Like our clients, Holland & Knight's Financial Services Industry Group is committed to actively contributing to our nation's response to the coronavirus (COVID-19) pandemic and related economic fallout and recovery efforts. For our part, Holland & Knight's 300-plus lawyers and professionals who comprise our Financial Services Industry Group want to ensure that bank and non-bank financial institutions, financial intermediaries and other financial services industry participants and stakeholders have access to timely, accurate and succinct updates on federal and state legislative, regulatory and administrative responses to the COVID-19 pandemic that are most relevant to our financial services clients.

To that end, we are pleased to share with you the latest edition of The RESPONSE.

OCC Clarifies Guidance Related to Providing Loans Under Paycheck Protection Program

The Office of the Comptroller of the Currency (OCC) has issued Bulletin 2020-45, which clarifies and rescinds previous guidance related to providing loans under the Paycheck Protection Program (PPP). Per the bulletin, national banks providing loans under the PPP should employ prudent practices consistent with safety and soundness and other legal requirements by, among other items, collecting and tracking information provided during the application process, documenting implementation decisions on eligibility criteria, establishing processes for application consideration and loan decisions, and tracking PPP loan volumes. The latest bulletin rescinds Bulletin 2020-44.

SBA and Treasury Department to Review PPP Loans

U.S. Treasury Secretary Steven Mnuchin and Administrator Jovita Carranza of the U.S. Small Business Administration (SBA) have announced that the SBA will review PPP loans in excess of $2 million (and other loans as appropriate). Guidance on the loan review process will be issued at a later date, but the loan review process will follow submission of a borrower's loan forgiveness application.

SBA Updates PPP Guidance to Lenders and Borrowers

The SBA has updated its FAQs for borrowers and lenders. Updates include clarification on PPP eligibility for agricultural producers and cooperatives, how to count employees under the 500-employee threshold and how to determine whether a principal place of business is in the United States.

Federal Reserve Expands Municipal Liquidity Facility

The Federal Reserve has expanded the scope and duration of the Municipal Liquidity Facility (MLF). With this expansion, the MLF will purchase up to $500 billion in short-term notes from U.S. counties with a population of at least 500,000 residents and U.S. cities with a population of at least 250,000 residents. With more entities now able to obtain funds through the facility, the intent is that more states and municipalities will be able to cope with the cash flow stresses caused by the coronavirus pandemic.

FDIC, Federal Reserve Extend Comment Period on Large Foreign Bank Living Wills

In light of the challenges presented by COVID-19, the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve have extended the comment period on the proposed guidance related to resolution plans (commonly called "living wills") that must be submitted by large foreign banks. The agencies will now accept comments through June 4, 2020. The guidance is intended to provide more detail on regulatory expectations for the resolution plans of certain foreign banks.

Freddie Mac Reminds Borrowers of Repayment Options After Forbearance

Freddie Mac CEO David Brickman has reinforced that homeowners with mortgages owned by Freddie Mac that seek forbearance will not be required to repay missed payments in a lump sum. The press release further explains that servicers will reach out to borrowers about 30 days before the end of the forbearance period to determine which of the available repayment plans are best.

22 State Attorneys General Announce Intention to Enforce Credit Reporting Protections

The Attorneys General of 22 states sent a letter to the consumer reporting agencies signaling their intention to fully enforce the credit reporting protections provided to consumers under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and Fair Credit Reporting Act (FCRA). The letter was issued after, as asserted by the Attorneys General in the letter, the federal government failed to commit to enforcing such protections.