Federal Reserve Board

Agencies Announce Threshold for Smaller Loan Exemption from Appraisal Requirements for Higher-Priced Mortgage Loans

 

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.

Federal Reserve Board Adjusts Main Street Lending Program to Better Support Small Businesses

 

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.

Federal Reserve Board Releases Hypothetical Scenarios for Second Round of Bank Stress Tests

 

On September 17, the Federal Reserve Board released its hypothetical scenarios for a second round of bank stress tests. Earlier this year, the Board’s first round of stress tests found that large banks were well capitalized under a range of hypothetical events. An additional round of stress tests is being performed due to the continued uncertainty from the COVID event. Release.

Federal Reserve Rule Change Allows Bank Directors and Shareholders to Receive PPP Loans

 

On July 15, the Federal Reserve Board (FRB) announced it was extending a recent rule change relating to the Small Business Administration’s Paycheck Protection Program. The rule change will allow certain bank directors and shareholders to apply to their banks for PPP loans for their small businesses. The rule change is effective immediately and will remain effective while the PPP is active. Release.

Federal Reserve Expands Main Street Lending Program to Small and Medium-Sized Businesses

 

On June 8, the Federal Reserve Board (the “Board”) announced that it was expanding its Main Street Lending Program to allow more small and medium-sized business to qualify for the program. Among the changes, the Board lowered the minimum loan size for certain loans from $500,000 to $250,000, increased the maximum loan size for all facilities, increased the term of each loan option from four years to five years and extended the repayment period for all loans by delaying principal payments for two years rather than one year. Release.

Federal Reserve Board Announces Expansion in the Number and Type of Entities Eligible to Directly Use Its Municipal Liquidity Facility

 

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.

Treasury and Federal Reserve Board Announce Main Street Business Lending Program and a Municipal Liquidity Facility

 

On April 9, the Treasury and Federal Reserve Board announced the establishment of the Main Street Business Lending Program and a Municipal Liquidity Facility. The Main Street Business Lending Program will enable up to $600 billion in new financing for businesses with up to 10,000 employees or $2.5 billion in 2019 annual revenues. The Municipal Liquidity Facility will provide up to $500 billion in direct financing to states, counties and cities. States, counties and cities will be able to sell new municipal notes directly to the Municipal Liquidity Facility to obtain the funds they need. Release.

FRB Finalizes Rules that Tailor its Regulations for Banks to More Closely Match Their Risk Profiles

 

On October 10, the Federal Reserve Board (FRB) finalized rules that tailor its regulations for domestic and foreign banks to more closely match their risk profiles. The rules establish a framework that sorts banks with $100 billion or more in total assets into four different categories based on several factors, including asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, nonbank assets, and off-balance sheet exposure. Firms in the lowest risk category will have reduced compliance requirements, and as the risk of a firm increases and it moves into a new risk category, its requirements will increase. Release.

Federal Reserve Announces Plan to Develop a New Round-the-Clock Real-Time Payment and Settlement Service to Support Faster Payments

 

On August 5, the Federal Reserve Board announced that the Federal Reserve Banks will develop a new round-the-clock real-time payment and settlement service, called the FedNow℠ Service, to support faster payments in the United States. The rapid evolution of technology presents a pivotal opportunity for the Federal Reserve and the payment industry to modernize the nation’s payment system and establish a safe and efficient foundation for the future. The Federal Reserve believes faster payment services, which enable the near-instantaneous transfer of funds day and night, weekend and weekdays, have the potential to become widely used and to yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments. Release.

Agencies Complete Resolution Plan Evaluations and Extend Deadline for Certain Firms

 

The Federal Reserve Board and the FDIC completed their evaluation of 82 foreign banks’ 2018 resolution plans, which describe a company’s strategy for rapid and orderly resolution in the event of bankruptcy. In light of proposed resolution plan rule changes, the agencies also extended the deadline to file their next resolutions plans to 2021 for these 82 foreign banks and 15 additional domestic banks. Release. Joint Release.