US Agencies Extend Volcker Rule Consultation, Clarify Mortgage Rules
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.
Related Links
- 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
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
BoE Seeks Information Before Migrating Statistical Reporting to BEEDS
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
CFRF Publishes Guides to Manage Financial Risks from Climate Change
The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
ESAs Report on Supervisory Independence of Competent Authorities
The European Supervisory Authorities (ESAs) published individual reports on the supervisory independence of competent authorities in their respective sectors.
FED Updates FR Y-9C Form and Instructions, Proposes to Extend FR 2510
The Board of Governors of the Federal Reserve System (FED) updated reporting form and instructions, along with the associated supplemental instructions, for the information collection on consolidated financial statements for holding companies (FR Y-9C).
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
