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Minutes of the Financial Stability Oversight Council
March 26, 2020
PRESENT:
Steven T. Mnuchin, Secretary of the Treasury and Chairperson of the Financial Stability
Oversight Council (Council)
Jerome H. Powell, Chairman, Board of Governors of the Federal Reserve System (Federal
Reserve)
Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation (FDIC)
Jay Clayton, Chairman, Securities and Exchange Commission (SEC)
Heath P. Tarbert, Chairman, Commodity Futures Trading Commission (CFTC)
Kathleen Kraninger, Director, Consumer Financial Protection Bureau (CFPB)
Mark Calabria, Director, Federal Housing Finance Agency (FHFA)
Joseph Otting, Comptroller of the Currency, Office of the Comptroller of the Currency (OCC)
Rodney Hood, Chairman, National Credit Union Administration (NCUA)
Thomas E. Workman, Independent Member with Insurance Expertise
Dino Falaschetti, Director, Office of Financial Research (OFR), Department of the Treasury
(non-voting member)
Steven Seitz, Director, Federal Insurance Office (FIO), Department of the Treasury (non-voting
member)
Charles G. Cooper, Commissioner, Texas Department of Banking (non-voting member)
Eric Cioppa, Superintendent, Maine Bureau of Insurance (non-voting member)
Melanie Lubin, Securities Commissioner, Maryland Office of the Attorney General, Securities
Division (non-voting member)
GUESTS:
Department of the Treasury (Treasury)
Justin Muzinich, Deputy Secretary of the Treasury
Brent McIntosh, Under Secretary for International Affairs
Bimal Patel, Assistant Secretary for Financial Institutions
Howard Adler, Deputy Assistant Secretary for the Council
Eric Froman, Assistant General Counsel (Banking and Finance)
Stephen Ledbetter, Director of Policy, Office of the Financial Stability Oversight Council, and
Executive Director of the Council
Board of Governors of the Federal Reserve System
Randal Quarles, Vice Chairman for Supervision
Andreas Lehnert, Director, Division of Financial Stability
Federal Deposit Insurance Corporation
Travis Hill, Deputy to the Chairman for Policy

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Securities and Exchange Commission
Jeffrey Dinwoodie, Chief Counsel/Senior Policy Advisor for Market and Activities-Based Risk
Commodity Futures Trading Commission
Jaime Klima, Chief of Staff and Chief Operating Officer
Consumer Financial Protection Bureau
Thomas Pahl, Policy Associate Director
Federal Housing Finance Agency
Sandra Thompson, Deputy Director, Division of Housing Mission and Goals
John Roscoe, Chief of Staff, Office of the Director
Comptroller of the Currency
Jonathan Fink, Assistant Chief Counsel
National Credit Union Administration
Andrew Leventis, Chief Economist
Office of the Independent Member with Insurance Expertise
Charles Klingman, Senior Policy Advisor
Federal Reserve Bank of New York
John Williams, President and Chief Executive Officer
Daleep Singh, Executive Vice-President and Head of the Markets Group
Office of Financial Research
Alexander Pollock, Principal Deputy Director for Research and Analysis
Federal Insurance Office
Bruce Saul, Senior Insurance Regulatory Policy Analyst
Texas Department of Banking
Michael Townsley, Policy Counsel, Conference of State Bank Supervisors (CSBS)
Maine Bureau of Insurance
Mark Sagat, Assistant Director, Financial Policy and Legislation, National Association of
Insurance Commissioners
Maryland Office of the Attorney General, Securities Division
Vincente Martinez, General Counsel, North American Securities Administrators Association

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PRESENTERS:
Nonbank Mortgage Origination and Servicing Update
• Stephen Ledbetter, Director of Policy, Office of the Financial Stability Oversight
Council, and Executive Director of the Council, Treasury
• Kevin Silva, Manager, Enterprise Risk Metrics, FHFA (available for questions)
• Karen Pence, Deputy Associate Director, Research and Statistics, Federal Reserve
(available for questions)
• Chuck Cross, Senior Vice President, Nonbank Supervision and Enforcement, CSBS
(available for questions)
Executive Session
The Chairperson called the executive session of the meeting of the Council to order at
approximately 2:35 P.M. The Council convened by conference call.
