Supervisory and Regulatory Actions in Response to COVID-19

One of the principal functions of the Federal Reserve is to supervise and regulate various financial entities. In response to the events related to COVID-19 or the coronavirus, the Federal Reserve Board's Supervision and Regulation function has issued the following statements, guidance, and rules to support financial institutions and the economy.

Supervisory Actions

  • Resolution Plans: The Federal Deposit Insurance Corporation and the Federal Reserve Board announced two extensions to upcoming resolution plan deadlines. (May 6, 2020)
    Press release

  • Mergers and Acquisitions: Federal Reserve Board announces the public comment period has been extended through June 4, 2020, for the notice by Morgan Stanley of New York, New York, to acquire E*TRADE Financial Corporation of Arlington, Virginia (April 30, 2020)
    Press release

  • Resolution Plans: Agencies extend comment period on updates to resolution plan guidance for large foreign banks. (April 27, 2020)
    Press release

  • Small Business Lending: Due to the extraordinary disruptions from the coronavirus, the Federal Reserve Board on Wednesday announced that it will temporarily and narrowly modify the growth restriction on Wells Fargo so that it can provide additional support to small businesses. The change will only allow the firm to make additional small business loans as part of the Paycheck Protection Program, or PPP, and the Federal Reserve's forthcoming Main Street Lending Program. (April 8, 2020)
    Press release

  • Work with borrowers: The federal financial institution regulatory agencies, in consultation with state financial regulators, issued a revised interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications. The revised statement also provides the agencies' views on consumer protection considerations. (April 7, 2020)
    Press release

  • CARES Act: The Federal Reserve is issuing this letter to inform supervised financial institutions about several forms of relief available to small businesses affected by COVID-19 as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. (April 6, 2020)
    SR Letter

  • Mortgage servicers: The federal financial institution regulatory agencies and the state financial regulators issued a joint policy statement providing needed regulatory flexibility to enable mortgage servicers to work with struggling consumers affected by the Coronavirus Disease (referred to as COVID-19) emergency. (April 3, 2020)
    Press release

  • Capital: To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations' ability to provide credit to households and businesses, the Federal Reserve Board announced a temporary change to its supplementary leverage ratio rule. (April 1, 2020)
    Press release

  • Essential workers: The Federal Reserve issued a letter to inform supervised financial institutions and their service providers that the Cybersecurity and Infrastructure Security Agency (CISA) of the Department of Homeland Security has identified essential critical infrastructure workers in the financial services sector. (March 27, 2020)
    SR 20-6 letter

  • Regulatory reporting relief: The Federal Reserve will not take action against a financial institution with $5 billion or less in total assets for submitting its March 31, 2020, Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) or Financial Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding Companies (FR Y-11) after the official filing deadline, as long as the applicable report is submitted within 30 days of the official filing due date. (March 26, 2020)
    Press release

  • Small-dollar loans: Five federal financial regulatory agencies today issued a joint statement encouraging banks, savings associations and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19. (March 26, 2020)
    Press release
    SR 20-7 letter

  • Supervisory approach: The Federal Reserve Board provided additional information to financial institutions on how its supervisory approach is adjusting in light of the coronavirus. (March 24, 2020)
    Press release

  • Work with borrowers: The federal financial institution regulatory agencies and the state banking regulators issued an interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications. (March 22, 2020)
    Press release

  • Capital and liquidity: The federal banking agencies issued a statement on the use of capital and liquidity buffers. This follows on a March 15 Board statement: "The agencies support banking organizations that choose to use their capital and liquidity buffers to lend and undertake other supportive actions in a safe and sound manner. The agencies expect banking organizations to continue to manage their capital actions and liquidity risk prudently." (March 17, 2020)
    Statement (PDF)

  • Discount window: Federal banking agencies released an interagency statement encouraging banks to use the Federal Reserve's discount window. (March 16, 2020)
    Press release

  • Capital and liquidity: The Federal Reserve encouraged banks to use their capital and liquidity buffers as they lend to households and businesses who are affected by the coronavirus and for banks to use their capital and liquidity buffers to lend and undertake supportive actions in a safe and sound manner. (March 15, 2020)
    Press release

  • Intraday credit: The Federal Reserve issued a statement encouraging depository institutions to utilize intraday credit extended by Reserve Banks, on both a collateralized and uncollateralized basis. (March 15, 2020)
    Press release

  • Work with borrowers: The Federal Reserve Board issued guidance on supervisory practices regarding financial institutions affected by coronavirus. This guidance encourages financial institutions to review guidance previously issued in 2013 with respect to major disasters or emergencies. The 2013 guidance discusses supervisory practices that the Federal Reserve System will employ when financial institutions and their customers are affected by coronavirus and provides examples of efforts that financial institutions may want to consider in working with affected customers. (March 13, 2020)
    SR 20-4 / CA 20-3 letter

