Capital requirements

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.

The Federal Reserve and other regulators are planning to grant a sweeping capital break for banks providing loans to small businesses as part of the government's response to the coronavirus-fueled economic crisis.

The bank will be allowed to exceed the limit to enable it to make more small business loans; the CEOs of HSBC and StanChart are also donating part of their pay to coronavirus victim charities.