The Chairperson began by outlining the meeting agenda, which had previously been distributed
to the members together with other materials. The agenda for the executive session of the
meeting included COVID-19 and an update on nonbank mortgage origination and servicing.
1. COVID-19
The Chairperson then introduced the first agenda item, Coronavirus Disease 2019 (COVID-19).
He noted the health risks for certain segments of the population, and asked Council members to
advise on recent developments.
Members of the Council then had a discussion regarding their regulatory and supervisory
activities and developments related to financial markets and institutions. Council members
described their interagency collaboration and issues including loan modifications, small-dollar
lending, the temporary suspension of accounting principles related to troubled debt restructuring,
and the deferment of the implementation of the current expected credit losses accounting
methodology. Regulators also described their market-monitoring efforts, impacts on regulated
entities, and the importance of keeping financial markets open. In addition, regulators discussed
impacts on the housing finance market, efforts to provide relief to borrowers and consumers, and
certain areas of market stress, including nonbank mortgage servicing.
2. Nonbank Mortgage Origination and Servicing Update
The Chairperson then introduced the next agenda item, an update on nonbank mortgage
origination and servicing. The Chairperson introduced Stephen Ledbetter, Director of Policy in
the Office of the Financial Stability Oversight Council and Executive Director of the Council at
Treasury; Kevin Silva, Manager of Enterprise Risk Metrics at the FHFA; Karen Pence, Deputy
Associate Director of the Division of Research and Statistics at the Federal Reserve; and Chuck
Cross, Senior Vice President for Nonbank Supervision and Enforcement at the CSBS.
Mr. Silva began by explaining how staff had organized their analysis of potential risks related to
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nonbank mortgage origination and servicing. He then turned to Mr. Ledbetter, who described
potential sources of stress for nonbank mortgage servicers. Mr. Ledbetter noted that mortgage
forbearance or modification programs assist households but exacerbate liquidity strains on
servicers. He noted that servicers could be required to write down the value of the mortgage
servicing rights in certain circumstances, which could lead to margin calls for the nonbanks. He
also noted the difficulty of hedging risks due to interest rate volatility. He then described certain
policy options that had been proposed to support nonbanks, such as actions to reduce operational
concerns, increase liquidity, and provide regulatory relief.
The Chairperson then stated that he was convening a Council task force on nonbank mortgage
liquidity, for a meeting the following week. Council members then discussed potential risks and
regulatory responses related to nonbank mortgage origination and servicing.
The Chairperson adjourned the executive session of the meeting at approximately 3:14 P.M.
Public Session
The Chairperson called the open session of the meeting of the Council by conference call to
order at approximately 3:23 P.M.
The Chairperson outlined the agenda for the open session, which included (1) COVID-19, and
(2) a vote on the minutes of the Council’s meeting on December 4, 2019.
1. COVID-19
The Chairperson then introduced the first agenda item, COVID-19. The Chairperson thanked the
members of the Council for their recent engagement in an unprecedented economic time, as the
country closed down significant parts of the economy due to the COVID-19 outbreak. The
Chairperson stated that the outbreak was not like a financial crisis, but rather was a specific issue
for which the country had shut down major parts of the economy, and he stated that he looked
forward to health professionals making progress so that once COVID-19 was addressed, the
economy could reopen. The Chairperson noted that the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) had been passed by the Senate by a vote of 96 to 0 on March 25. He
stated that he looked forward to the House taking up the CARES Act on the following day and
passing it.
The Chairperson stated that the CARES Act focused on protecting American workers and
American businesses. He noted that the combination of the small business lending program, the
tax credit program, and the enhanced unemployment insurance was meant to protect American
workers. He stated that the CARES Act would provide Treasury with $500 billion that it could
use for a combination of direct loans and working with the Federal Reserve on facilities under
section 13(3) of the Federal Reserve Act. He stated that before the legislation was passed,
Treasury had used funds available in its Exchange Stabilization Fund, and that he had given the
Federal Reserve his approval of facilities under section 13(3). The Chairperson stated that those
efforts were having an immediate impact in helping American workers and American businesses.
