There’s talk of a “new normal” in news articles, business plans and school emails. Everything has changed, from buying groceries to celebrating birthdays online, and many believe these changes will become permanent.
Even Congress has operated differently— it quickly negotiated and passed four bills with strong bipartisan support to provide relief during the COVID-19 crisis. This included authorizing the largest spending package in U.S. history in a matter of days with unanimous consent. Some may wonder if Congress is also adopting a “new normal” of bipartisan cooperation.
Yet there are plenty of signs that Congress hasn’t changed its ways. The U.S. House recently passed a three trillion-dollar stimulus package -- largely along party lines -- that the U.S. Senate won’t even consider. With the summer months upon us, both parties are shifting more of their focus to the November elections. While campaign stops and the party conventions are expected to look different this year, negative ads and partisan arguments will remain.
HEROES Act Passes the House
The Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) passed the House on May 15, largely along party lines. The bill is not expected to be taken up by the Senate, but it does indicate the House Democrats’ priorities for the next stimulus package.
- $1 trillion to state, local, territorial and tribal governments
- $100 billion in emergency rental assistance
- Changes to the Paycheck Protection Program (PPP), including extending the deadlines for using funds and removing the requirement that 75% of the loan must be used for payroll to receive loan forgiveness
- Provisions from the SAFE Banking Act that protect banks that service the cannabis industry
- A second round of payments of up to $1,200 per individual
- Extension of additional $600-per-week unemployment benefits through January 2021
CRA Final Rule
The Office of Comptroller of the Currency (OCC) released the final rule updating the Community Reinvestment Act (CRA), but was not joined by the FDIC.
FDIC Chairman Jelena McWilliams said in a statement addressing the CRA joint proposed rulemaking, "There are many provisions in the final rule that will greatly benefit low- and moderate-income communities and provide greater clarity to banks on CRA expectations. While the FDIC strongly supports the efforts to make the CRA rules clearer, more transparent and less subjective, the agency is not prepared to finalize the CRA proposal at this time. The FDIC recognizes the herculean effort community banks are making to support America's small businesses and families during this challenging time and encourages financial institutions to work constructively with borrowers affected by COVID-19."
The final rule adopted by OCC includes a list of qualifying activities, additional assessment areas and additional methods for evaluating CRA performance.
to view the final rule.
OCC’s Joseph Otting Resigns
On May 29, Joseph Otting will step down as Comptroller of the Currency. He was sworn in on November 2017 to a five-year term. First Deputy and Chief Operating Officer Brian P. Brooks will become Acting Comptroller of the Currency until the president nominates, and the Senate confirms, a permanent replacement.
Senate Banking Oversight Hearing with Financial Regulators
The Senate Banking Committee held a virtual oversight hearing with financial regulators on May 12.
Providing testimony was Federal Reserve Vice Chairman of Supervision, Randy Quarles; Comptroller of the Office of the Comptroller of the Currency, Joseph Otting; Chairman of the Federal Deposit Insurance Corporation, Jelena McWilliams; and Chairman of the National Credit Union Administration, Rodney Hood. The hearing focused on each agency’s response to the COVID-19 crisis and their implementation of federal programs recently authorized by Congress.
to view a recording of the hearing.
Additional FHFA Relief for Homeowners and Renters
The Federal Housing Finance Agency (FHFA) announced additional relief for homeowners and renters. Fannie Mae and Freddie Mac are extending their moratorium on foreclosures and evictions until June 30, 2020, for single-family mortgages only. The current moratorium was set to expire on May 17.
FHFA also announced that homeowners in forbearance won’t have to make a lump sum payment. Instead, they have three options: set up a repayment plan, modify the loan so the payments are added to the end of the mortgage or set up a modification that reduces the monthly mortgage payment.
Homeowners are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, payment deferral option or loan modification.
House Financial Services Roundtable on Impact of COVID-19 on U.S. Housing Markets
The House Financial Services Subcommittee on Housing, Community Development and Insurance held a virtual roundtable titled “Reviewing the Impact of the COVID-19 Pandemic on U.S. Housing Markets.”
The panelists for the virtual roundtable were Diane Yentel, President and CEO, National LowIncome Housing Coalition; Kristy W. Fercho, Vice Chairman, Mortgage Bankers Association; and Jenny Schuetz, Metropolitan Policy Program Fellow, Brookings Institution.
o watch the roundtable.
FHFA Issues Proposed Rule on Capital Requirements for Fannie Mae and Freddie Mac
FHFA released a proposed rule to recapitalize Fannie Mae and Freddie Mac as the agency moves toward releasing them from conservatorship.
The agency said with “this re-proposal, FHFA is proposing enhancements to establish a post-conservatorship regulatory capital framework that ensures that each Enterprise operates in a safe and sound manner and is positioned to fulfill its statutory mission to provide stability and ongoing assistance to the secondary mortgage market across the economic cycle, in particular during periods of financial stress.“
to view the proposed rule.