Regulatory Actions in Response to COVID-19
In response to the COVID-19 crisis, the Federal Reserve, as well as its federal and state regulatory counterparts, has taken a number of steps to ease the burden on consumers and support the flow of credit and liquidity. Below are highlights of the unprecedented actions taken by regulators in light of the pandemic. For a comprehensive list of Federal Reserve or interagency rulemakings/statements related to COVID-19, visit the Federal Reserve’s COVID-19 resources page, available at www.federalreserve.gov/covid-19.htm .
Press Releases — Relief for Banks
- Appraisals: Federal banking agencies are temporarily deferring real estate–related appraisals and evaluations under the appraisal regulations. The press release, issued on April 14, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200414a.htm .
- Capital: Federal bank regulatory agencies temporarily lowered the community bank leverage ratio to 8 percent, in accordance with Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act. The press release, issued on April 6, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200406a.htm .
- CECL: Federal bank regulatory agencies are allowing banking organizations to mitigate the effects of the current expected credit loss (CECL) accounting standard in their regulatory capital. The press release, issued on March 27, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200327a.htm .The related supervisory letter, SR 20-9, is available at www.federalreserve.gov/supervisionreg/srletters/sr2009.htm .
- Regulatory Reporting: The Federal Reserve offered regulatory reporting relief to small financial institutions affected by the coronavirus. The press release, issued on March 26, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200326b.htm .
- Supervisory Approach: The Federal Reserve adjusted its supervisory approach to focus on monitoring and outreach to help financial institutions of all sizes understand the challenges and risks of the current environment. The press release, issued on March 24, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200324a.htm .
- Supervisory Practices: The Federal Reserve issued guidance on supervisory practices regarding financial institutions affected by the coronavirus. The supervisory letter, SR 20-4/CA 20-3, is available at www.federalreserve.gov/supervisionreg/srletters/sr2004.htm .
Press Releases — Relief for Consumers
- Savings Deposit Transfers: The Federal Reserve is allowing depository institutions to suspend enforcement of the six-transfer limit on savings deposits and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings. The press release, issued on April 24, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200424a.htm .
- Small Business Lending: Federal bank regulatory agencies encouraged lending to small businesses through the Small Business Administration's Paycheck Protection Program, or PPP. The press release, issued April 9, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200409a.htm .The related supervisory letter, SR 20-10, is available at www.federalreserve.gov/supervisionreg/srletters/sr2010.htm .
- Working with Borrowers: Federal banking agencies encouraged financial institutions to work constructively with customers affected by COVID-19 and provided additional information regarding loan modifications and troubled debt restructurings. The press releases, issued April 7, 2020, and March 22, 2020, are available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200407a.htm and www.federalreserve.gov/newsevents/pressreleases/bcreg20200322a.htm , respectively.
- Mortgage Servicers: Federal financial institution regulatory agencies and the state financial regulators are providing regulatory flexibility to enable mortgage servicers to work with struggling consumers affected by the COVID-19 emergency. The press release, issued April 3, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200403a.htm .
- Small-Dollar Loans: Federal banking agencies encouraged banks, savings associations, and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19. The press release, issued March 26, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200326a.htm .The related supervisory letter, SR 20-7/CA 20-5, is available at www.federalreserve.gov/supervisionreg/srletters/sr2007.htm .
Other Regulatory Actions
- Discount Window: Federal bank regulatory agencies encouraged banks to use the Federal Reserve's discount window. The press release, issued March 16, 2020, is available at www.federalreserve.gov/newsevents/pressreleases/bcreg20200316a.htm .
- Federal Reserve Programs: The Federal Reserve established various emergency liquidity and lending facilities as part of its broad effort to support the economy. Information on the various facilities is available on the Board’s COVID-19 resources page under “Funding, Credit, Liquidity, and Loan Facilities” at www.federalreserve.gov/funding-credit-liquidity-and-loan-facilities.htm .
Governor Michelle W. Bowman gave a speech at the Conference for Community Bankers sponsored by the American Bankers Association, in Orlando, FL, on February 10, 2020. Her speech, “Empowering Community Banks,” is available at www.federalreserve.gov/newsevents/speech/bowman20200210a.htm .
Chair Jerome H. Powell gave a speech at the Hutchins Center on Fiscal and Monetary Policy, the Brookings Institution, in Washington, D.C. (via webcast) on April 9, 2020. His speech, “COVID-19 and the Economy,” is available at www.federalreserve.gov/newsevents/speech/powell20200409a.htm .
Governor Michelle W. Bowman gave a speech at the “Age of Advancement: The Intricacies of a Digital World” 2020 Banking Outlook Conference, sponsored by the Federal Reserve Bank of Atlanta, in Atlanta on February 27, 2020. Her speech, “Direction of Supervision: Impact of Payment System Innovation on Community Banks,” is available at www.federalreserve.gov/newsevents/speech/bowman20200227a.htm .
Vice Chair of Supervision Randal K. Quarles gave a speech at Yale Law School in New Haven, CT, on February 11, 2020. His speech, “Spontaneity and Order: Transparency, Accountability, and Fairness in Bank Supervision,” is available at www.federalreserve.gov/newsevents/speech/quarles20200211a.htm .
Governor Lael Brainard gave a speech at the Symposium on the Future of Payments in Stanford, CA, on February 5, 2020. Her speech, “The Digitalization of Payments and Currency: Some Issues for Consideration,” is available at www.federalreserve.gov/newsevents/speech/brainard20200205a.htm .
Federal Reserve Board Chair Jerome H. Powell gave his semiannual Monetary Policy Report to the Congress before the U.S. House of Representatives Committee on Financial Services in Washington, D.C., on February 11, 2020. The report is available at www.federalreserve.gov/newsevents/testimony/powell20200211a.htm . Chair Powell submitted identical remarks to the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on February 12, 2020.