The Golden Apple – April 17, 2020

April 17, 2020January 22, 2021 industrialbank

White House unveils guidelines for easing limits on activities
Yesterday President Donald Trump announced “Guidelines for Opening Up America Again,” which sets criteria for individual states and localities to make decisions about whether and how to reopen businesses and allow public activities. The White House’s “30 Days to Slow the Spread” initiative ended this week, and President Trump stresses the need to “reopen the economy” at daily briefings on the national response to COVID-19.

President Trump said it would be up to governors and local authorities to determine whether they meet the criteria for beginning the three-phase process to returning to normal activity levels. Those criteria call for 1) downward trajectories of influenza-like illnesses and COVID-like syndromic cases reported within a 14-day period; 2) downward trajectories of documented cases over a 14-day period, or downward trajectories of positive tests as a percentage of overall testing over 14 days; and 3) the ability of hospitals to treat all patients without crisis care and a “robust testing program” in place for healthcare workers, including antibody testing. The guidelines set no nationwide minimum standards for acceptable infection rates or testing levels, and President Trump emphasized that states will be responsible for developing and conducting testing programs.

Once a state meets these criteria, it may begin Phase One, in which:
Vulnerable individuals continue to shelter in place
Healthy people continue to maximize social distance in public, with no social gatherings of more than 10 peopleNon-essential travel remains minimal
Employers continue to encourage telework, and bring employees back to work in phasesWorkplaces close common areas and enforce social distancing protocolsWorkplaces “strongly consider” special accommodation for employees who are part of vulnerable populations
Schools and daycare centers that have closed remain closedSenior living facilities and hospitals are closed to visitors
Large venues, such as movie theaters and sports arenas, can operate under strict distancing protocolsElective surgeries can resume
Gyms can reopen if they comply with strict distancing and sanitation protocols
Bars remain closed
After 14 days in Phase One, if the state or area continues to meet the criteria for reopening, it may continue to Phase Two, in which:
Vulnerable individuals continue to shelter in place
Healthy people continue to maximize social distance in public, but social gatherings of up to 50 people will be allowedNon-essential travel resumes
Employers continue to encourage telework
Workplaces keep common areas closed
Workplaces continue to “strongly consider” special accommodation for employees who are part of vulnerable populations
Schools, daycare centers, and camps may reopenSenior living facilities and hospitals remain closed to visitors
Large venues, such as movie theaters and sports arenas, can operate under moderate distancing protocolsElective surgeries may resume on an outpatient and inpatient basiBars may reopen with diminished standing-room occupancy
If the state or area continues to meet the criteria after 14 days in Phase Two, it may move to Phase Three, in which:
Vulnerable people can resume social activities, practicing physical distancingLow-risk populations should consider avoiding crowds
Workplaces can reopen without restriction
Visits to senior living facilities and hospitals can resume, with diligent hygiene practices
Large venues can operate under limited distancing protocols
Bars may operate with increased standing-room occupancy
President Trump said yesterday that as many as 29 states may be eligible or close to eligible to start Phase One, but did not specify which states. The Centers for Disease Control report a sharp drop-off in reported new cases nationwide over the past two weeks, while cautioning that this may not capture illnesses that have begun during that period.

The independent Institute for Health Metrics and Evaluation (IHME) projects that the nation’s COVID-19 outbreak reached peak healthcare resource demand on April 10, although several individual states’ outbreaks have yet to peak. Florida, for example, is projected to peak on May 3, while Virginia is expected to peak on April 27. IHME’s projections are based on the assumption that full social distancing guidelines will apply through May. The District of Columbia announced this week that its social distancing restrictions will apply until at least May 15, and Virginia’s distancing requirements extend to June 10.
Fed opens Paycheck Protection Program facility as PPP runs out of funds
Yesterday the Federal Reserve Board announced that its Paycheck Protection Program (PPP) Liquidity Facility was up and running to provide funds for banks to make grants and loans under the new program, while the Small Business Administration announced that it can no longer accept applications for loans or grants under the PPP or the Economic Injury Disaster Loan (EIDL) program, because appropriated funds have been exhausted.

Pelosi calls for “data, data, data” before additional funding for PPP
Negotiations between the Treasury and the Speaker of the House for an infusion of $250 billion into the Paycheck Protection Program failed to produce a deal this week. At her weekly press conference yesterday, Speaker of the House Nancy Pelosi said, “Democrats are listening to the millions crying out for assistance,” but they want “data, data, data” to see how the PPP is working, and for whom. “There is a need for more,” she said, but they want to be sure that the program is not exacerbating existing disparities in access to credit. They also want additional resources for hospitals and first responders. She said that she and Senate Minority Leader Chuck Schumer (D-NY) are “having a discussion” with Treasury Secretary Steven Mnuchin about how to proceed.

