US Agencies (CFTC, FDIC, FED, OCC, and SEC) announced that, due to COVID-19, they are extending the comment period for the proposal to modify the Volcker rule’s general prohibition on banking entities investing in or sponsoring covered funds; the comment period is being extended by one month, until May 01, 2020. Additionally, US Agencies (CFPB, FDIC, FED, NCUA, and OCC) and the state financial regulators issued a joint policy statement on the regulatory flexibility to enable mortgage service providers to work with struggling consumers affected by COVID-19. This regulatory flexibility will enhance the ability of mortgage servicers to place consumers in short-term payment forbearance programs such as the one established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020.
Under the CARES Act, borrowers in a federally backed mortgage loan experiencing a financial hardship, directly or indirectly due to COVID-1 pandemic, may request forbearance by making a request to their mortgage service provider and affirming that they are experiencing a financial hardship during the pandemic. In response, servicers must provide a CARES Act forbearance, allowing borrowers to defer their mortgage payments for up to 180 days and possibly longer. The policy statement clarifies that the agencies do not intend to take supervisory or enforcement action against mortgage servicers for delays in sending certain early intervention and loss mitigation notices and taking certain actions related to loss mitigation set out in the mortgage servicing rules, provided that servicers are making good faith efforts to provide these notices and take these actions within a reasonable time.
To further enable short-term payment forbearance programs or short-term repayment plans, mortgage service providers offering these programs or plans will not have to provide an acknowledgement notice within five days of receipt of an incomplete application, provided the service provider sends the acknowledgment notice before the end of the forbearance or repayment period. The guidance also reminds service providers that there is existing flexibility in the rules with respect to the content of certain notices. Finally, to assist servicers experiencing high call volumes from consumers seeking help, the policy statement confirms that the agencies do not intend to take supervisory or enforcement action against mortgage servicers for delays in sending annual escrow statements, provided that servicers are making good faith efforts to provide these statements within a reasonable time.
- Joint Press Release on Mortgage Rules
- Policy Statement on Mortgage Rules (PDF)
- Press Release on Volcker Rule
Comment Due Date: May 01, 2020 (Volcker Rule)
Keywords: Americas, US, Banking, Insurance, Securities, COVID-19, Volcker Rule, Home Mortgage, CARES Act, Credit Risk, FAQ, Home Mortgage Servicing, US Agencies
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.
EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.
EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.
PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.
PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.
BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.
FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.
ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).