Featured Product

    FDIC Rule to Mitigate Effects of Participation in Liquidity Programs

    June 22, 2020

    FDIC approved a final rule that mitigates the deposit insurance assessment effects of participating in the Paycheck Protection Program (PPP) established by the U.S. Small Business Administration and the Paycheck Protection Program Liquidity Facility (PPPLF) and Money Market Mutual Fund Liquidity Facility (MMLF) established by FED. To ensure that the changes are applied to assessments starting in the second quarter of 2020, the final rule will be effective immediately on publication in the Federal Register, with an application date of April 01, 2020. The final rule affects the agencies’ current information collections for Call Reports FFIEC 031, FFIEC 041, and FFIEC 051. FDIC also published a statement from the Chairperson Jelena McWilliams on the final rule.

    The PPP, PPPLF, and MMLF were put in place to provide financing to small businesses and liquidity to small business lenders and the broader credit markets, with the ultimate goal of helping to stabilize the financial system during this time of significant stress. The final rule is intended to ensure that banks will not be subject to significantly higher deposit insurance assessments for participating in these programs. The final rule:

    • Removes the effect of participation in the PPP and borrowings under the PPPLF on various risk measures used to calculate an insured depository institution’s assessment rate
    • Removes the effect of participation in the PPP and MMLF program on certain adjustments to an insured depository institution’s assessment rate
    • Provides an offset to an insured depository institution’s assessment for the increase to its assessment base attributable to participation in the PPP and MMLF
    • Removes the effect of participation in the PPP and MMLF when classifying insured depository institutions as small, large, or highly complex for assessment purposes

    On May 20, 2020, FDIC proposed to mitigate the deposit insurance assessment effects of participating in the PPP, PPPLF, and MMLF programs. In response to the proposal, FDIC received 41 comment letters from depository institutions, depository institution holding companies, trade associations, and other interested parties. Respondents generally supported the proposal, but expressed concerns with certain aspects of the proposal. FDIC considered all comments received and has made some changes in the final rule, while clarified other aspects of the rule that remain unchanged from the proposed rule.

    FDIC will apply the modifications under the final rule in calculating an institution’s deposit insurance assessment based on the items insured depository institution will report on the Call Reports or the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002), as applicable, beginning as of June 30, 2020. The changes to the Call Reports, the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks, and their respective instructions have been addressed in a separate Federal Register notice or notices.

     

    Related Links

    Effective Date: Date of Publication in FR

    Keywords: Americas, US, Banking, COVID-19, Paycheck Protection Program, MMLF, PPPLF, Liquidity Facility, Credit Risk, Call Report, Insured Depository Institutions, FED, FDIC

    Related Articles
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS and FSB Set Out Recommendations for Benchmark Transition

    BCBS and FSB published a report on supervisory issues associated with benchmark transition.

    July 09, 2020 WebPage Regulatory News
    News

    IAIS Sets Out Recommendations for Benchmark Transition for Insurers

    IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.

    July 09, 2020 WebPage Regulatory News
    News

    ESMA Updates Reporting Manual on European Single Electronic Format

    ESMA updated the reporting manual on the European Single Electronic Format (ESEF).

    July 09, 2020 WebPage Regulatory News
    News

    EBA Calls on Resolution Authorities to Consider Impact of COVID Crisis

    EBA published a statement on resolution planning in light of the COVID-19 pandemic.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    July 08, 2020 WebPage Regulatory News
    News

    ECB Guideline on Materiality Threshold for Credit Obligations Past Due

    ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.

    July 08, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-14 With Respect to PPP and CARES Act

    FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.

    July 08, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5458