Banking Agencies Modify Liquidity Coverage Ratio Rule

The Federal Reserve Board, the FDIC and the OCC (collectively, the "Agencies") modified the liquidity coverage ratio ("LCR") rule to eliminate the effects on banking organizations for participating in the Money Market Mutual Fund Liquidity Facility ("MMLF") and the Paycheck Protection Program Liquidity Facility ("PPPLF").

In an interim final rule, the Agencies amended the LCR rule to:

• define "Covered Federal Reserve Facility Funding" as a non-recourse loan that has been extended as part of the MMLF or PPPLF; and
• provide that Covered Federal Reserve Funding and the assets that secure such funding are excluded from the calculation of a covered company's total net cash outflow amount for purposes of the LCR rule.