The RESPONSE: Federal and State Actions Affecting the Financial Services Industry - Edition 6
- Federal Reserve Announces Comprehensive Program to Provide Up to $2.3 Trillion in Loans to Support Economy
- Federal Regulators Issue Revised Interagency Statement on Loan Modifications
- Paycheck Protection Program Credit Facility and Regulatory Capital Rule Announced
- SEC Leadership Urges Disclosure of Current and Future Operational and Financial Planning
- FinCEN Provides Updated COVID-19-Related Guidance on BSA and Other Items
- Delaware Clarifies Virtual Stockholder Meeting Requirements
- New York Extends Order Allowing for Remote Witnessing of Documents
- Pennsylvania Issues Guidance on Residential Real Estate Transactions Begun Prior to March 6
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.
Federal Reserve Announces Comprehensive Program to Provide Up to $2.3 Trillion in Loans to Support Economy
On April 9, 2020, the Federal Reserve announced additional actions to provide up to $2.3 trillion in loans to support the U.S. economy. The comprehensive program involves providing liquidity to participating institutions through term financing backed by loans guaranteed by the U.S. Small Business Administration under the Paycheck Protection Program (PPP), purchases of loans through the Main Street Lending Program, expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities, as well as the Term Asset-Backed Securities Loan Facility, and establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipalities.
Federal Regulators Issue Revised Interagency Statement on Loan Modifications
The federal financial institution regulatory agencies, in consultation with state financial regulators, issued a revised interagency statement on April 7, encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications. The revised statement clarifies the interaction between the interagency statement issued on March 22 and the temporary relief provided by Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). It also provides supervisory interpretations on past due and nonaccrual regulatory reporting of loan modification programs and regulatory capital.
Paycheck Protection Program Credit Facility and Regulatory Capital Rule Announced
On April 7, the Federal Reserve authorized each of the Federal Reserve Banks (FRBs) to establish the Payment Protection Program Lending Facility, which will allow the FRBs to extend non-recourse loans to ultimately fund PPP loans. Similarly, the Office of the Comptroller of the Currency (OCC), Federal Reserve and Federal Deposit Insurance Corporation (FDIC) released the Interim Final Rule on the Regulatory Capital Rule for the PPP Lending Facility and PPP loans.
SEC Leadership Urges Disclosure of Current and Future Operational and Financial Planning
On April 8, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton and SEC Division of Corporation Finance Director William Hinman released a statement reinforcing the importance of disclosure through earnings releases and advocating for robust disclosure and engagement. To that end, the statement provides a number of observations and requests, and asks public companies to provide as much information as practicable regarding their current operating status and future operating plans in light of COVID-19-related mitigation conditions in their upcoming quarterly reports.
FinCEN Provides Updated COVID-19-Related Guidance on BSA and Other Items
The Financial Crimes Enforcement Network (FinCEN) issued an updated COVID-19 notice on April 3 that recognizes the effect that the crisis may have on the ability of financial institutions to meet certain Bank Secrecy Act (BSA) obligations, including the timing requirements for certain BSA report filings. The notice provides for certain regulatory relief under the risk-based approach to BSA compliance, including exempting from beneficial ownership requirements new loans extended to existing customers under the CARES Act PPP.
Delaware Clarifies Virtual Stockholder Meeting Requirements
On April 6, Delaware Gov. John Carney issued an executive order allowing Delaware corporations that have noticed a stockholder meeting for a physical location to conduct the meeting solely by remote communication after notifying stockholders of the change only through a document publicly filed with the SEC and a press release that must be promptly posted to the corporation's website.
New York Extends Order Allowing for Remote Witnessing of Documents
New York Gov. Andrew Cuomo on April 7 extended an executive order allowing for, and providing guidance on completing, the remote witnessing of documents under certain provisions of the New York Estates Powers and Trusts Law, the Public Health Law, the Real Property Law and the General Obligations Law. The order now is effective through May 7, 2020.
Pennsylvania Issues Guidance on Residential Real Estate Transactions Begun Prior to March 6
On April 8, the Pennsylvania Department of State issued limited guidance allowing for certain in-person activities for residential real estate transactions that were under a signed contract before the March 6 Emergency Disaster Declaration by Pennsylvania Gov. Tom Wolf. The guidance provides parameters for conducting in-person inspections, appraisals, final walk-throughs and title insurance activities. For residential real estate contracts entered into after March 6, such in-person functions are prohibited until the Emergency Disaster Declaration is lifted for Pennsylvania, thus calling into question the consummation of such transactions if one or more of the above in-person functions are required.
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.