Brown, Waters seek liquidity for mortgage servicers
Senator Sherrod Brown (D-OH), ranking member of the Senate Banking Committee, and Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, wrote to Federal Reserve Board Chairman Jerome Powell and Secretary of the Treasury Steven Mnuchin this week to ask the Financial Stability Oversight Council (FSOC) to address the emergency liquidity needs of mortgage servicers. “The government must be prepared to respond quickly to prevent a liquidity shortfall in the single-family and multifamily mortgage markets,” they wrote. “We urge you to use your existing authorities to ensure that the housing market, including nonbank servicers, have sufficient liquidity to stabilize the housing market.”

CFPB, FHFA create Borrower Protection Program
The Consumer Financial Protection Bureau (CFPB) and Federal Housing Finance Agency (FHFA) have created a platform to share information about mortgage servicing in order to protect borrowers during the COVID-19 outbreak. Under the new Borrower Protection Program, the CFPB will share complaint information and analytical tools with the FHFA, while the FHFA will share information about forbearances, modifications, and other loss mitigation options offered by Fannie Mae and Freddie Mac. CFPB Director Kathy Kraninger said the information would make it easier for the CFPB to respond to consumer complaints, work with lenders, and improve its policies. FHFA Director Mark Calabria said the program will help borrowers get accurate information about their forbearance options.

CFPB raises HMDA data reporting thresholds
The Consumer Financial Protection Bureau issued a final rule this week to amend Regulation C, implementing the Home Mortgage Disclosure Act (HMDA). The new rule raises the permanent threshold for collecting and reporting data about closed-end mortgage loans from 25 loans to 100, effective July 1. On January 1, 2022, the current temporary threshold for collecting and reporting data on open-end loans, 500 loans, will expire, and the permanent threshold will rise from 100 loans to 200. “The Bureau anticipates that this final rule, once effective, will reduce regulatory burden on smaller institutions to help those institutions to focus on responding to consumers in need,” the agency’s statement said.

Federal banking agencies will defer real estate appraisals up to 120 days
The Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and CFPB announced this week that they will temporarily defer real estate appraisal and evaluation requirements for up to 120 days so that institutions can continue to lend to creditworthy borrowers during the COVID-19 outbreak. The interim rule will remain in effect until December 31. The agencies also issued guidance that provides greater flexibility for physical property inspections and for appraisals on properties underwritten to meet Fannie Mae and Freddie Mac standards.

CFPB exempts federal pandemic payments to prepaid cards from Reg E requirements
The Consumer Financial Protection Bureau issued an interpretative rule on Monday to clarify that the federal government’s direct pandemic relief payments to consumers through prepaid accounts are not “government payments” for purposes of Regulation E and the Electronic Fund Transfer Act. The Bureau said that similar direct payments from state and local government would be exempt as well, as long as they are made to offer COVID-19 related relief; are not part of an already-established government program; are made on a one-time or limited basis; and are distributed without a requirement that consumers apply to an agency to receive the funds.

CFPB relaxes guidance on remittance transfers
Last Friday, the CFPB announced that it will take a “flexible approach to the Bureau’s supervision and enforcement on remittance transfers.” The Bureau proposed changes to its Remittance Rule in December 2019, and expects to publish a final rule next month. It will implement requirements that money transfer agents provide exact costs of a transfer to consumers sending the remittances; insured institutions are currently operating under a temporary exception that allows them to estimate exchange rates and certain third-party fees. That exception is scheduled to expire on July 21, but the Bureau expects that some institutions may find it difficult to disclose actual costs after that date. Therefore, it will not enforce the “actual costs” requirement for these institutions until January 1, 2021.
FDIC postponing consideration of signage requirements The Federal Deposit Insurance Corporation (FDIC) announced this week that it is temporarily delaying its plans to revise its signage and advertising requirements for insured institutions. The agency had published a request for comment on the topic in February, and that request remains open for comment until April 20; the FDIC says it “remains committed to modernizing these rules at a future date.” Confirmations, Nominations, Departures, etc.The Securities and Exchange Commission (SEC) announced that Natasha Guinan will be Chief Counsel of the Office of the Chief Accountant (OCA).

Next Week in WashingtonThe House and Senate remain in recess until May 4.
The Ellis InsightJim Ellis reports on political news
President
Rep. Justin Amash:  Michigan Independent Rep. Justin Amash (I-Cascade Township/Grand Rapids) again made a public statement confirming that he is considering entering the 2020 presidential race either as the Libertarian Party nominee or as an Independent. Mr. Amash tweeted yesterday that “Americans who believe in limited government deserve another option.” He went onto say that he is “closely” looking whether to begin a national campaign during this week.

