Updates on NCUA, CFPB, FHFA, Fed Facilities, LIBOR, and CA

Team working together

Kyle Hauptman was confirmed by the Senate this week for a seat on the National Credit Union Administration (NCUA) Board. Once he is sworn in, Hauptman will serve a term through August 2025.

The California and Nevada Credit Union Leagues want to congratulate Hauptman and look forward to engaging with him on credit union priorities. Additionally, a letter from the Credit Union National Association (CUNA) has also been sent to him on these priorities.

Hauptman is economic advisor to Sen. Tom Cotton (R-AR). In his testimony before the Senate Banking Committee in July, he said his goal at NCUA will be to help credit unions offer the American dream to as many people as possible. President Donald Trump announced the nomination of Hauptman on June 15. Hauptman replaces NCUA Board Member J. Mark McWatters, whose term officially expired in August 2019.

CFPB Announces Additions to Executive Team
The Consumer Financial Protection Bureau (CFPB) has announced additions to its executive team:

  • Matthew Bettenhausen — Senior Advisor and Counselor to the Director.
  • Chris Chilbert — Chief Information Officer in the Bureau’s Operations Division.
  • Janis Pappalardo — Associate Director for Research, Markets and Regulations.
  • Donna Roy — Chief Operating Officer.
  • Deborah Royster — Assistant Director at the Office for Older Americans.

FHFA Extends Foreclosure and REO Eviction Moratoriums
The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac (Government Sponsored Enterprises or GSEs) will extend the moratoriums on single-family foreclosures and real-estate owned (REO) evictions until at least Jan. 31, 2021.
 
The foreclosure moratorium applies to GSE-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by a GSE through foreclosure or deed-in-lieu of foreclosure transactions. The current moratoriums were set to expire on Dec. 31.

Fed Extends Four Lending Facilities Through March 31
The Federal Reserve Board has extended four of its lending facilities through March 31, 2021.

The extension applies to the Commercial Paper Funding Facility (CPFF), the Money Market Mutual Fund Liquidity Facility (MMLF), the Primary Dealer Credit Facility (PDCF), and the Paycheck Protection Program Liquidity Facility (PPPLF) that were all scheduled to expire on or around Dec. 31, 2020. Further details on each facility can be found here.

By backstopping critical short-term funding markets, these facilities are supporting market functioning and enhancing the flow of credit to the economy. The extension, which has also been approved by the Treasury Department, will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available through the first quarter of 2021 to help the economy recover from the COVID-19 pandemic.

Agencies Issue Statement on LIBOR Transition
The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency issued a joint statement encouraging banks to cease using the U.S. Dollar (USD) LIBOR on new transactions by Dec. 31, 2021 in order to facilitate an orderly—and safe and sound—LIBOR transition.

The agencies said that new contracts entered into before December 31, 2021 should either utilize a reference rate other than LIBOR or have robust fallback language that includes a clearly defined alternative reference rate after LIBOR’s discontinuation.

The regulators further indicated that if the administrator of LIBOR extends the publication of USD LIBOR beyond Dec. 31, 2021, the agencies recognize that there may be limited circumstances when it would be appropriate for a bank to enter into new USD LIBOR contracts after Dec. 31, 2021.

Also, on Nov. 30, the LIBOR's administrator, ICE Benchmark Administration Limited (IBA) issued a proposed plan to meet in early December to discuss its intentions to cease the publication of the USD LIBOR after Dec. 31, 2021. Under the IBA’s proposal, publication of the one week and two-month USD LIBOR settings would end immediately after Dec. 31, 2021; and the remaining USD LIBOR settings would end immediately after June 30, 2023. The three agencies said in their statement that the June 30, 2023 date for which IBA is consulting would allow time for "legacy contracts"—USD LIBOR transactions executed before Jan.1, 2022—to mature.

CA Governor Issues ‘Stay at Home’ Orders Aligned with Hospital Capacity
California Governor Gavin Newsom outlined a “stay at home” COVID-19 public health order for five designated regions across the state when their hospital capacity declines to a level that overwhelms intensive care units (ICUs). The order affects regions having less than 15 percent of ICU capacity remaining. While none of the five regions currently meet this criteria, some are expected to approach it by week’s end.

Regions will need to comply with restrictions for three weeks. Residents would be immediately mandated to remain in their homes unless they are conducting “essential activities.” The order would end business operations for nearly all indoor and outdoor retail, food, accommodation, leisure, hospitality, amusement, tourism, and gaming activities (with some small caveats and modifications). To be released from the order, a region must have a projected ICU capacity above or equal to 15 percent for three weeks after the order starts. The California Health and Human Services Agency is assessing each region on a weekly basis. Visit the “California For All” COVID-19 resource webpage for updates and information.

We wanted to alert you of this announcement as you continue serving your credit union’s members across the state. The League will continue keeping you notified of pertinent information going forward.

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