March 30, 2020

The RESPONSE: Federal and State Actions Affecting the Financial Services Industry - Edition 3

Holland & Knight Alert
Holland & Knight's Financial Services Industry Group

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.

President Trump Signs CARES Act

President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on March 27. Holland & Knight has prepared a summary of the CARES Act, which is a $2 trillion package that includes significant expansions in small business lending, unemployment insurance, tax relief to individuals and employers, healthcare measures, $500 billion in economic stabilization funds, $274 billion in emergency appropriations, and other measures aimed at combating the COVID-19 healthcare and economic crisis.

Federal Regulators Provide Alternative 5-Year CECL Transition Option

Federal bank regulators are offering those banking organizations that adopt "current expected credit losses" (CECL) during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition, in total).

CFPB Offers Regulatory Reporting Relief

The Consumer Financial Protection Bureau (CFPB) announced late on March 26 that mortgage lenders subject to the Home Mortgage Disclosure Act (HMDA) quarterly reporting requirements will not be required to file their quarterly reports until further notice, although they must continue to collect the required information. In addition, the CFPB stated that it will not require credit card issuers to report certain information related to credit card and prepaid accounts under the Truth in Lending Act (TILA) and Regulations Z and E.

SEC Provides Periodic Reporting and Proxy Statement Delivery Accommodations

The SEC has provided that registrants can take advantage of a 45-day extension for covered filings due on or before July 1, 2020, if they are unable to meet a filing deadline due to circumstances related to COVID-19. The SEC order describes the type of public disclosure required to take advantage of the available filing extension.

SEC Issues Coronavirus Disclosure Guidance

The SEC's Division of Corporation Finance published guidance regarding disclosure and other securities law obligations that companies should consider with respect to COVID-19 and related business and market disruptions.

Mortgage Bankers Association of America Appeals to FINRA and SEC

In a letter dated March 29, the MBA urgently requested that FINRA and the SEC issue guidance to the nation's broker-dealers, making clear that margin calls on mortgage lenders' hedge positions should not be escalated to destabilizing levels. MBA indicated its belief that, absent such guidance and an immediate shift in broker-dealer practices, the U.S. housing market is in danger of large-scale disruption.

Illinois and New York Address Remote Online Notaries; Massachusetts Considering

The governors of Illinois and New York have issued Executive Orders addressing the availability of remote online notarizations (RONs). Legislation related to RONs is pending in Massachusetts. Holland & Knight's RON Team has updated its accounting of related legislative and emergency order statuses throughout the country.

An Updated List of State and Local Nonessential Business and Stay-at-Home Orders

U.S. state and local governments continue to issue new orders regarding closure of nonessential businesses and sheltering at home. Understanding and keeping track of these requirements is important to all businesses. To assist, Holland & Knight has created state-by-state summaries of the major executive orders, mandates and proclamations, as well as links to the official documents. The summaries are updated daily.

For questions, comments or additional information on any of these areas, please reach out to the Holland & Knight professional with whom you work or one of the following contacts in our Financial Services Industry Group.

About Our Financial Services Industry Group:

Participants in the financial services industry require sophisticated legal counsel to navigate a complex, ever-changing environment and respond to opportunities and challenges as they arise. With more than 300 members throughout the firm, Holland & Knight's Financial Services Industry Group has the depth and experience to effectively serve borrowers and lenders in all of their legal matters, including corporate services, international operations, labor and employment, litigation and dispute resolution, public policy and regulation, real estate and white collar defense. The combination of our thorough knowledge and a sincere commitment to provide responsive service is why clients entrust our team to handle their legal needs.

Holland & Knight has established a COVID-19 Response Team to help clients respond to a variety of business and legal issues they may be facing in this crisis. Please visit Holland & Knight's website for the latest COVID-19 news and updates important to your business.

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