Going Viral: Four Key Reg. Developments Over The Weekend

April 6, 2020 at 9:52 am Leave a comment

Regulators are scrambling to keep up with the virus.  In recent days the SBA released the forms to be used when making Paycheck Protection Program loans, the Department of Labor released additional guidance on your COVID-19 related HR obligations, the Financial Crimes Enforcement Network (FinCEN) published guidance on its expectations for lenders during the outbreak and the recently finalized State Budget includes a $25 million commitment to fund the state level Community Development Financial Institutions (CDFI) program over the next five years.

To Loan or Not to Loan, That is the Question

There continue to be numerous published reports about how banks and credit unions need more guidance about the Paycheck Protection Program passed last week.  The good news is that over the weekend, forms were posted to SBA’s website.  The most basic point I want to stress to you is that by signing or submitting the “CARES Act Section 1102 Lender Agreement” posted on SBA’s website, you are committing to participating in the PPP.

On a personal note, I’m a little concerned that the industry is suffering paralysis by analysis.  These are not normal times, and if your plan is to wait for the dotting of all the Is and the crossing of all the Ts before starting to make these loans, you have effectively decided not to participate in the program.

FinCEN Issues Updated Guidance

FinCEN moved quickly to update guidance to address lender obligations related to PPP loans specifically, and lender obligations during the pandemic in general.  Most importantly, it addresses lender obligations under the CARES Act.  The FinCEN guidance informs credit unions and banks that PPP loans for existing customers will not require re-verification of existing BSA information unless otherwise indicated by the institution’s Risk Based Approach.  How’s that for decisive equivocation?  The guidance also touches on timing requirements for the filing of Currency Transaction Reports.

DOL Issues More Guidance on Employee Relief

The Department of Labor issued updated guidance on paid sick leave and expanded family leave under the quickly changing federal law.   I still do not see much relief for businesses with 50 or fewer employees that have to comply with these laws, but I will provide additional information as it becomes available.

State Budget

This year’s state budget was passed with more secrecy than a papal conclave.  But now that the puff of smoke has risen, it appears that credit unions that are CDFI certified have reason to celebrate.  According to the Governor’s press release, the budget includes $25 million over five years to support New York’s Community Development Financial Institutions Fund.  For almost two decades, New York has had this Fund in place, but has never funded it.

The budget also creates an Office of Financial Inclusion and Empowerment to meet the financial service needs of low and middle income New Yorkers.

Entry filed under: Compliance, General, HR, New York State, Regulatory. Tags: , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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