Federal & State Financial Regulators Issue Guidance/Info on COVID-19

Interagency Statement on Pandemic Planning

PURPOSE: The Federal Financial Institutions Examination Council (FFIEC) on behalf of its member agencies1 are issuing guidance to remind financial institutions that business continuity plans should address the threat of a pandemic outbreak and its potential impact on the delivery of critical financial services. Click here to read the FFIEC Guidance.

Joint Press Release: Board of Governors, Federal Reserve System; CFPB; FDIC; OCC; NCUA; CSBS: Agencies Encourage Financial Institutions to Meet Financial Needs of Customers and Members Affected by Coronavirus

Federal financial institution regulators and state regulators today encouraged financial institutions to meet the financial needs of customers and members affected by the coronavirus. The agencies recognize the potential impact of the coronavirus on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. Click here to read the Joint Press Release.

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State Legislature Changes Due to COVID-19

​UPDATE 03/20/2020 - Gov. Tom Wolf’s order closing businesses that are not considered life-sustaining was updated Saturday, March 20.  A list of both life-sustaining and non-life-sustaining businesses is here. Business guidance has been updated after conversations with PACB and other financial- and businesses-stakeholders, and has been aligned with the Cybersecurity and Infrastructure Security Agency advisory released yesterday.

In response to COVID-19. Governor Wolf closed the Pennsylvania State Capitol to anyone but employees effective last Friday, March 13th.  The state legislature was previously scheduled to return to session on March 16th.

The House met for Session on Monday, March 16th to pass a series of internal rules changes that will allow the 203-member chamber to continue to conduct its business remotely during the course of the outbreak.

The Senate cancelled their Monday and Tuesday Session, but met briefly on Wednesday to pass a resolution regarding temporary emergency rules, to allow the Senate to pass legislation remotely.

The House and Senate will operate under a “12-hour call time,” meaning members should be prepared to vote remotely if called upon.

These rules will be in effect until Governor Wolf ends the coronavirus disaster declaration.

​House and Senate Republican and Democrat Legislators are committed to helping Governor Wolf’s efforts to combat the coronavirus.

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PA Department of Banking & Securities COVID-19 Resources

Click here and here to Read All PA DOBS COVID-19 Resources

UPDATE 04/08/2020 - The Pennsylvania Department of Banking & Securities has issued Limited Guidance for Appraisers, Notaries, Title Companies, and Home Inspectors for Transactions Begun Prior to March 6, 2020.  The following is now posted on their website.

On March 6th, 2020 in response to the spread of the novel coronavirus COVID-19, Governor Tom Wolf executed an Emergency Disaster Declaration for Pennsylvania. Subsequently, on March 19th, 2020, Governor Wolf ordered the closure of non-life-sustaining businesses.

Since that date, the Department worked in consultation with the Governor’s Office and the Department of Banking and Securities to develop guidance for appraisers, notaries, title companies and home inspectors. In response to concerns regarding residential real estate transactions, specifically those transactions initiated prior to the Emergency Disaster Declaration, the following limited guidance is being issued:

1. In-person activities as listed below are permitted for only those residential real estate transactions which, with respect to existing homes, were under contract (signed) prior to the date of the March 6th, 2020, or, with respect to new construction, which were under a previously executed contract that provides for closing and delivery to the customer on or after March 6th, 2020 :
   • Inspections
   • Appraisals;
   • Final walk-throughs;
   • In-person Title Insurance activities.
2. Permitted inspections, appraisals, final walk-throughs, and title insurance activities shall be arranged by appointment and limited to no more than two people on site at any one time. Exercising of social distancing during these activities is required, and wearing further protective gear (gloves, shoe covers, masks) is strongly encouraged. No construction activities may occur at such site other than limited activities necessary to stabilize the site, temporarily prevent weather damage, or make emergency repairs only. Emergency repairs, limited to performing those tasks necessary to provide repair services to customers, may continue. Further, residential construction projects that have been issued a final occupancy permit may continue such work as may be necessary to complete delivery to the purchaser. For all other residential construction projects limited activities may continue to the extent necessary to stabilize the site, temporarily prevent weather damage, or make emergency repairs only.
3. Any real estate business which is executed remotely is permissible, including virtual or telework operation for desktop appraisals.
4. For residential real estate contracts entered into after March 6th, 2020, in-person inspections, appraisals, final walk-throughs, and title insurance activities are prohibited until the Emergency Disaster Declaration is lifted for Pennsylvania. This does not apply to appraisals that do not require entrance into a physical location.

The COVID-19 global pandemic has created an unprecedented situation and we understand the concerns of businesses and individuals impacted by this virus. However, due to significant health concerns for the residents of this commonwealth, only in-person residential real estate activities that meet the provisions of this guidance are permissible.

