Page 6 - Bulletin 05_14_20
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aRTiCLeS


        Agencies Finalize Statement                             EEOC Addresses Return to Work
        on Allowance for Credit Losses,                         for Employees with Preexisting

        Credit Risk Review Systems                              Medical Conditions
        Guidance                                                The Equal Employment Opportunity Commission has issued
                                                                additional guidance clarifying how employers should handle
        The financial regulatory agencies have issued a final interagency   employees returning to the workplace who have a preexisting
        policy statement on determining allowances for credit losses   medical condition that could place them at a higher risk for severe
        under the current expected credit loss methodology. The   illness if they contract COVID-19. The guidance clarifies that if
        statement, which takes effect at the time of each institution’s   an employee does not request a reasonable accommodation, there
        adoption of CECL, describes the CECL methodology for    is no mandate for an employer to act.
        determining allowances for credit losses applicable to financial
        assets measured at amortized costs, including loans held-for-  The guidance also states that an employer may not exclude the
        investment, net investments in leases, held-to-maturity debt   employee from returning to work solely because the employee has
        securities and certain off-balance sheet credit exposures.  a medical condition unless that condition poses a “direct threat”
                                                                to the employee’s health that cannot be eliminated or reduced by
        The agencies also finalized guidance on credit risk review systems   reasonable accommodation. The medical condition must pose
        to reflect the new CECL standard. The guidance reaffirms the   a “significant risk of substantial harm” to the employee’s health,
        elements of an effective credit risk review system, including   based on an individualized assessment, the EEOC said.
        qualifications and independence of credit risk review personnel,
        among other things. It also reiterates the importance of ensuring   Reasonable accommodations may include additional or enhanced
        that employees involved with assessing credit risk are independent   personal protective equipment, erecting physical barriers
        from the lending function.                              separating employees and the elimination or substitution of
                                                                “marginal” functions from the employee’s job duties.
        To read more visit: https://www.federalreserve.gov/newsevents/
        pressreleases/files/bcreg20200508a1.pdf                 To view the guidance visit: https://www.eeoc.gov/wysk/what-
                                                                you-should-know-about-covid-19-and-ada-rehabilitation-act-and-
        To read the guidance, visit: https://www.federalreserve.gov/  other-eeo-laws
        newsevents/pressreleases/files/bcreg20200508a2.pdf

        IRS Releases Proposed Guidance                          CFPB Compliance Aid Clarifies
        on Trust, Estate Deductions                             ECOA Notification Obligations for


        The IRS issued a proposed rule to                       PPP Loans
        address the treatment of itemized                       The CFPB has published a compliance
        deductions of non-grantor trusts and                    aid to provide additional clarity
        estates after changes made in the 2017                  regarding banks’ obligations under
        tax reform law. The guidance confirms                   the Equal Credit Opportunity Act
        that deductions made pursuant to                        regarding borrowers who have applied for a Small Business
        section 67(e), such as fees charged by                  Administration Paycheck Protection Program loan.
        banks acting as trustee or executor,                    Under ECOA, banks must notify credit applicants with an
        are not affected by the temporary suspension of miscellaneous   approval, counteroffer, denial or other adverse notice within 30
        itemized deductions imposed by the law.                 days of receiving a completed application. The CFPB clarified

        The proposed regulations also address the treatment of excess of   that PPP loan applications are only considered completed
        gross income succeeded to by a beneficiary on the termination of   applications once the creditor receives a loan number from the
        an estate or non-grantor trust.                         SBA or a response about the availability of funds.
        To read the proposal visit: https://www.federalregister.gov/  The CFPB also noted that if a creditor receives an PPP loan
        documents/2020/05/11/2020-09801/effect-of-section-67g-on-trusts-  application and refuses to grant the credit request without ever
        and-estates                                             submitting the PPP loan to the SBA, they must provide an
                                                                adverse action within 30 days after taking the adverse action.
                                                                Finally, CFPB confirmed that a creditor that has gathered
                                                                sufficient data from an applicant for a credit decision but has not





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