Regulatory Actions

  • Liquidity: To support the flow of credit to households and businesses, the federal bank regulatory agencies today announced an interim final rule that modifies the agencies' Liquidity Coverage Ratio (LCR) rule to support banking organizations' participation in the Federal Reserve's Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility. (May 5, 2020)
    Press release

  • Reserve requirements: The Federal Reserve Board on Friday announced an interim final rule to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the "savings deposit" definition. (April 24)
    Press release

  • Appraisals: The federal banking agencies issue an interim final rule to temporarily defer real estate-related appraisals and evaluations under the agencies' interagency appraisal regulations. (April 14, 2020)
    Press Release

  • Small Business Lending: The federal bank regulatory agencies today announced an interim final rule to encourage lending to small businesses through the Small Business Administration's Paycheck Protection Program, or PPP. (April 9, 2020)
    Press Release

  • CARES Act, Capital: The federal bank regulatory agencies today announced the issuance of two interim final rules to provide temporary relief to community banking organizations. The agencies are acting to implement Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act, which requires the agencies to temporarily lower the community bank leverage ratio to 8 percent. (April 6, 2020)
    Press Release

  • Volcker Rule: Five federal financial regulatory agencies on Thursday announced that they will consider comments submitted before May 1, 2020, on their proposal to modify the Volcker rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as "covered funds." (April 2, 2020)
    Press Release

  • CECL and CARES Act: The Federal Reserve Board and the other federal banking agencies issued a joint statement to clarify the interaction between the Revised Transition of the Current Expected Credit Losses Methodology for Allowances interim final rule (CECL IFR)1 and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)2 for purposes of regulatory capital requirements. (March 31, 2020)
    SR 20-9 letter

  • Control framework: The Federal Reserve Board announced that it will delay by six months the effective date for its revised control framework. The delay will reduce operational burden and allow institutions to focus on current economic conditions. (March 31, 2020)
    Press release

  • Capital and credit risk: The federal bank regulatory agencies today announced two actions to support the U.S. economy and allow banking organizations to continue lending to households and businesses:
    • Allowing early adoption of a new methodology on how certain banking organizations are required to measure counterparty credit risk derivatives contracts; and
    • Providing an optional extension of the regulatory capital transition for the new credit loss accounting standard (March 27, 2020)
    Press release

  • Work with borrowers: The Federal Reserve Board announced a technical change to support the U.S. economy and allow banks to continue lending to creditworthy households and businesses.

    The interim final rule will phase in gradually, as intended, the automatic restrictions associated with a firm's "total loss absorbing capacity," or TLAC, buffer requirements, if the levels decline. TLAC is an additional cushion of capital and long-term debt that could be used to recapitalize a bank if it is in distress. The change will facilitate the use of firms' buffers to promote lending activity to households and businesses. (March 23, 2020)
    Press release

  • Liquidity: To support the flow of credit to households and businesses, the federal bank regulatory agencies announced an interim final rule to ensure that financial institutions will be able to effectively use a liquidity facility recently launched by the Federal Reserve Board.

    The Board launched the Money Market Mutual Fund Liquidity Facility, or MMLF, to enhance the liquidity and functioning of money markets and to support the economy. The interim final rule modifies the agencies' capital rules so that financial institutions receive credit for the low risk of their MMLF activities, reflecting the fact that institutions would be taking no credit or market risk in association with such activities. The change only applies to activities with the MMLF. (March 19, 2020)
    Press release

  • Capital: The federal banking agencies adopted an interim final rule, effective upon publication in the Federal Register, that revises the definition of eligible retained income. Under the U.S. capital rule, if a banking organization's capital ratios fall within its buffer requirements, the maximum amount of capital distributions and discretionary bonus payments it can make is a function of its eligible retained income. The revised definition of eligible retained income will make any automatic limitations on capital distributions that could apply under the agencies' capital rules more gradual. (March 17, 2020)
    Press release

Consumer-Related Actions

  • HMDA Reporting: The Federal Reserve announced that it does not intend to cite in an examination or initiate an enforcement action for failure to report the quarterly Home Mortgage Disclosure Act (HMDA) data to provide its supervised financial institutions with flexibility, reduce administrative burden, and allow the institution to focus its time and attention on serving its customers. (March 31, 2020)
    CA 20-6 letter

  • CRA Consideration for Activities: The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a joint statement on Community Reinvestment Act (CRA) consideration for activities in response to the COVID-19. (March 19, 2020)
    CA 20-4 letter

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Last Update: May 11, 2020