UPDATE 03/20/2020 - The Pennsylvania Department of Banking and Securities has provided a process by which individual banks may seek waivers to exclude from the governor’s prohibition certain banking operations, such as the operation of trust departments, legal services, real estate and title services, etc.

Should your institution seek a waiver to continue certain financial operations, or are seeking information about the process, you can submit your request via [email protected]  

The Department of Community and Economic Development (DCED) will email back with information about the process.

Please copy or notify the Department of Banking and Securities on your waiver application so they can track your application and possibly intervene in support. These waiver requests will be given high priority.

General information for businesses seeking information about whether they are covered under yesterday's order, please email: [email protected] 

The Department of Banking and Securities has provided resources about COVID-19 https://www.dobs.pa.gov/Pages/default.aspx 

From the DOBS website: "The Department of Banking and Securities has received a number of questions about whether banks and other financial institutions are subject to Governor Wolf's order that non-life-sustaining businesses in Pennsylvania close their physical locations in order to mitigate the spread of the COVID-19. 

Please be aware that banks, credit unions, and non-depository licensees are NOT required to shutdown their physical locations. Credit intermediation and related activities also do not require physical closure. Banks, credit unions, and non-depository licensees are encouraged to remain open and operational and to follow best practices for social distancing."

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Federal Regulator COVID-19 Resources

Federal Regulator COVID-19 ResponseFederal Banking Agencies Provide Banks Additional Flexibility to Support Households and Businesses

The federal bank regulatory agencies today announced two actions to support the U.S. economy and allow banks to continue lending to households and businesses. They are:

• A statement encouraging banks to use their resources to support households and businesses; and
• A technical change to phase in, as intended, the automatic distribution restrictions gradually if a firm's capital levels decline.

Read the press release here.

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FDIC

UPDATE 03/20/2020 - FDIC has issued FAQ’s for Financial Institutions related to COVID-19.  If includes issues like TDR’s, deferments, delinquencies, & more, etc.

Please see the following link: https://www.fdic.gov/coronavirus/faq-fi.pdf

Here is the link to FDIC’s notice: https://www.fdic.gov/news/news/financial/2020/fil20018.html

Read all Responses to COVID-19 from FDIC here

FDIC Issued a Financial Institution Letter on Working with Customers Affected by the COVID-19

Highlights:

• The FDIC encourages financial institutions to work with customers and communities affected by COVID-19 in a prudent manner.
• The FDIC understands that this unique and evolving situation could pose significant temporary business disruptions and challenges.
• The FDIC encourages financial institutions to work with all borrowers, especially borrowers from industry sectors particularly vulnerable to the volatility in the current economic environment and small businesses and independent contractors that are reliant on affected industries.
• A financial institution's prudent efforts to modify the terms on existing loans for affected customers will not be subject to examiner criticism.
• The FDIC will work with affected financial institutions to reduce burden when scheduling examinations, including making greater use of off-site reviews, consistent with applicable legal and regulatory requirements.
• The FDIC's staff stands ready to work with financial institutions that may experience challenges fulfilling their regulatory reporting responsibilities and will act expeditiously if institutions need to temporarily close facilities.
• The FDIC has launched a COVID-19 webpage on its public website to provide useful information to bankers, consumers, and others. Financial institutions that have questions about guidance in the statement are encouraged to contact their FDIC Regional Office

Read the FDIC FIL here.

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OCC

Read all Responses on COVID-19 from OCC here

UPDATE 04/07/2020 - Bulletin | OCC 2020-35   April 7, 2020

Troubled Debt Restructurings : Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With Customers Affected by COVID-19 (Revised)

Summary
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, the agencies), in consultation with the state financial regulators, today issued a revised interagency statement to provide information to financial institutions that are working with borrowers affected by the coronavirus (also known as COVID-19).

Rescission
This bulletin rescinds OCC Bulletin 2020-21, “Troubled Debt Restructurings: Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With Customers Affected by COVID-19,” issued on March 23, 2020. OCC Bulletin 2020-21 transmitted the previous version of the interagency statement.

Highlights
The revised interagency statement addresses the following:

• Banks may elect to account and report for loans modified under section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020. Refer to the Federal Financial Institutions Examination Council’s Supplemental Instructions to the Consolidated Reports of Condition and Income for more information on related reporting requirements.
• When working with borrowers, banks should adhere to consumer protection requirements, including fair lending laws, to provide the opportunity for all borrowers and communities to benefit from these arrangements.

