Updates: NCUA Board, SBA’s PPP, FFIEC Statement, and More

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This week, the Senate Banking Committee agreed by a voice vote to advance the nomination of Kyle Hauptman to join the National Credit Union Administration (NCUA) Board. Hauptman is currently a legislative staffer to Sen. Tom Cotton (R-AR).

In his hearing two weeks ago, Hauptman quoted his work with the Cornerstone Credit Union League, noting that almost all of Arkansas-based credit unions are federally chartered. Today, Ranking Member Sherrod Brown (D-OH) noted concerns over Hauptman’s lack of experience in regard to credit unions and banking, based on the minimal information provided during the confirmation hearings.

Hauptman’s nomination will now proceed to the Senate floor for consideration. The Senate has been moving on nominations in between negotiations over the next stimulus bill. It is likely this nomination could be moved on before September, depending on the schedule.

NCUA: Annual Voluntary CU Diversity Self-Assessment
Credit unions have the opportunity to take the NCUA’s Annual Voluntary Credit Union Diversity Self-Assessment if they so choose.

The assessment is a tool for building diversity and inclusion; is voluntary; is simple and brief; has no effect on CAMEL and risk ratings, or how your credit union is supervised; and is available year-round.

SBA’s New FAQS on PPP Loan Forgiveness Released
On Aug. 4, the U.S. Small Business Administration (SBA) released a new set of FAQs on forgiveness for Paycheck Protection Program (PPP) loans. The new FAQs provide guidance for PPP lenders and borrowers and provide examples of situations that could impact the forgivable amount of the loan. The FAQs include sections on general loan forgiveness, loan forgiveness payroll costs, loan forgiveness nonpayroll costs, and loan forgiveness reductions.

In addition, SBA released updated figures on PPP loan approvals through July 31, 2020.  There is approximately $128 billion of funds remaining in the program, which is set to expire Aug. 8.

FFIEC: Additional Loan Accommodations Related to COVID-19
The Federal Financial Institutions Examination Council has issued a statement setting forth prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers as initial coronavirus-related loan accommodation periods come to an end and they consider additional accommodations.

The COVID event has had a significant adverse impact on consumers, businesses, financial institutions, and the economy. To address some of these impacts, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides several forms of relief to business and individual borrowers, and some states and localities have taken action to provide similar credit accommodations. Also, many financial institutions have voluntarily offered other credit accommodations to their borrowers.

As initial loan accommodation periods come to an end, some borrowers may be able to resume contractual payments, and others may be unable to meet their obligations due to continuing financial challenges. The agencies encourage financial institutions to consider, when appropriate, prudent options for additional accommodations that can ease cash flow pressures on affected borrowers, improve their capacity to service debt, and facilitate the financial institution’s prudent management of its loans, consistent with applicable laws and regulations.

FinCEN FAQs: Customer Due Diligence (CDD) Requirements for Covered FIs
The Financial Crimes Enforcement Network, in consultation with the federal functional regulators, is issuing responses to three frequently asked questions (FAQs) regarding customer due diligence requirements for covered financial institutions. These FAQs clarify the regulatory requirements related to obtaining customer information, establishing a customer risk profile, and performing ongoing monitoring of the customer relationship in order to assist covered financial institutions with their compliance obligations in these areas.

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