The Federal Deposit Insurance Corporation (FDIC) issued a final rule on June 25 that reaffirms the enforceability of the interest rate terms of loans made by state-chartered banks and insured branches of foreign banks (collectively, state banks) following the sale, assignment, or transfer of the loan. The rule also provides that whether interest on a loan is permissible is determined at the time the loan is made, and is not affected by a change in state law, a change in the relevant commercial paper rate, or the sale, assignment, or other transfer of the loan. The final rule follows the FDIC’s proposed rule on this topic, and will take effect 30 days after publication in the Federal Register.

The Office of the Comptroller of the Currency (OCC) issued a similar final rule on May 25 that reaffirms the enforceability of the interest rate terms of national banks’ loans following their sale, assignment, or transfer. The OCC’s rule (on which we previously reported) takes effect 60 days after its June 2 publication in the Federal Register, or August 3.

The US federal financial regulatory agencies with responsibility for implementing and enforcing Section 13 of the Bank Holding Company Act, commonly known as the Volcker Rule, have finalized amendments to the “covered fund” and “foreign excluded fund” provisions of the rule. The changes will be effective October 1, 2020. Among other things, these final amendments will:

(i)  permanently exempt qualifying foreign excluded funds from being treated as “banking entities” subject to the Volcker Rule proprietary trading and covered fund investment restrictions;

(ii)  establish certain limited exceptions to the “Super 23A” prohibitions, which will allow banking entities to enter into certain types of low-risk transactions with a sponsored or advised covered fund;

The Federal Housing Finance Agency (FHFA) announced on June 17 that Fannie Mae and Freddie Mac (the GSEs) are once again extending their moratorium on foreclosures and evictions until at least August 31, 2020. We had discussed the previous extension on the moratorium, which was set to expire on June 30, in a previous blog post. The foreclosure moratorium applies to GSE-backed, single-family mortgages only.

We think of our All Things FinReg blog to be global in nature, so when interesting regulatory developments occur somewhere in our blog footprint (namely, the planet), we try to highlight them, especially where they may have relevance beyond the jurisdiction or region where such developments occur. A recent action by the French competition authority (ADC) may be one such event.

Specifically, the ADC has launched a public consultation on the fintech sector in France, in particular with regard to payment services. The consultation focuses on the two types of new players in the payments space: (1) the role of big digital platforms and (2) the effect of smaller innovative payment service providers on competition in the financial services sector.

The Federal Housing Finance Agency (FHFA) announced on May 14 that Fannie Mae and Freddie Mac (the GSEs) are extending their moratorium on foreclosures and evictions until at least June 30, 2020. We had discussed the original moratorium, which was set to expire on May 17, in a previous blog post. The foreclosure moratorium applies to GSE-backed, single-family mortgages only.

Separately, the day before, the FHFA announced a new payment deferral option for borrowers with a financial hardship that have been able to receive forbearance due to the coronavirus (COVID-19) pandemic. Specifically, such borrowers who are able to return to making their normal monthly mortgage payment will be provided the ability to repay their missed payments at the time the home is sold, refinanced, or upon loan maturity. The borrower's monthly mortgage payment will not change. Mortgages that exercise the payment deferral option will remain in GSE mortgage-backed securities (MBS), subject to the terms of the trust agreements. Mortgage servicers will begin offering the payment deferral repayment option starting July 1, 2020.

The Federal Housing Finance Agency (FHFA) announced on April 21 that servicers’ obligation to advance scheduled monthly payments for Fannie Mae and Freddie Mac (the Enterprises) backed single-family mortgage loans in forbearance will be limited to four months. After the four-month period, the Enterprises will stand ready to take over advancing payments to investors in mortgage-backed securities (MBS).

The Federal Housing Finance Agency (FHFA) and the US Department of Housing and Urban Development (HUD) announced on March 18 that they have directed Fannie Mae and Freddie Mac, the government sponsored enterprises (GSEs), to suspend foreclosures and evictions for at least 60 days due to the coronavirus (COVID-19) national emergency. The foreclosure and eviction moratorium provides relief to homeowners with a GSE-backed single-family mortgage.

A recent legal conference in Washington, DC, highlighted newly proposed and ongoing regulatory changes in California concerning consumer and commercial lending. In short, one of the conference’s messages was that lending enforcement is increasing and the California Department of Business Oversight (DBO) is becoming much more aggressive in its enforcement posture (including with respect to treating retail installment sales contracts and merchant cash-advance products as loans).

The DBO Commissioner, Manuel Alvarez, was installed last spring and is a former Consumer Financial Protection Bureau (CFPB) enforcement attorney. He has already made some noticeable changes in the DBO’s enforcement posture, and we expect to see more enforcement actions brought in the months and years to come under his leadership.

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the US Department of the Treasury’s Financial Crimes Enforcement Network, in conjunction with the Conference of State Bank Supervisors, issued a joint statement on December 3 to provide more clarity regarding Bank Secrecy Act (BSA) compliance for banks that service customers with hemp-related businesses.

In a recent post, we discussed the increasing focus by state attorneys general on the use of their enforcement authority against payment processing applications platforms that were not licensed under state money transmitter laws. As we pointed out, one of the challenges raised by these state laws is the fact that they are not uniform in either their language or how they are interpreted or applied.

In the spirit of looking at the glass-half-full aspects of these developments, it is worth pointing out that the Conference of State Bank Supervisors (CSBS) is undertaking an initiative to develop model payments legislation with the goal of increasing uniformity of state legislation in this area. The multistate licensing initiative is part of Vision 2020, a set of initiatives that CSBS and state regulators are implementing to harmonize the multistate licensing and supervisory experience for nonbank financial services providers, including fintechs. One primary area of focus for the CSBS is state money transmitter legislation. To this end, a committee of state financial institution supervisors, under the auspices of the CSBS, has developed model language for money services businesses, and recently published this model language for public comment. The model language focuses on areas such as core definitions of money transmission–related activities, money transmitter exemptions, control and changes in control of money transmission businesses, financial condition issues, and interstate parity and coordination activities.