Sens. Sherrod Brown and Elizabeth Warren are asking three federal agencies to reverse changes that allow banks to exclude certain items from their supplementary leverage ratio.
The senior official said the Federal Reserve’s gauge of a firm’s performance under economic recovery scenarios will affect decisions about its capital distribution, but individual results of the analysis will not be made public.
The SBA issues guidance on Paycheck Protection Program loan forgiveness; after staffing up for PPP, Bank of America may need to delay investments to meet cost targets; American Express has leaned hard on cloud tech to help employees work at home during the pandemic.
COO says bank is on track to meet growth targets but expects more consumer lending losses; the mortgage agencies’ ability to raise $240 billion in capital before going private won’t be easy.
The FHFA says the two government-sponsored enterprises need at least $240 billion of capital before they can go private; Transunion says more than 3% of consumer loans it tracks are in financial hardship.
The much-anticipated proposal, which would not go into effect until after Fannie Mae and Freddie Mac are privatized, reflects Director Mark Calabria’s aggressive efforts to get the companies on a strong financial footing.
Director Mark Calabria, who abandoned the Fannie and Freddie capital proposal written by his predecessor, said he expects a revised framework to be ready “very soon.”
The interim rule will allow institutions with over $250 billion of assets to exclude certain assets from the supplementary leverage ratio to help them respond to the economic fallout from the coronavirus pandemic.
In separate letters to Congress, the Fed asked for legislative action to ease Tier 1 capital minimums while the FDIC said it may use its own authority to address the market strain on banks.
The Financial Stability Board said it stood ready to coordinate additional help on capital requirements, upcoming regulatory deadlines and other standards.
