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New Jersey Department of Banking and Insurance issues bulletin regarding reductions in premiums
On May 12, the New Jersey Department of Banking and Insurance issued Bulletin No. 20-22 to certain insurance-related entities, including licensed, admitted, and surplus lines insurers transacting property and casualty insurance in New Jersey. In light of the reduced risk of loss for certain insurance as a result of Covid-19, the bulletin requires premium reductions for those lines of insurance. Where applicable, insurers are ordered to make an initial premium refund or other adjustment to adversely impacted New Jersey policy-holders, and for each month that the public health emergency is in effect. Instructions are provided for submitting the components of the refund program via the System for Electronic Rates and Forms Filing. Insurers that can demonstrate that their rates are not excessive, inadequate, or unfairly discriminatory, or that otherwise contend they should not be subject to the terms of the bulletin, may submit the basis for this position and supporting documentation by June 1, 2020.
Colorado issues guidance to critical financial institutions
On May 12, Colorado issued additional guidance to critical financial institutions during the Safer at Home for Public Health Order 20-28. The guidance clarifies that financial and professional institutions are considered “Critical Business/Critical Service” under the public health order. It also provides responses to frequently asked questions, including how to follow guidance at the city, county, and state level, whether banks and credit union branches are considered “Critical Retailers,” the requirements for monitoring employee health, and cleaning procedures at the financial institutions’ facilities.
OCC issues guidance about health-related changes to annual meetings
On May 12, the Office of the Comptroller of the Currency issued guidance for national banks and federal savings associations that are considering changing the date, time, or location of their annual meetings as a result of stay-at-home orders or other health concerns. The OCC clarified that, for national banks, the requirement to hold an annual meeting is governed by state laws and the bank’s governing documents. OCC regulations require federal savings associations to hold annual meetings within 150 days after the end of the fiscal year and to incorporate the time frame for conducting the meeting into their bylaws. Although federal savings associations must receive OCC approval to amend their bylaws to incorporate a longer time frame, the OCC will deem such an amendment as approved and effective if it meets the conditions set out in the guidance. The OCC also strongly encourages all banks to use electronic methods for submitting licensing filings during the COVID-19 emergency.
Federal Reserve publishes revised terms, other information regarding lending and liquidity facilities
On May 12, the Federal Reserve Board issued additional information regarding the Term Asset-Backed Securities Loan Facility (TALF) and the Payment Protection Program Liquidity Facility (PPPLF). It issued a revised term sheet for TALF, indicating that eligible borrowers include businesses that (i) are created or organized in, or under the law of the United States; (ii) have significant operations in and a majority of their employees based in the United States; and (iii) maintain an account relationship with a primary dealer. The board also announced that, on a monthly basis, it will publicly disclose the name of each participant in the TALF and the PPPLF, as well as amounts borrowed and interest rate charged. In addition, the board issued FAQs regarding the TALF.
New Jersey Department of Banking extends filing deadlines for certain annual reports
On May 12, the New Jersey Department of Banking Insurance issued a bulletin regarding the extension of deadlines for certain entities and individual regulated by the Division of Banking to file annual reports. Certain enumerated licensees, including check cashers, insurance premium finance companies, motor vehicle installment sellers, and money transmitters, are granted an extension until June 1 to file annual reports. However, licensees must file their subsequent annual report by April 1, 2021. Mortgage lenders and mortgage brokers who are required to file an annual report on or before May 1, are also granted an extension to June 1. The next annual report must be filed by May 1, 2021.
FINRA provides guidance on qualification examinations
On May 12, FINRA added a new question to its frequently asked questions page regarding the availability of the waiver process for qualification examinations. FINRA has clarified that its waiver process is currently functional and FINRA may, in exceptional cases and where good cause is shown, waive the applicable qualification examinations and accept other standards as evidence of an applicant’s qualification for registration. Guidance is provided regarding how to submit a waiver request.
Tennessee governor extends authorization of remote notarization
On May 12, Tennessee Governor Bill Lee issued Executive Order No. 37 allowing for remote notarizations and witnessing of documents until June 30, thereby extending the relief previously granted in Executive Order No. 26, which was set to expire on May 18.