Former President Barack Obama:  Former President Barack Obama has now officially endorsed his former Vice President for the party nomination and, of course, in the general election against President Trump. The move is unsurprising at this point as Mr. Biden has all but locked up the nomination since all of his major opponents have dropped out of the race.The Obama endorsement, viewed as a typical move for all ex-Presidents to endorse the nominee of his party, largely becomes a non-event. It would have mattered greatly to Mr. Biden early in the process, however, when he could have used the support from Mr. Obama to put distance between himself and his many intra-party opponents.

Sen. Bernie Sanders:  Sen. Bernie Sanders (I-VT), late this week in a joint video address with Joe Biden, officially endorsed the former Vice President as the 2020 Democratic presidential nominee. In his statement, Sen. Sanders said, “I am asking all Americans, I’m asking every Democrat, I’m asking every independent, I’m asking a lot of Republicans, to come together in this campaign to support your (Mr. Biden’s) candidacy, which I endorse.”

Arizona:  OH Predictive Insights, a Phoenix-based survey research firm that often polls the Grand Canyon State electorate, finds former Vice President Joe Biden opening up a large lead over President Trump in what could be a determinative state, nationally. According to the OH data (4/7-8; 600 AZ likely general election voters), Mr. Biden holds a nine-point, 52-43%, advantage. Arizona is critical to President Trump’s prospects because it is one of five states that voted for him in 2016 that he must keep in his 2020 coalition in order to be positioned favorably in the remaining swing states.

North Carolina:  Harper Polling conducted a statewide North Carolina survey (4/5-7; 500 NC likely general election voters) and posts President Trump to a substantial 49-42% advantage over former Vice President Joe Biden. The spread is significant because Mr. Trump under-polled here four years ago.The final three 2016 North Carolina surveys, from three different pollsters, found Hillary Clinton holding a combined 1.3 percentage point average advantage, but Mr. Trump won on election day with almost a four-point spread. Therefore, the President holding a seven-point lead at a time when his national polling was on a downward slide suggests that he has strength in what is one of his coalition’s most critically important swing states.

Wisconsin:  The Democratic polling firm Garin-Hart-Yang Research Group (4/6-8; 301 WI likely general election voters) finds a virtual tie between Mr. Biden and President Trump in another nationally significant state. Though this poll is based upon a small sample of only 301 respondents, it does forecast a close contest in a state projected to be tight. Therefore, the numbers do appear realistic. The results find Mr. Biden leading President Trump, 48-47%. In 2016, Mr. Trump carried the state over Hillary Clinton with a 47.2 – 46.5% margin.

Senate
Arizona:  Phoenix-based OH Predictive Insights, that earlier released their presidential ballot test (4/7-8; 600 AZ likely general election voters) finding former Vice President Joe Biden leading President Trump 52-43%, not surprisingly forecasts Senate candidate Mark Kelly (D) to be holding a substantial advantage over appointed Sen. Martha McSally (R). As with the presidential race, the spread is nine points, or 51-42% in this case. Other polling trends have also found Mr. Kelly, a retired astronaut, to be holding a lead but with a lesser margin.

Kansas:  Confirming Democratic political spin that their nominee has a chance to win the open Kansas Senate race if former Secretary of State and defeated 2019 gubernatorial nominee Kris Kobach wins the 2020 Republican nomination, a just released Public Policy Polling survey (4/13-14; 1,271 KS registered voters via automated response device) finds state Sen. Barbara Bollier (D-Mission Hills) taking a small two point lead over Mr. Kobach, 44-42%.PPP, however, did not test either of the other Senate GOP candidates against Ms. Bollier, US Rep. Roger Marshall (R-Great Bend) or state Senate President Susan Wagle (R-Wichita). It is believed they would both run a stronger general election campaign.

Massachusetts:  Last week we reported that Sen. Ed Markey (D) had fallen behind in obtaining the 10,000 ballot petition signatures to qualify for the September 1st primary ballot. Others around the state are apparently finding themselves in a similar situation especially since the required number of petition signatures to access the ballot is unusually large. A new bill in the legislature would halve the requirement in response to the COVID-19 situation that keeps ground operation petition gathering signature efforts sidelined. It is likely that the bill will pass.

North Carolina:  On Wednesday, the Republican firm Harper Polling released their North Carolina survey (4/5-7; 500 NC likely general election voters) that gave first term Sen. Thom Tillis (R) a 38-34% edge over former state Sen. Cal Cunningham (D). A day later, Public Policy Polling, a Democratic pollster, released very different numbers. In their survey (4/14-15; 1,318 NC registered voters via interactive voice response system and text), PPP finds Mr. Cunningham holding a seven-point lead over Sen. Tillis, 47-40%.

