April 10, 2020

Ashcroft Announces Approved Electronic Notary Vendors

Earlier this week, Gov. Mike Parson signed an executive order suspending a statutory requirement that a notary public must conduct the notarization of official documents while a signer appear personally in front of him or her.

Today, Secretary of State Jay Ashcroft announced the first of what is expected to be several approved vendors capable of providing the audio-video services required to conduct electronic notarization — Pavaso, NEXSYS and NotaryCAM. Additional approvals are anticipated in the coming days.

The application for electronic notary form may be completed and emailed to commissions@sos.mo.gov. Applicants will receive a confirmation email when the application has been processed and approved. Questions about the suspension of the personal appearance requirement may be directed to the commissions unit within the Business Services Division by emailing commissions@sos.mo.gov or calling 573-751-2783.

Fed Unveils $2.3 Trillion More In Lending Capacity, Details 'Main Street' Program

The Federal Reserve has taken additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.

"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," said Federal Reserve Board Chair Jerome H. Powell. "The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."

The Federal Reserve's role is guided by its mandate from Congress to promote maximum employment and stable prices, along with its responsibilities to promote the stability of the financial system. In support of these goals, the Federal Reserve is using its full range of authorities to provide powerful support for the flow of credit in the economy.

The actions the Federal Reserve is taking today to support employers of all sizes and communities across the country will:
  • bolster the effectiveness of the Small Business Administration's Paycheck Protection Program (PPP) by supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses. The PPP provides loans to small businesses so that they can keep their workers on the payroll. The Paycheck Protection Program Liquidity Facility (PPPLF) will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value
  • ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans through the Main Street Lending Program. The Department of the Treasury, using funding from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) will provide $75 billion in equity to the facility
  • increase the flow of credit to households and businesses through capital markets, by expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF) as well as the Term Asset-Backed Securities Loan Facility (TALF). These three programs will now support up to $850 billion in credit backed by $85 billion in credit protection provided by the Treasury
  • help state and local governments manage cash flow stresses caused by the coronavirus pandemic by establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipalities. The Treasury will provide $35 billion of credit protection to the Federal Reserve for the Municipal Liquidity Facility using funds appropriated by the CARES Act.
The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans.

The Federal Reserve and the Treasury recognize that businesses vary widely in their financing needs, particularly at this time, and, as the program is being finalized, will continue to seek input from lenders, borrowers, and other stakeholders to make sure the program supports the economy as effectively and efficiently as possible while also safeguarding taxpayer funds. Comments may be sent to the feedback form until April 16.

To support further credit flow to households and businesses, the Federal Reserve will broaden the range of assets that are eligible collateral for TALF. As detailed in an updated term sheet, TALF-eligible collateral will now include the triple-A rated tranches of both outstanding commercial mortgage-backed securities and newly issued collateralized loan obligations. The size of the facility will remain $100 billion, and TALF will continue to support the issuance of asset-backed securities that fund a wide range of lending, including student loans, auto loans, and credit card loans.

The Municipal Liquidity Facility will help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities. The facility will purchase up to $500 billion of short term notes directly from U.S. states (including the District of Columbia), U.S. counties with a population of at least two million residents, and U.S. cities with a population of at least one million residents. Eligible state-level issuers may use the proceeds to support additional counties and cities. In addition to the actions described above, the Federal Reserve will continue to closely monitor conditions in the primary and secondary markets for municipal securities and will evaluate whether additional measures are needed to support the flow of credit and liquidity to state and local governments.

All of the facilities mentioned above are established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.
Term Sheet

Main Street Lending Program Term Sheet

Agencies To Incorporate CARES Act Changes Into March 31 Call Report

In a letter to bank CEOs last night, the federal banking agencies restated that they would not take action against institutions that submit their March 31, 2020, Call Report after the filing deadline, provided that the report is submitted within 30 days of the original filing date. The agencies encouraged banks to contact their primary regulator if they anticipate a delayed filing. The filing date for the Call Report, except for certain institutions with foreign offices, is April 30.

The agencies said they are working to update the Call Report instruction books to reflect the community bank leverage ratio rule and the capital simplification rule, which took effect January 1. In addition, the recent CARES Act changes providing relief to banks as a result of the coronavirus also will be applied to the Call Reports for March 31, 2020. These changes include the following.

  • a revised definition of eligible retained income in the capital rule
  • permission for banks to neutralize the effects of purchasing assets through the Money Market Mutual Fund Liquidity Facility on their risk-based and leverage capital ratios
  • an optional delay of CECL effects on regulatory capital
  • an optional early implementation of the standardized approach for calculating the exposure amount of derivatives, or SA-CCR

ABA Provides Consumer Resources on Economic Impact Payments

With the first round of CARES Act direct economic impact payments expected to be issued as soon as next week, the American Bankers Association has created a new educational resource banks can use to educate their customers.

This resource provides the answers to several commonly asked questions including how much individuals can expect to receive based on their income, when they can expect to receive payment, whether payments can be received electronically, what they can do if they do not have a bank account, how to avoid fraud and more. The FAQs will be updated as more information is released by the Treasury Department. 
ABA has also published a list of tips for how consumers can avoid fraud scams related to the economic stimulus payments. 

IRS Announces Additional Extensions for Filing and Payments

The IRS announced it is expanding extensions for certain tax filing and payments dates due to the coronavirus. The IRS issued a notice that, among other things, extends the payment deadline for taxpayers’ second quarter estimated tax payments from June 15 to July 15. The IRS previously extended the individual and other selected filing and payment deadlines from April 15 to July 15.

ABA Webinar To Focus On Families First Coronavirus Response Act

The Families First Coronavirus Response Act, which was passed by Congress last month, provides paid family, medical and sick leave to employees (of banks with fewer than 500 employees) who cannot work because of the coronavirus or who are caring for a child whose school or daycare is closed.
ABA will host a free webinar for members and nonmembers at 1 p.m. Tuesday, April 14, to discuss the new law and provide practical tips for how banks can effectively manage their workforce during the pandemic. A Q&A will follow the presentation.


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