He also noted that the CARES Act provided over $100 billion for hospitals and $150 billion for
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states. In closing, he stated that the Council provided an important forum as officials confronted
a unique situation. The Chairperson called on other Council members to provide comments on
the COVID-19 response.
Jerome Powell, Chairman of the Federal Reserve, stated that the country was facing an
unprecedented situation, and the Federal Reserve’s foremost concern was the human toll for
those stricken by the virus. He stated that the Federal Reserve had taken aggressive actions in a
multifaceted and collaborative response across public and private sector institutions. Chairman
Powell noted that the Federal Reserve’s first priority was using its tools to support households
and businesses and see that they have access to the financial resources they need. He stated that
the Federal Reserve had taken steps to increase both the availability of credit and the capacity to
lend. He noted that the Federal Reserve had lowered the federal funds rate to close to zero,
which he stated will make loans more accessible and affordable. Chairman Powell stated that the
Federal Reserve expected to keep the rate there until the Federal Reserve was confident the
economy had weathered recent events and was on track to achieve the Federal Reserve’s goals of
maximum employment and price stability. He stated that the Federal Reserve had taken steps to
increase liquidity in financial markets and encourage lending, in collaboration with Treasury.
Chairman Powell stated that the Federal Reserve had eased the terms on which banks could
borrow from the Federal Reserve and was working with central banks around the world to ensure
the dollar funding markets are working.
Finally, Chairman Powell noted that the Federal Reserve announced actions on March 23 to
support the flow of credit to households and businesses. He stated that the Federal Open Market
Committee would purchase Treasury securities and agency mortgage-backed securities (MBS) in
the amounts needed to support the smooth functioning of those markets. He noted that the
Federal Reserve was working on a Main Street business lending program to support lending to
small and medium-sized businesses that would complement the Small Business Administration
provisions of the CARES Act. Chairman Powell stated that the Federal Reserve was committed
to using all of its tools to safeguard the economy and serve the American public.
Jay Clayton, Chairman of the SEC, stated that SEC staff was focused on two overriding issues—
first, that the unprecedented health and safety crisis had required all Americans to significantly
change their behavior, including behavior at financial institutions, and second, that the
continuing orderly operation of credit and other capital markets was an essential factor in driving
an effective health and safety response to COVID-19. Chairman Clayton noted that many
industries depended on the continuing provision and receipt of capital and credit and the flow of
capital more generally. He stated that the SEC had focused on the continued orderly functioning
of securities markets. He noted that the SEC had worked with market participants to ensure their
business continuity plans were consistent with state and local health directives and other
measures, as well as the continued orderly operation of markets and regulatory safeguards,
including investor protection.
Chairman Clayton stated that—in part due to coordination and collaboration among regulators—
the securities exchanges, central clearing facilities, and other critical market infrastructure had
functioned in an orderly manner as market participants had transitioned to business continuity
plans. He noted that this had been accomplished in a period of record volatility and capital
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flows. He stated that this continued flow of capital greatly reduced the possibility that the
unprecedented exogenous shock to the U.S. economy would transition to a systemic financial
risk. Chairman Clayton stated that SEC staff had also continued its focus on Main Street
investors and investor protection, as well as market integrity and cyber security.
Heath Tarbert, Chairman of the CFTC, highlighted steps the CFTC was taking in response to the
outbreak. He stated that the CFTC was monitoring derivatives markets, in contact with trading
venues, and checking on the financial resources and operational status of key market
participants. He noted that the CFTC was focused on clearinghouses, through which trades were
margined and settled. Chairman Tarbert stated that market infrastructures continued to operate
seamlessly. He stated that clearinghouses had issued, and brokers and dealers had met, margin
calls occurring multiple times each day. He noted that the value of investments may have
dropped significantly, but that the markets had not frozen as some did in 2008. Chairman
Tarbert stated that the CFTC was granting targeted relief. He noted that social distancing had
created hurdles to complying with regulatory requirements. For instance, he stated that
teleworking traders may not have access to recorded phone lines which the CFTC otherwise
requires when brokers take customer orders by phone. Chairman Tarbert stated that the previous
week, the CFTC had issued nine no-action letters to provide temporary relief from those kinds of
recordkeeping and operational requirements. He stated that in addition, the CFTC had extended
temporary margin relief for market participants with the smallest uncleared swaps portfolios. He
noted that the CFTC continued to encourage registrants to identify additional potential relief that
the CFTC could provide.
