On March 27, the U.S. Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This law, which provides wide-ranging financial and regulatory relief related to the ongoing COVID-19 public health crisis, represents a response of unprecedented scope and scale. The package of approximately $2 trillion more than doubles the size of the stimulus package passed following the 2008 financial crisis.
Subtitle A of Title IV of the bill, entitled the Coronavirus Economic Stabilization Act of 2020, provides certain relief to the financial services industry, meant to stabilize financial markets, increase lending firepower and protect bank solvency during challenging financial times. These provisions generally modify existing law on a temporary basis, altering accounting, capital and supervisory practices in a manner that enhances bank operational flexibility. However, as drafted, many of these provisions are designed to terminate on the earlier of the end of the government-declared public health crisis or the end of 2020.
This client alert provides additional background and detail regarding certain of the key provisions in the Coronavirus Economic Stabilization Act of 2020 that affect financial services companies. Sidley has separately prepared a full summary of the legislation available here.
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