Tennessee extends timeline for bank examinations and authorizes virtual shareholder meetings during pandemic
On May 12, Tennessee Governor Bill Lee issued Executive Order No. 36 suspending or amending a variety of statutory and regulatory requirements to facilitate the treatment and containment of Covid-19. These include, among other things, extending examination cycles for financial institutions, extending timing requirements for securities registrations, and allowing for virtual shareholder meetings. The order will be in effect until June 30, unless amended or revised.
Federal regulators discuss Covid-19 responses during Senate hearing
On May 12, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled “Oversight of the Financial Regulators,” which primarily focused on responses by the Federal Reserve Board (Fed), FDIC, OCC, and NCUA to the Covid-19 pandemic. Committee Chairman Mike Crapo (R-ID) opened the hearing by thanking the regulators for crafting regulatory responses to assist financial institutions in meeting the needs of affected borrowers, and encouraged the regulators to find ways to provide flexibility for financial institutions that lend to households and businesses. Crapo also stressed the importance of making sure the Fed’s Main Street Lending Program (covered by a Buckley Special Alert) and the Municipal Liquidity Facility (coved by InfoBytes here) are “up and running quickly,” and expressed continued concerns that the “inclusion of population thresholds for cities and states that were not a part of the CARES Act will still impede access to smaller and rural communities.” Ranking Member Sherrod Brown (D-OH) argued, however, that the regulators’ relief measures have not favored consumers.
Fed Vice Chair for Supervision Randal K. Quarles provided an update on the Fed’s Covid-19 regulatory and supervisory efforts. When asked during the hearing when the Main Street Lending Program would be operational, he declined to give an exact date but emphasized it is the Fed’s “top priority,” and that he did not anticipate it will take months. When questioned about whether the Fed is taking measures to “ensure businesses are getting equitable access to the [lending] facilities,” Quarles stated that the Fed relies on banks to do the underwriting, but will supervise the banks to make sure the underwriting is done “safely and fairly.”
OCC Comptroller Joseph M. Otting also discussed a range of actions taken by the agency in response to the pandemic and outlined additional OCC priorities and objectives, including its proposal to modernize the Community Reinvestment Act (CRA). Senator Menendez (D-NJ) asked whether the OCC should revisit the proposed CRA rewrite, citing the inability of some small businesses—particularly minority-owned businesses—to obtain relief under the Payroll Protection Program (PPP). In response, Otting argued that the rewrite (done in conjunction with the FDIC—see InfoBytes CRA coverage here) should actually be accelerated “because it will drive more dollars into low and moderate income communities” impacted by the pandemic. However, several Democrats on the Committee disagreed and called for a separate hearing to discuss the CRA proposal.
FDIC Chairman Jelena McWilliams also addressed actions undertaken to maintain stability and to provide flexibility to both banks and consumers. Among other things, McWilliams stated that banks should rely on borrowers’ statements certifying that their economic need is legitimate when making PPP loans. “Our instruction to banks has been to make sure these loans are not being traditionally underwritten [and] to take a look at the certification that the borrower is providing,” McWilliams said during the hearing. She also emphasized that all banks must comply with fair lending laws when making PPP loans, whether or not specific guidance has been issued.
NCUA Chairman Rodney E. Hood also outlined agency measures in response to the pandemic. Among other things, Hood noted that the NCUA has issued guidance to support credit union industry participation in the PPP and approved several regulatory changes concerning the classification of PPP loans for regulatory capital and commercial underwriting purposes.
The following day, the House Subcommittee on Consumer Protection and Financial Institutions also held a roundtable with the federal regulators to discuss Covid-19 responses.
Federal agencies launch joint housing assistance website
On May 12, the CFPB, the Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD) announced a new mortgage and housing assistance website, which consolidates the CARES Act mortgage and rent relief protections, tips to avoid Covid-19 related scams, and tools for homeowners and renters to determine if their property is federally backed. The release details the steps the CFPB has taken in response to the Covid-19 pandemic, including informing consumers of their protections under newly created programs and releasing a policy statement concerning the responsibilities of credit reporting companies and furnishers. The release also outlines efforts that FHFA’s regulated entities and HUD have taken to address the national emergency, including forbearance options for homeowners and eviction protections for renters who live in multifamily properties that are backed by Fannie Mae or Freddie Mac.