progress (PFP) program. Release.
On February 18, the Board of the Federal Reserve announced a final rule amending Regulation EE, which is intended to reduce risk and increase efficiency in the financial system. The final rule applies netting protections to a broader range of financial institutions. The expanded definition of financial institutions now includes swap dealers and security-based swap dealers, nonbank systemically important financial institutions, foreign banks and qualifying central counterparties, among other new additions. The final rule also made minor clarifications to the existing activities-based test in Regulation EE, which clarify the application of the test following a consolidation of legal entities. Release.
On February 9, The Federal Reserve Board announced the second extension to a temporary modification of the Board’s rules that allows certain bank directors and shareholders to apply to their banks for Small Business Administration Paycheck Protection Program (PPP) loans for their small businesses. The modification is intended to improve the effectiveness of the PPP. Prior to this modification, limits on the types and quantity of loans that bank directors, shareholders, officers and businesses owned by these persons can receive from their affiliated banks prevented some small business owners from accessing PPP loans. The rule extension is effective immediately and applies to PPP loans made through March 31, 2021. Release.
On December 29, the Federal Reserve announced it would extend the termination date of Main Street Lending program facilities to January 8, 2021. The extension will allow additional time for lenders to process and fund loans that were submitted to the Main Street lender portal on or before December 14, 2020. Release.
On December 16, the Federal Reserve announced an extension through September 30, 2021, of its temporary U.S. dollar liquidity swap lines and the temporary repurchase agreement facility for foreign and international monetary authorities (FIMA repo facility). In March 2020, these facilities were temporarily established with the goal to ease strains in global dollar funding markets created by the COVID-19 pandemic and to support the supply of credit to households and businesses. These facilities were previously extended as of July 29, 2020. Release.
On November 18, the Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board (FRB), and the Office of the Comptroller of the Currency (OCC) (collectively, the “Agencies”) announced that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2021 will remain at $27,200, as it was in 2020. Release.
On October 30, the Federal Reserve Board (FRB) announced adjustments to the Main Street Lending Program in an effort to better support smaller businesses. The changes include reducing the minimum required loan size to $100,000 from $250,000 and adjusting the fees to encourage eligible lenders to provide these smaller loans. Release.
On October 22, the Federal Reserve Bank of New York released a revised Master Loan and Security Agreement (MLSA) related to the use of the Term Asset-Backed Securities Loan Facility (TALF). The changes to the MLSA will be effective as of November 5. Release.
On June 3, the Federal Reserve Board announced an 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 to be eligible to directly use the facility. Release.