Background
The CARES Act creates a forbearance program for federally backed mortgage loans; protects borrowers from negative credit reporting due to loan accommodations related to the COVID-19 national emergency declared by the President on March 13, 2020; and provides financial institutions the option to temporarily suspend certain requirements under U.S. generally accepted accounting principles related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19.

The agencies originally issued a statement on March 22, 2020, focusing on loan modifications and reporting, to encourage financial institutions to work prudently with borrowers and to describe the agencies’ interpretation of how current accounting rules under U.S. generally accepted accounting principles apply to certain COVID-19-related modifications. This revised interagency statement clarifies the interaction between the March 22, 2020, interagency statement and section 4013 of the CARES Act, “Temporary Relief From Troubled Debt Restructurings,” as well as the agencies’ views on consumer protection and fair lending considerations.

Further Information
The OCC will continue to communicate with the industry as this situation unfolds, including through additional statements, webinars, frequently asked questions, or other means, as appropriate.

Please contact Lou Ann Francis, Director for Commercial Credit Risk Policy, and James Calhoun, Technical Expert for Commercial Credit Risk Policy, at (202) 649-6670; Sarah Nawrocki, Professional Accounting Fellow, Office of the Chief Accountant, at (202) 649-6280; or Paul R. Reymann, Director for Consumer Compliance Policy, at (202) 649-7880.

Related Links

• “Agencies Issue Revised Interagency Statement on Loan Modifications by Financial Institutions Working With Customers Affected by the Coronavirus”
• “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With Customers Affected by the Coronavirus (Revised)” (PDF)
• Federal Financial Institutions Examination Council Call Report Instructions
• Quick Reference Guide: “TDR Designation and COVID-19 Loan Modifications: Section 4013 of the CARES Act and OCC Bulletin 2020-35” (PDF)

UPDATE 03/22/2020 - The Office of the Comptroller of the Currency (OCC) today announced an interim final rule to revise its short-term investment fund (STIF) rule for national banks acting in a fiduciary capacity.  The rule allows the OCC to authorize banks to temporarily extend maturity limits of these funds. The financial markets are in a period of significant stress negatively affecting the ability of banks to operate in compliance with maturity limits identified in the rule. The rule is effective immediately. The agency will accept comments for 45 days following publication in the Federal Register.

OCC Revises Short-Term Investment Fund Rule

https://www.occ.gov/news-issuances/federal-register/2020/nr-occ-2020-38-federal-register.pdf

Simultaneously to announcing the interim final rule, the OCC also announced an order extending the maturity limits for STIFs affected by the market effects of COVID-19. The order provides that a bank will be deemed in compliance with the rule if:

• The STIF maintains a dollar-weighted average portfolio maturity of 120 days or less, as determined in the same manner as is required by the Securities and Exchange Commission SEC) pursuant to Rule 2a-7 for money market mutual funds (17 CFR 270.2a-7);
• The STIF maintains a dollar-weighted average portfolio life maturity of 180 days or less, as determined in the same manner as is required by the SEC pursuant to Rule 2a-7 for money market mutual funds (17 CFR 270.2a-7).;
• The bank is acting in the best interests of the STIF under applicable law in connection with using these temporary limits; and
• The bank makes any necessary amendments to the written plan for the STIF to reflect these temporary changes.

The OCC also determined that the relief provided by this administrative order terminates on July 20, 2020, unless the OCC revises this order to provide otherwise before that date.

The best compendium of issuances around COVID-19 related information is https://occ.gov/covid-19.

Pandemic Planning: Working With Customers Affected by Coronavirus and Regulatory Assistance

The Office of the Comptroller of the Currency (OCC) recognizes the potential for the Coronavirus Disease 2019 (also referred to as COVID-19) to adversely affect the customers and operations of banks.1  The OCC encourages banks to take steps to meet the financial services needs of customers adversely affected by COVID-19-related issues. The OCC will provide appropriate regulatory assistance, as warranted, to banks affected by COVID-19-related issues.

Read more from OCC here.

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Federal Reserve

Read all responses to COVID-19 from the Federal Reserve here.

UPDATE 03/22/2020 - The federal financial institution regulatory agencies and the state banking regulators issued an interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications.

The agencies encourage financial institutions to work with borrowers, will not criticize institutions for doing so in a safe and sound manner, and will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings (TDRs). The joint statement also provides supervisory views on past-due and nonaccrual regulatory reporting of loan modification programs.

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200322a.htm

UPDATE 03/21/2020 - US Department of Homeland Security - Cybersecurity and Infrastructure Security Agency (CISA) Federal Guidance on Critical Infrastructure Workforce

Read the memorandum and Guidance here

https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce

The federal bank regulatory agencies released a statement encouraging banks to use the Federal Reserve's "discount window" so that they can continue supporting households and businesses.