Finally, Chairman Tarbert stated that the coronavirus pandemic had led to one of the most
volatile periods the derivatives markets had ever experienced. He noted that the number of
futures, options, and swaps contracts and trades had surged to an all-time high. Chairman
Tarbert stated that rather than amplifying risks, however, the U.S. derivatives markets so far had
acted as shock absorbers to this volatility.
Jelena McWilliams, Chairman of the FDIC, stated that the spread of COVID-19 had impacted
the U.S. economy and had increased volatility in global financial markets. She underscored that
U.S. banks and FDIC-insured deposits were safe, and that this crisis did not originate in banks.
She stated that banks were well-positioned to deliver capital and liquidity to communities across
the United States. She noted that the FDIC was working with other financial regulators to
provide flexibility to banks and customers. Chairman McWilliams stated that the brunt of the
economic impact was going to fall on consumers, small businesses, independent contractors,
low-income borrowers, and hourly workers. She stated that the FDIC had taken several
regulatory actions to provide banks with more flexibility to deploy capital to these borrowers and
to the broader economy. Chairman McWilliams stated that the FDIC had encouraged banks to
work with borrowers. She noted that the FDIC would continue to closely monitor the economic
health and well-being of financial markets, the banking industry, and consumers.
Lastly, Chairman McWilliams warned the public about misinformation regarding the safety of
bank deposits and the ability of consumers to access cash. She stated that consumers should
have heightened awareness of imposters pretending to be FDIC representatives, or anyone
offering unsolicited financial advice.
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Joseph Otting, Comptroller of the Currency, stated that the banks the OCC oversaw were open
for business and that deposits in national banks and federal savings associations remained safe.
He stated that the federal banking system was a source of strength for the national economy.
Comptroller Otting stated that in the previous decade, banks had built capital and liquidity to
historic highs. He stated that regulators had acted to provide banks greater flexibility to assist
their customers. He noted that the OCC and other federal regulators had taken steps to ensure
ample liquidity was available to meet customer demands and enable banks to use the temporary
facilities that federal agencies set up to meet liquidity needs. He noted that the OCC had taken
additional steps to ease pressure on short-term investment funds by authorizing banks to extend
maturities on those funds in response to COVID-19. Comptroller Otting stated that the OCC had
also joined federal and state bank regulators to provide information on loan modifications and
troubled debt restructuring, making it clear that banks the OCC regulates would not be criticized
for prudently working with customers affected by COVID-19, and regulators would not direct
supervised institutions to automatically categorize loan modifications as troubled debt
restructurings. Comptroller Otting stated that supporting customers included easing terms on
new loans and modifying or restructuring existing borrower debt obligations because of
temporary hardships. He stated that the OCC had also provided more incentive for banks to
support community relief by temporarily expanding Community Reinvestment Act credit for
retail lending, community development activities, and services that support communities in
response to COVID-19.
Comptroller Otting stated that the OCC and other regulators would consider additional
regulatory and supervisory actions to support the orderly functioning of banks. He stated the
OCC continued to discuss other topics, including small-dollar lending, the current expected
credit losses accounting methodology, and appraisals for commercial loans. He stated that banks
also had the flexibility to adjust hours and provide alternative service options for their customers.
Comptroller Otting stated that the OCC had also taken steps to ensure its continuity of
operations. He noted that the OCC remained fully operational as staff members worked with
national banks and federal savings associations.
Kathleen Kraninger, Director of the CFPB, stated that the CFPB was working to protect
consumers in the financial services marketplace. She highlighted several efforts underway at the
CFPB. First, Director Kraninger stated that the CFPB had provided guidance to financial
institutions, lenders, and creditors, encouraging them to work with borrowers and customers
affected by COVID-19. Director Kraninger recommended that consumers who may be facing
financial difficulty contact their financial institutions to discuss their specific circumstances. She
stated that, as a backstop, the CFPB was ready to help consumers resolve issues with their
financial service providers through its consumer complaint system.
