PPP

Federal Reserve Board Announces the Second Extension of a Rule to Bolster the Effectiveness of the SBA’s PPP

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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.

Treasury and IRS Issue Guidance Clarifying the Deductibility of Expenses Where a Business Received a PPP Loan

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On November 18, the U.S. Treasury Department and Internal Revenue Service (IRS) released guidance clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. Release.

FHFA to Allow FHLBanks to Accept PPP Loans as Collateral for Member Advances

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On April 23, the Federal Housing Finance Agency issued a supervisory letter addressed to Federal Home Loan Banks’ (“FHLBanks”) presidents advising them that FHLBanks may accept Paycheck Protection Program (“PPP”) loans as collateral for advances made to member banks, subject to certain member-related conditions and loan-related discounts, caps and limits. Release. Supervisory Letter.

Rating Agency Developments

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On March 8, 2016, Fitch updated its global rating criteria for single- and multi-name credit-linked notes. Report.

On March 8, 2016, DBRS published its methodology for rating European covered bonds. Report.

On March 4, 2016, DBRS published its methodology for rating North American CMBS. Report.

On March 3, 2016, Fitch updated its rating criteria for pooled multifamily housing bonds. Report.

On March 3, 2016, Fitch updated its rating criteria for solar power projects. Report.

On March 3, 2016, DBRS published its methodology for rating public-private partnerships. Report.

On March 3, 2016, DBRS published its methodology for rating market-linked securities. Report.

On March 3, 2016, DBRS published its criteria for recovery ratings for non-investment grade corporate issuers. Report.

EIOPA Publishes Consultation Paper on the Development of an EU Single Market for Person Pension Products

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On February 1, the European Insurance and Occupational Pensions Authority (“EIOPA“) published a consultation paper on its advice on the development of an EU Single Market for personal pension products (“PPP“). This consultation is in response to EIOPA’s 2014 preliminary report “Towards an EU-Single Market for personal pensions” and EIOPA’s 2015 consultation paper on the creation of a standardised Pan-European Personal Pension product.

EIOPA is asking:

  1. Would PPPs benefit from harmonisation of provider governance standards?
  2. Would PPPs benefit from harmonisation of product governance rules?
  3. Would PPPs benefit from harmonisation of distribution rules?
  4. Would PPPs benefit from harmonisation in disclosure rules?
  5. Are respondents aware of any differences in prudential regimes that would lead to an unlevel playing field amongst PPP providers?
  6. Are further supervisory powers necessary?
  7. Do respondents agree with EIOPA’s assessment of the policy options’ impacts?

The Consultation Paper is open for responses until April 26 and such responses will be published on EIOPA’s public website.  Consultation Paper.

Rating Agency Developments

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On July 28, DBRS published methodology for conducting operational risk assessments for U.S. asset-backed securities originators.  Report.

On July 28, 2015, DBRS published methodology for conducting operational risk assessments for U.S. asset-backed securities servicers.  Report.

On July 28, DBRS published methodology for rating U.S. property assessed clean energy (PACE) securitizations.  Report.

On July 28, DBRS published methodology for rating Canadian split share companies and trusts.  Report.

On July 28, DBRS published methodology for assigning and reviewing stability ratings for Canadian structured income funds.  Report.

On July 24, Fitch published a new investor FAQ report on EMEA oil and gas.  Release.

On July 23, Fitch updated its global covered bonds master criteria.  Release.

On July 23, Fitch published rating criteria for SHFA mortgage insurance or guarantee fund programs.  Release.

On July 23, Fitch published updated insurance-linked securities (ILS) methodology.  Release.

On July 23, Fitch released final criteria for rating public sector counterparty obligations in PPP Transactions.  Release.