The Federal Reserve Board announced Tuesday that it will establish two “facilities” to support the flow of credit to people and businesses during the turmoil caused by the coronavirus pandemic. The Fed is establishing a Commercial Paper Funding Facility (CPFF) and a Primary Dealer Credit Facility (PDCF), both designed to ensure credit is available to Americans. The Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the CPFF from the Treasury’s Exchange Stabilization Fund. “By providing short-term credit, the CPFF will help American businesses manage their finances through this challenging period,” U.S. Treasury Secretary Steven T. Mnuchin said. “The CPFF will provide a liquidity backstop to U.S. issuers of commercial paper through a special…
The Federal Deposit Insurance Corporation announced Monday that the early retirement and separation program offered to up to 20 percent of its workforce has been suspended as part of the agency’s response to the coronavirus. The FDIC announced the buyouts earlier this month, saying the program is an effort to rebalance the workforce by growing its examination and risk-related teams. Additionally, the FDIC plans to add specialized information technology, computer science, data management and loan-review personnel. As part of the plan, the FDIC announced several field offices will be closed and consolidated with other offices. In announcing the suspension of the buyout program, the FDIC also announced: The Board of Directors meeting Tuesday will be held on a “notational basis.” Vote results and…
Federal banking agencies on Monday urged lending institutions to use the Federal Reserve Discount Window, which helps commercial banks manage short-term liquidity needs. In a statement, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency encouraged “depository institutions to use the discount window to meet demands for credit from households and businesses at this time.” The agencies said, “By providing ready access to a backup source of funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers, such as withdrawing credit during times of market stress. Thus, the discount window supports the smooth flow of credit to households and businesses.”…
Noting that “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the Federal Reserve voted Sunday to lower the benchmark interest rate to 0 percent. “The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook,” the Federal Reserve announced. “In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.” The vote comes after the Fed had just made an emergency rate cut on March 3 to 1 percent to 1.25 percent and pumped $1.5 trillion into the bond market last week. The Fed said it is “prepared to use…
A coalition of six banking regulators announced Monday that it would support financial institutions if they are impacted by the coronavirus. The statement came from the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors. “The agencies understand that many financial institutions may face current staffing and other challenges,” the agencies said in a statement. “In cases in which operational challenges persist, regulators will expedite, as appropriate, any request to provide more convenient availability of services in affected communities. The regulators also will work with affected financial institutions in scheduling examinations or inspections…
The Consumer Financial Protection Bureau announced Monday a lawsuit against Fifth Third Bank for allegedly creating fake accounts on customers’ behalf to artificially inflate sales numbers. Fifth Third officials said in a news release that it “rejects” the allegations in the lawsuit. The CFPB said that for several years Fifth Third created accounts without consumers’ knowledge. For several years, the CFPB says, Fifth Third employees created fake credit card accounts, improperly transferred money into fraudulently opened accounts, enrolled customers in unauthorized online-banking services, and activated unauthorized lines of credit on consumers’ accounts. “Fifth Third Bank respects and values the important role that the CFPB plays in protecting consumers but believes that the civil suit filed today is unnecessary and unwarranted.…
House Financial Services Committee Chairwoman Maxine Waters expressed concern about the Federal Deposit Insurance Corporation’s plan to close offices and offer buyouts to 20 percent of its workforce. “I am deeply concerned by the FDIC’s decision to massively downsize its experienced workforce and close or consolidate offices in Los Angeles and across the nation,” Waters, D-California, said. “The FDIC should be working to ensure stability in the financial system, not to destabilize the livelihoods of its employees.” Last week, the FDIC announced it is offering voluntary retirement and early separation to as many as 1,200 employees. It also said several field offices will be closed and consolidated with other offices, including those in Oklahoma, Florida, Kentucky, Tennessee and Ohio. The…
The Federal Deposit Insurance Company (FDIC) announced Thursday that it is seeking to “reshape the agency’s workforce” by offering voluntary retirement and early separation to 20 percent of its employees. That could be as many as 1,200 employees. Additionally, the FDIC said several field offices will be closed and consolidated with other offices. The buyouts are not designed to reduce the FDIC budget or the overall size of the workforce, the FDIC said in a news release. Instead, it is seeking to rebalance the workforce by growing its examination and risk-related teams, while adding specialized information technology, computer science, data management and loan-review personnel. “Today’s announcement is part of a deliberate strategy to further reduce layers of management, acquire new…
Brookings Institution Donald Kohn, a former vice chairman of the Federal Reserve, said on CNBC today that the Fed did the right thing by cutting interest rates this week. In the face of challenges posed by the coronavirus, Kohn said it is better for the Fed to be proactive – rather than waiting to react if the economy grows worse. Fed made ‘right choice’ on cutting rates, says ex-Fed vice chair from CNBC.…
CNBC provides a look at the impact the Federal Reserve’s rate cut is having on homebuilder stocks. Homebuilder stocks jump on news of a rate cut from CNBC.…
