1 1 (April 7, 2020)

handle is hein.crs/govcuyu0001 and id is 1 raw text is: 









               Researh Sevice






The CARES Act (P.L. 116-136): Provisions

Designed to Help Banks and Credit Unions



April 7, 2020
Individuals and businesses have significantly reduced economic activity in response to the coronavirus
(COVID-1 9) outbreak, potentially inflicting unanticipated losses on banks and credit unions and possibly
putting them in financial distress. Because these institutions are vital to the functioning of the economy,
the government has created safety nets to prevent them from failing and to protect depositors. To reduce
the likelihood that these safety nets need to be used, the depository regulators have implemented safety
and soundness regulations, which include rules related to banks' lending, capital, and liquidity.
Regulators also have the authority to supervise banks, which includes the periodic collection and
examination of banks financial information.
As part of Congress's response to COVID-19, the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act; P.L. 116-136) includes four sections-4011, 4012, 4013, and 4014-that temporarily relax
some of the regulations banks face. Section 4016 expands access to the Central Liquidity Facility, which
is a liquidity facility for credit unions that exists at the National Credit Union Administration (NCUA).
This Insight examines those sections. For descriptions of all sections of Title IV of the CARES Act, see
CRS Report R46301, Title IVProvisions of the CARES Act (PL. 116-136), coordinated by Andrew P.
Scott.
In addition to regulatory relief, other measures to shore up liquidity and capital reserves at financial
institutions have been put forth. The CARES Act expands the Federal Deposit Insurance Corporation's
(FDIC's) authority to guarantee bank liabilities, which is the subject of CRS Insight Ni 1307, The CARES
Act (PL. 116-136) Section 4008: FDIC Bank Debt Guarantee
Authorityhttps: /icrsreports congress.gov/iproduct/pdf/IN'TN 1 307. CRS Insight Ni 1278, Banking
Regulators 'Response to COVID-19 describes the actions taken by depository regulators under exiting
authority to address issues in the banking industry. CRS Insight N 11259, Federal Reserve: Recent
Actions in Response to COVID-19 discusses the programs the Federal Reserve has set up to provide
liquidity to financial markets.






                                                                Congressional Research Service
                                                                https://crsreports.congress.gov
                                                                                     IN11318

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