Second, Director Kraninger noted that the CFPB had engaged with stakeholders to ensure they
were providing appropriate flexibilities to benefit consumers. She stated that the CFPB had
announced temporary regulatory flexibility, for example, delaying reporting requirements with
the goal of facilitating help to consumers. She stated that the CFPB would continue to provide
further relief as needed. Third, Director Kraninger stated that the CFPB had launched a webpage
for COVID-19 resources. She stated that there were a number of steps consumers could take.
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She noted that the website information outlined steps to take, such as if consumers had trouble
meeting their financial obligations, experienced a loss of income, or were targeted by a scammer.
She stated that social isolation was an issue for older adults and could lead to a host of
challenges, including an increased likelihood of falling for scams. Director Kraninger
encouraged consumers to visit consumerfinance.gov.
Mark Calabria, Director of FHFA, stated that his agency had seen disruptions to both the primary
and secondary mortgage markets from the coronavirus. He stated that in the primary market,
FHFA continued to see bottlenecks, particularly in the origination process. Director Calabria
stated that in the secondary market, liquidity in agency MBS had declined until the Federal
Reserve intervened in that market, which brought stability to the market. He stated that FHFA
had taken a number of important steps to provide both support to the market and relief for
homeowners, renters, and multi-family property owners. Director Calabria commended the
Department of Housing and Urban Development for the efforts at the Federal Housing
Administration to align with many of the standards FHFA had put in place to bring relief.
Director Calabria stated that for those facing foreclosure before the coronavirus crisis, FHFA had
directed the government-sponsored enterprises to suspend all foreclosures and evictions for at
least 60 days. He noted that for homeowners struggling to pay their mortgages because of the
loss of income or other coronavirus-related hardships, the enterprises were offering mortgage
forbearance for up to 12 months. Director Calabria stated that for renters and multi-family
properties struggling to pay rent because of the virus, FHFA had announced forbearance for
property owners with enterprise-backed mortgages. He noted that FHFA would take steps to
ensure that tenants will not be evicted while the owner of their multi-family property is in such a
forbearance plan. He stated that FHFA had also directed the enterprises to streamline appraisal
and employment verification requirements for 90 days in order to allow the mortgage process to
work while allowing social distancing to occur. Director Calabria noted that the Federal Home
Loan Banks continued to provide advance support for liquidity to their members.
Rodney Hood, Chairman of the NCUA, provided an update on the NCUA’s activities. He stated
that the nation’s credit union system was liquid and well-capitalized. Chairman Hood noted that
all deposits at federally insured credit unions were protected by the National Credit Union Share
Insurance Fund, with deposits insured up to at least $250,000 per depositor. Chairman Hood
stated that on March 16, NCUA had released its first letter to credit unions on actions related to
COVID-19. He noted that the letter encouraged credit unions to work with affected members by
reminding them of the options they could consider in providing financial relief and greater access
to credit for their members. He stated that the letter included other specific recommendations for
credit unions to help consumers, including offering or expanding small dollar loan products;
offering payment accommodations, such as allowing borrowers to defer or skip payments or
extending the payment due dates; and easing credit terms for new loans. He stated that the letter
also emphasized the prudent efforts that credit unions could take to adjust or alter terms on
existing loans in affected areas, which would not be subject to examiner criticism. Chairman
Hood noted that the NCUA’s public website launched a page of COVID-19 resources. He
concluded by stating that the credit union system would continue to meet the financial services
needs of its members.

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Dino Falaschetti, Director of the OFR, stated that Congress established the OFR to support the
Council and its members with data and research to help better gauge and understand complex
risks to financial stability. He noted that the OFR monitored and analyzed developments that
helped measure stress in financial markets and organizations, while looking to clarify the causes
and extent of vulnerabilities. He stated that recent extreme volatility in equity markets and
increasing credit market disruptions contributed to the current challenge. Director Falaschetti
stated that the OFR’s financial stress index provided a daily market-based snapshot of stress in
global financial markets. He stated that this index had risen sharply since earlier that month. He
noted that while elevated, the level remained well below the highest levels seen in the 2008
financial crisis. Director Falaschetti stated that as COVID-19 disruptions evolved, the OFR
would continue to further its contributions, the inter-agency analyses, and information
exchanges. He concluded by stating that the OFR would monitor, analyze, and share what it saw
with its Council colleagues, while highlighting and delivering on recommendations and requests
for data and analysis.
