The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency finalized two rules on Tuesday that were initiated in the early days of the COVID-19 pandemic.
These include one that temporarily defers appraisal and evaluation requirements for up to 120 days after the closing of certain residential and commercial real estate transactions, the release said. This rule will expire on Dec. 31 this year.
Announced in April, this rule applies only to loans kept in a bank’s portfolio, and originally alarmed appraisers. It allows individuals and businesses to quickly access real estate equity to help address needs for liquidity as a result of COVID-19.
The second rule is one that neutralizes the regulatory capital and liquidity effects for banks that participate in certain Federal Reserve liquidity facilities, due to the lack of credit and market risk.
“The final rule neutralizes the regulatory capital and liquidity coverage ratio effects of participating in the Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility because there is no credit or market risk in association with exposures pledged to these facilities,” the release said.
“As a result, the final rule will support the flow of credit to households and businesses affected by the coronavirus,” the release said. “The effective date of this final rule is 60 days after the date of publication in the Federal Register.”