April 29, 2020

Fed To Hold Rates Near Zero; ‘Very Close’ To MSLP Term Sheet Release

With the coronavirus pandemic continuing to cause significant economic disruptions and sharp spikes in unemployment, the Federal Reserve will maintain the target range for the federal funds rate at 0 to 0.25%. “We expect to maintain interest rates at this level until we’re confident the economy has weathered recent events,” said Federal Reserve Chairman Jerome Powell during a virtual press conference following the release of the Federal Open Market Committee statement today.

The FOMC noted in its statement that the pandemic “will weigh heavily on economic activity, employment and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.” Powell noted that these risks include the trajectory of the virus, the possibility of damage to the productive capacity of the economy during an extended period of stagnation and the global economy’s response to the pandemic.

Powell added that in recent weeks the Fed has taken “broad and forceful actions” to ensure the functioning of financial markets and the continued flow of credit and liquidity to businesses and households. These include actions include the establishment of several credit facilities under the Fed’s authority under Section 13(3) of the Federal Reserve Act, that can be expanded if needed, he said. He also noted that the Fed is “very close” to releasing a revised term sheet for its Main Street Lending Program. He added that the Fed would continue to evolve the MSLP and “keep looking to add different products and different kinds of borrowers as we go.”

Groups Call For SBA To Resolve E-Tran Problems

The American Bankers Association joined eight other trade associations representing banks and credit unions of all sizes and business models in calling on Small Business Administration to resolve the E-Tran system access problems that have plagued round two of the Paycheck Protection Program.

“Quite simply, it is taking too long to submit loans and get these funds where they need to go,” the groups said.

In addition to urging SBA to prioritize E-Tran access improvements, the groups also called on the agency to communicate transparently with the industry and the public about the problems.

“If the pace and performance of the E-Tran system cannot be improved, then we ask that you share that information with the public to help manage expectations for all of the small businesses still counting on PPP for a lifeline,” they said, adding that they “have found the lack of transparency and timely guidance on the PPP process impedes the funding of loans to small businesses in need.”

Coronavirus Compliance FAQs, Additional Resources

The MBA Compliance Services team continues to receive compliance questions related to the coronavirus pandemic. The following FAQ documents have been recently updated. 

• Bank Compliance COVID-19 FAQs 
• EIP EFT Payments FAQs
• EIP Paper Check FAQs

The MBA Compliance Services team will continue to update these FAQs with additional questions. 

CFPB Provides Flexibility During COVID-19 Pandemic On Mortgage Origination