April 2, 2020 

MBA Note On Treasury Guidance

As you prepare to work with your customers on the Paycheck Protection Program, many questions are still unanswered. MBA staff has not posted the FAQ document yet and has left some questions unanswered today. We have been waiting to gain additional guidance from the Treasury that was intended to be released today or tomorrow, which could potentially alter the initial guidance released earlier this week. As soon as that guidance is released, MBA staff will review, update and post its FAQ and respond to any unanswered member questions. We are doing this to avoid giving you bad information. Thank you for your patience.

Fed Makes Temporary Change To Supplementary Leverage Ratio Calculation

The Federal Reserve announced it will temporarily exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the supplementary leverage ratio for holding companies, effective March 31. This action, the latest the Fed has taken to allow the continued flow of credit to households and businesses, comes amid deteriorating conditions in the Treasury market, significant inflows of consumer deposits and increased reserve levels.
 
“The board is providing the temporary exclusion in the interim final rule to allow banking organizations to expand their balance sheets as appropriate to continue to serve as financial intermediaries, rather than to allow banking organizations to increase capital distributions, and will administer the interim final rule accordingly,” the Fed said, adding that this change would temporarily decrease tier 1 capital of holding companies by approximately 2% in aggregate. 

CFPB Issues Statement On Reporting Of Consumer Credit Data During Pandemic

The Consumer Financial Protection Bureau issued a policy statement on financial institutions’ reporting obligations under the Fair Credit Reporting Act during the coronavirus pandemic. The CARES Act amended the FCRA to provide that credit furnishers that agree to defer payments, forbear on any delinquent credit or account or provide any other relief to consumers during the national emergency must report that account as current to consumer reporting agencies.
 
In the policy statement, the CFPB said it “expects furnishers to comply with the CARES Act and will work with furnishers as needed to help them do so.” As noted in previous guidance, the CFPB urged institutions to work constructively with borrowers facing financial hardship, and said that it “does not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflects the payment relief measures they are employing.”
 
The bureau also reminded furnishers and consumer reporting agencies that they may take advantage of statutory and regulatory provisions that eliminate the obligation to investigate disputes submitted by credit repair organizations and disputes they reasonably determine to be frivolous or irrelevant. 

DOL Issues ‘Temporary Rule’ To Implement Paid Leave Law

The U.S. Department of Labor has issued a “temporary rule” to implement the paid leave provisions in the Families First Coronavirus Response Act, which was signed into law March 18 and which took effect April 1.

The temporary rule provides for up to 12 weeks of leave, 10 weeks of which is paid, for employees (of employers with fewer than 500 employees) who cannot work because they need to care for a child out of school or whose child care provider is unavailable because of the coronavirus. The rule also provides for two weeks of paid sick leave for employees quarantining, caring for a person with the coronavirus or caring for a child whose school or place of care is closed because of the coronavirus. Employers may deduct 100% of the paid leave from their payroll taxes.

The temporary rule requires an employee to provide documentation of the need for the leave and to provide timely notice to the employer. The rule also permits a small business with fewer than 50 employees to deny a leave request if the employee’s leave would entail a substantial risk to the financial health or operational capabilities of the business because of the employee’s specialized skills, knowledge of the business or responsibilities.