America’s focus on the “first 100 days” of a new administration began when Franklin D. Roosevelt used the phrase in a fireside chat broadcasted in 1933. Taking office during the Great Depression, Roosevelt quickly pushed Congress to pass 15 bills, including the Emergency Banking Act and other New Deal programs. This became the standard for discussing the early effectiveness of new presidents.
President Joe Biden signed the American Rescue Plan halfway through his first 100 days in office. This $1.9 trillion COVID-19 relief bill is viewed as a huge victory by the administration as it was a central campaign promise. Reconciliation was used to pass the bill with a simple majority in the Senate, but negotiations were needed to gain the support of all 50 Democratic senators. This provided a preview of the difficult road ahead as the process may be used later this year to pass an infrastructure bill. The scope and cost of the plan will likely become items of negotiation with moderate Democrats.
American Rescue Plan Signed into Law
The American Rescue Plan was signed into law on March 11, making it one of the largest federal relief packages in history.
Provisions include:
- $1,400 payments for individuals within certain income limits
- $360 billion in state and local government funding for expenses through 2024
- $300 weekly Federal Pandemic Unemployment Compensation through Sept. 6
- $7.25 billion in additional funds for the Paycheck Protection Program (program was not extended past March 31)
- $28.6 billion for a Restaurant Revitalization Fund to be administered by the SBA
- $15 billion for additional advance payments under the SBA’s Economic Injury Disaster Loan program
- $10 billion for the State Small Business Credit Initiative
Housing provisions include:
- $27.5 billion in rental assistance for a variety of programs
- $5 billion in emergency assistance for people experiencing or at risk of homelessness
- $10 billion in state homeowner assistance programs that assist with mortgage payments, property taxes, property insurance, utilities, and other housing related costs
CFPB Makes Changes to Qualified Mortgage Rules
The Consumer Financial Protection Bureau (CFPB) released a notice of proposed rulemaking to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021, to Oct. 1, 2022. The following will remain available through Oct. 1, 2022:
- The old, debt-to-income (DTI) based General QM definition
- The new, price-based General QM definition
- The GSE Patch which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac
The CFPB also issued a statement that it is considering whether to initiate a rulemaking to revisit the Seasoned QM Final Rule. If the CFPB decides to do so, it will consider whether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received from March 1, 2021, until the effective date of such a final rule.
Fannie and Freddie Affordable Housing Allocations
Federal Housing Finance Director Mark Calabria announced that he has authorized the disbursement of $1.09 billion for Fannie Mae and Freddie Mac's affordable housing allocations for 2020. This is the largest amount ever disbursed and more than doubles what was provided in the prior year. Of the $1.09 billion, $711 million will go to the U.S. Department of Housing and Urban Development for the Housing Trust Fund and $383 million will go to the Department of the Treasury for the Capital Magnet Fund.
The Housing and Economic Recovery Act of 2008 requires Fannie Mae and Freddie Mac to set aside an amount equal to 4.2 basis points of each dollar of the unpaid principal balance of their total new business purchases and to allocate and transfer 65% of those funds to the Housing Trust Fund and the 35% to the Capital Magnet Fund.
Supplementary Leverage Ratio Exemptions Set to Expire
The Federal Reserve is temporarily allowing banks to exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the Supplementary Leverage Ratio (SLR). The SLR requires banks with more than $250 billion in assets to hold extra capital. The temporary exemption will expire on March 31, 2021.
Treasury Opens Applications for the Emergency Capital Investment Program
The U.S. Department of Treasury opened applications for the Emergency Capital Investment Program that was established by the Consolidated Appropriations Act, 2021.
Under the program, Treasury will provide up to $9 billion in capital directly to depository institutions that are certified Community Development Financial Institutions (CDFIs) or minority depository institutions (MDIs) to provide loans, grants and forbearance for small businesses, minority-owned businesses and consumers – especially in low-income and underserved communities – that may be disproportionately impacted by the economic effects of COVID-19. Treasury will set aside $2 billion for CDFIs and MDIs with less than $500 million in assets and an additional $2 billion for CDFIs and MDIs with less than $2 billion in assets.
Community Project Funding in Fiscal Year 2022
The House Appropriations Committee recently announced that members of Congress can submit requests for Community Project Funding for the upcoming fiscal year. Each member of Congress can submit up to 10 requests for state or local governmental grantees and for eligible nonprofits. Funding will be limited to no more than 1% of discretionary spending, likely resulting in approval of only a small portion of total requests. Evidence of community support must be included and there will be a searchable online database. Members of Congress have until mid-April to submit requests for fiscal year 2022.