Charles Cooper, Commissioner of the Texas Department of Banking, stated that state banking
regulators were working with governors and state emergency management to ensure that banking
and other financial service providers were treated as essential services. Commissioner Cooper
stated that banks were facing logistical and practical issues resulting from efforts to contain the
virus. He noted that the work of state banking regulators was focused on supporting their
regulated banks’ work with customers affected by the crisis. He stated that, at the same time,
regulators were working with banks seeking options for maintaining their operations. He noted
that state regulators also oversaw a range of nonbank financial service providers, such as
mortgage companies and money service businesses. He stated that state banking regulators were
working with those businesses also. He concluded by stating that state banking regulators were
working closely with their regulated institutions and federal counterparts.
Eric Cioppa, Superintendent of the Maine Bureau of Insurance, stated that state insurance
regulators were engaged in heightened monitoring of the insurance sector and continued to
assess the impact of COVID-19 on various types of insurance, individual companies, and the
sector as a whole. He noted that regulators were in ongoing communication with companies to
evaluate any financial impact on insurers. He stated that the insurance business model and its
regulatory regime were designed to manage risk and required insurers to prepare for severe
events. Superintendent Cioppa stated that leading up to the crisis, the sector was in a strong
financial position and remained so. He stated that to the extent the country was able to flatten
the curve of the virus, there would likely be few if any immediate solvency issues for the
industry due to increases in insurance claims. He stated that, furthermore, all three insurance
sectors (health, life, and property and casualty) had significant holdings of cash and marketable
securities. He noted that much of the industry’s exposure to equities was small. He stated that
the largest asset class for insurers was bonds and that over 95 percent were in investment-grade
securities. Superintendent Cioppa stated that while the industry may feel material impacts,
insurance regulators would be monitoring the sector, in particular those companies that could
have the greatest exposure. Superintendent Cioppa also described actions regulators had taken to
help insurance consumers. He noted that some insurance policies contained conditions
addressing whether losses related to a pandemic like COVID-19 were covered and that

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policyholders should examine their policies. He concluded that state insurance regulators would
continue to coordinate on the COVID-19 response with federal agencies.
Melanie Lubin, Securities Commissioner in the Securities Division of the Maryland Office of the
Attorney General, remarked that state securities regulators had been working to provide financial
service professionals with the temporary relief needed to withstand challenges caused by the
COVID-19 outbreak, while at the same time ensuring that investors were protected from fraud.
She stated that over 30 states had taken steps to extend certain deadlines and provide temporary
relief from a variety of requirements. Commissioner Lubin noted that the North American
Securities Administrators Association (NASAA) had drafted a model emergency order for states
to use to grant temporary relief from certain registration filing and form delivery requirements.
She stated that state securities authorities remained focused on their mission to protect investors
from fraud. Commissioner Lubin stated that regulators were diligently monitoring for fraudulent
activities. She stated that both individual states and NASAA had issued investor advisories
regarding potential fraud. Commissioner Lubin stated that state securities regulators
recommended that investors perform due diligence on financial professionals by contacting their
state securities regulator or searching on FINRA’s BrokerCheck service or the Investment
Adviser Public Disclosure website.
2. Resolution Approving the Minutes of the Meeting Held on December 4, 2019
BE IT RESOLVED, by the Financial Stability Oversight Council (the “Council”), that the
minutes attached hereto of the meeting held on December 4, 2019 of the Council are hereby
approved.
The Chairperson asked for a motion to approve the resolution, which was made and seconded.
The Council approved the resolution by unanimous vote.
3. Other Business
Before concluding the meeting, the Chairperson stated that in the coming weeks the Council
would remain focused on the nonbank mortgage servicing business, particularly given the
forbearance issues and liquidity issues this business sector may experience. He noted that he had
asked several Council members to establish a task force to evaluate nonbank mortgage servicing
issues related to the COVID-19 outbreak and report back to the Council the following week. In
addition, the Chairperson noted the importance of keeping financial markets open. He stated that
if market regulators determined that markets could not stay open full hours, regulators may
consider limiting the trading hours, but he stated that their preference was to maintain normal
market operations.
The Chairperson adjourned the meeting at approximately 4:04 P.M.

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