Oklahoma:  The Oklahoma candidate filing deadline passed on April 10th, and Sen. Jim Inhofe (R) has drawn three Republican and four Democratic opponents, but none seem to be top-tier candidates. For the Democrats, the likely nominee appears to be former television reporter Abby Broyles, but Sen. Inhofe remains a heavy favorite to win re-election again in November.

House
GA-6:  North Star Opinion Research just released a poll they completed during mid-March (3/15-17; GA-6 registered voters via live interviews) that found former US Rep. Karen Handel (R) developing a small lead over freshman Rep. Lucy McBath (D-Marietta). The Congresswoman, who unseated Ms. Handel in 2018, trails her former opponent by a slim two-point margin, 49-47%, while the generic vote question split evenly between the two sides with each party being the choice of 46% of the sample respondents. Perhaps the most significant finding for Ms. Handel was her 50-42% margin among self-identified Independents. This race should be considered a toss-up.

MT-AL:  It is clear that former state Representative and 2018 at-large congressional nominee Kathleen Williams is primed to again become her party’s statewide candidate. Ms. Williams announced that she will report $486,000 raised for the 1st quarter 2020, with $1.1 million cash-on-hand. Her Democratic primary opponent, state Rep. Tom Winter (D-Missoula), raised only $74,000 and has just $88,000 in his campaign account.The winner will face a strong open seat Republican candidate in the general election, most likely State Auditor and 2018 US Senate nominee Matt Rosendale (R). Incumbent Rep. Greg Gianforte (R-Bozeman) is running for Governor.

NJ-2:  Mental health advocate Amy Kennedy, wife of former US Rep. Patrick Kennedy (D-RI), may not have as much institutional New Jersey Democratic Party support in her race to eventually face party-switching GOP incumbent Jeff Van Drew (R-Dennis Township/Cape May), but she will have more early campaign resources. In announcing fundraising numbers just before the campaign disclosure deadline, Ms. Kennedy will report raising $566,000, of which $250,000 was self-contributed, as compared to college professor Brigid Callahan Harrison’s $213,000 raised, of which $101,000 was self-contributed.

Governor/States
Maryland: Gov. Larry Hogan (R), who first moved Maryland’s April 28th primary to June 2nd as a Coronavirus precaution, signed legislation to send all voters an absentee ballot and limit the number of in-person polling places for the upcoming intra-party contests.

New Hampshire: If the Coronavirus is still a major threat before the state’s September 8th primary, Secretary of State Bill Gardner (D) and legislative leaders agreed that they will suspend the absentee ballot requirement that a voter have an excuse for not voting in person.

North Carolina: The aforementioned Harper Polling North Carolina survey (4/5-7; 500 NC likely general election voters) also included testing the state’s 2020 gubernatorial race, as did the data coming from Public Policy Polling (4/14-15; 1,318 NC registered voters via interactive voice response system and text). The Harper gubernatorial ballot test yields a 50-33% margin in Gov. Roy Cooper’s favor over Lt. Gov. Dan Forest, who won the Republican nomination on March 3rd. PPP found an almost identical 50-36% spread.

These combined numbers confirm that Gov. Cooper is a strong early favorite for re-election in a state famous for hosting very close political contests.

South Carolina: The state legislature convened for one day at the end of last week to consider legislation to consider the State Election Commission recommendations that the excuse provision for obtaining an absentee ballot be waived for the June 9th primary and subsequent June 23rd runoff elections. The state Senate, however, recessed without passing the bill. Therefore, at this point, the South Carolina primary will be conducted with no procedural changes.

Utah: News stories broke in late March that former Gov. Jon Huntsman’s campaign submitted invalid petition signatures to the degree that more than one-third of the total were rejected, putting his campaign in a major hole since the qualification deadline was fast approaching. Utah has a high petition signature requirement of 28,000, and Huntsman’s campaign was scrambling when finding they were more than 11,000 names short of the bare minimum with time elapsing and the state shut down due to Coronavirus precautions.

Late this week, Utah state election officials confirmed that the former Governor had submitted enough verified legal signatures to attain a primary ballot listing regardless of what happens at the April 25th virtual Utah Republican nominating convention.

It is likely, however, that Mr. Huntsman and Lt. Gov. Spencer Cox will advance to the June 23rd Republican primary from the convention. While early polling favored Mr. Huntsman, recent data suggests that Mr. Cox has assumed the lead. Former state House Speaker Greg Hughes and businessman Jeff Burningham may also be on the ballot, but they will likely have to qualify only through the signature route as opposed to obtaining at least 40% support at the virtual state convention.