The Latest Updates on NCUA, PPP, SBA, FHFA, and CFPB

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The National Credit Union Administration (NCUA) Board will meet on June 25 at 7 a.m. (Pacific). Its agenda includes: 1) Board Briefing, Minority Depository Institution Annual Report; 2) Board Briefing, NCUA Guaranteed Notes Oversight Program; 3) Request for Information, Strategies for Future Examination and Supervision Utilizing Digital Technology; 4) Final Rule, Technical Amendments to NCUA’s Rules; and 5) Proposed Rule, Part 702, Risk-Based Net Worth.

The California and Nevada Credit Union Leagues will monitor the board meeting and provide an update soon after. NCUA Board meetings are broadcast “live” online and can be accessed from NCUA’s homepage at Open board meetings are also tweeted live; follow @TheNCUA on Twitter.

NCUA Launches Onsite Exam Transition Plan
The NCUA has posted its latest Letter to Credit Unions 20-CU-20. The agency is launching a multi-phase transition plan for the resumption of its onsite operations. The phased transition plan provides a framework for how and when NCUA staff resumes an onsite presence at credit unions and NCUA offices. The transition plan may begin as early as July 6 and could include conducting voluntary onsite examinations.

The California and Nevada Credit Union Leagues will be in contact with NCUA Western Region Director Cherie Freed to ascertain more information and details.

NCUA Encourages CUs on ‘Main Street Lending Program’
The NCUA is encouraging credit unions to participate in the Federal Reserve’s Main Street Lending Program to assist local businesses, if appropriate. The program offers five-year loans, with floating rates, and principal and interest payments deferred to assist businesses facing temporary cash flow interruptions. The loans range in size from $250,000 – $300 million. Credit unions will be able to assist members with minimal risk exposure, as the loans will be offered as a participation with the Federal Reserve providing 95 percent of the loan and the credit union providing 5 percent (the credit union will service the loan). The program is designed to help credit flow to businesses that were in sound financial condition before the COVID-19 crisis but now need loans to help maintain operations. Read more here.

NCUA Board Nominee Announced
President Donald Trump has announced his intent to nominate Kyle Hauptman to be a member of the NCUA Board. He is being nominated to the seat currently occupied by Boardmember Mark McWatters.

Hauptman is currently Sen. Tom Cotton’s advisor on economic policy, as well as Staff Director of the Senate Banking Committee’s Subcommittee on Economic Policy. Prior to joining Senator Cotton’s office, Hauptman worked on the 2016 Presidential Transition Team.

From 2015 to 2016, Hauptman served on the U.S. Securities and Exchange Commission’s Advisory Committee for Small and Emerging Companies. Previously, he was Mitt Romney’s policy advisor for financial services during his 2012 presidential campaign. Before that, Hauptman was a fixed-income trader in Tokyo, New York City, and Sydney, Australia. He earned his MBA from Columbia University and his B.A. from UCLA.

An official nomination will be forthcoming, and then Hauptman must be confirmed by the Senate.

New ‘EZ’ and Revised PPP Forgiveness Applications
Small business owners now have two application options to pick from when they file to have their Coronavirus-relief loans forgiven. The Treasury Department and U.S. Small Business Administration released two versions of the Paycheck Protection Program (PPP) forgiveness form today, including a shorter simplified version (form 3508EZ) that requires fewer calculations and less documentation. The new EZ application applies to borrowers that are self-employed and have no employees; or did not reduce the salaries or wages of their employees by more than 25 percent, and did not reduce the number or hours of their employees; or experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25 percent. You can also access the revised PPP loan forgiveness application implementing the PPP Flexibility Act of 2020 signed into law on June 5 here. Both forms reflect congressional changes to the loan program, including an extended 24-week covered period.

SBA Issues Interim Final Rules on PPP Changes
The SBA has also issued two interim final rules to implement amendments to the PPP made by the Paycheck Protection Program Flexibility Act (PPP Flexibility Act). The PPP Flexibility Act modifies certain CARES Act provisions related to the forgiveness of PPP loans, allows PPP borrowers who receive loan forgiveness to defer payroll taxes, and provides small businesses more time and flexibility to use their PPP funds.

On June 10, the SBA issued the Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to First Interim Final Rule (PPP IFR 17), and on June 12 the SBA issued the Business Loan Program Temporary Changes; Paycheck Protection Program – Additional Revisions to First Interim Final Rule (PPP IFR 18).

The PPP IFR 17 revises SBA's First PPP Interim Final Rule issued April 2 by changing key provisions of the PPP, such as the loan maturity, deferral of loan payments, and forgiveness provisions, to conform to the PPP Flexibility Act. This IFR also makes conforming amendments to the use of PPP loan proceeds in accordance with amendments made in the PPP Flexibility Act. Several of these amendments are retroactive to March 27, the date of enactment of the CARES Act. The PPP IFR 17 confirms that June 30 remains the last date on which a PPP loan application can be approved.

The PPP IFR 18 revises SBA's First PPP Interim Final Rule by changing the eligibility requirement related to felony convictions of applicants or owners of the applicant.

SBA issued revised PPP application forms to conform to these changes. The revised borrower application form is here, and the revised lender application form is here.

FHFA Extends Foreclosure and Eviction Moratorium
The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will extend their single-family moratorium on foreclosures and evictions until at least Aug. 31, 2020. The foreclosure moratorium applies to GSE-backed single-family mortgages only. The current moratorium was set to expire on June 30. FHFA stated it will continue to monitor the Coronavirus situation and update policies as needed. Read more here.

CFPB FAQs: Consumer Reporting Amid COVID-19
The Consumer Financial Protection Bureau has issued 10 FAQs related to consumer credit reporting amid the Coronavirus pandemic. The bureau previously issued a statement informing lenders they must comply with the credit reporting requirements of the CARES Act. These FAQs address the credit reporting requirements of the CARES Act, including considerations for furnishers when reporting consumers as current as required by the CARES Act. The FAQs also clarify that reporting that a consumer is affected by a natural or declared disaster is not a substitute for complying with the CARES Act credit reporting requirements. You can read the announcement here.

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