The discount window provides short-term loans to banks and plays an important role in supporting the liquidity and stability of the banking system. By providing ready access to funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers. Thus, the discount window supports the smooth flow of credit to households and businesses.

Read more the Federal Reserve here.

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US Department of the Treasury

UPDATE 04/02/2020 - US Treasury Guidance on SBA Paycheck Protection Program (PPP): https://home.treasury.gov/cares

ASSISTANCE FOR SMALL BUSINESSES

The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.

• For a top-line overview of the program CLICK HERE
• If you’re a lender, more information can be found HERE
• If you’re a borrower, more information can be found HERE
• The application for borrowers can be found HERE

Secretary Steve Mnuchin Memorandum on Financial Services Sector Essential Critical Infrastructure Workers: CLICK HERE.

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US Small Business Administration

UPDATE 04/26/2020 - Due to the unprecedented demand for Paycheck Protection Program loans by the nation’s small businesses and to ensure equitable access and system integrity, SBA and Treasury are taking prudent and reasonable steps to protect SBA’s loan systems for the next phase of PPP loan processing.

SBA and Treasury are implementing the following measures:

• Pacing the number of loans processed in the E-Tran system for participating lenders when processing resumes on Monday, April 27, 2020 at 10:30 am EDT;
• Instituting a maximum dollar amount at 10% of PPP funding authority that any lending institution will be able to originate, exclusive of the additional $60 billion preserved for lenders with assets under $50 billion (i.e. $60 billion cap);
• Implementing operational standards to ensure that lenders access PPP funds based on their asset size;
• Ensuring the Paycheck Protection Program continues to operate on a first-come, first-serve basis so that every small business has access to PPP loans to sustain their business and retain their employees; and
• Issuing the following guidance (memo attached) for lenders who have received a significant amount of loan applications.

SBA and Treasury value all lenders and their small business customers and will continue to provide updates to the PPP lending community as loan processing resumes this week.

UPDATE 04/24/2020 - Joint Statement by SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin on the Resumption of the Paycheck Protection Program

WASHINGTON – Administrator of the U.S. Small Business Administration Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin issued the following statement today on the resumption of the Payroll Protection Program (PPP):

“We are pleased that President Trump has signed into law the Paycheck Protection Program and Health Care Enhancement Act, which provides critical additional funding for American workers and small businesses affected by the coronavirus pandemic.  We want to thank Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy for working with us on a bipartisan basis to ensure that the Paycheck Protection Program is funded so that small businesses can keep hardworking Americans on the payroll.

“The Small Business Administration will resume accepting PPP loan applications on Monday, April 27 at 10:30AM EDT from approved lenders on behalf of any eligible borrower.  This will ensure that SBA has properly coded the system to account for changes made by the legislation.

“The PPP has supported more than 1.66 million small businesses and protected over 30 million jobs for hardworking Americans.  With the additional funds appropriated by Congress, tens of millions of additional workers will benefit from this critical relief.

“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously.  All eligible borrowers who need these funds should work with an approved lender to apply.  Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan.

“The Trump Administration is fully committed to ensuring that America’s workers and small businesses continue to get the resources they need to get through this challenging time.”

For more information on the Paycheck Protection Program, visit: sba.gov/paycheckprotection.

New document: Paycheck Protection Program (PPP) Report - Approvals through 4/13/2020

New document: FAQ’s on PPP - CLICK HERE

Important Resources:
Affiliation Rules: Click Here 
Interim Final Rule (IFR) on affiliation: Click Here  
FAQ on Faith-based Orgs and PPP: Click Here
Interim Final Rule: Click Here  
Borrower Application: Click Here
PPP Loan Guaranty Form: Click Here

New Lender Application For Federally insured depository institutions, federally insured credit unions, and Farm Credit System institutions (other than the Federal Agricultural Mortgage Corporation)

(Submit to [email protected])  https://www.sba.gov/sites/default/files/2020-04/PPP--Agreement-for-New-Lenders-Banks-Credit-Unions-FCS-w-seal-fillable.pdf

More Info:
E-Tran Pro Tip:  When a lender enters a loan intro E-tran, make sure they choose “PPP” from the first drop down menu. Do NOT choose “7(a)”. If they choose 7(a), they will face restrictions that aren’t relevant to PPP.

Find a lender tool: Click Here 

Lender Assistance Hotline: (833) 572-0502

Information for lenders can always be found at www.sba.gov/paycheckprotection or www.treasury.gov/cares

How to request change to info on sba.gov website: www.sba.gov/support (file a ticket)

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