Patrick Dolan (US)

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The LIBOR Transition — US banking regulators caution banks on LIBOR transition risks

As noted in previous LIBOR Transition posts, the availability of LIBOR as a reference rate is not guaranteed beyond the end of 2021. On July 1, 2020, the Federal Financial Institutions Examination Council (FFIEC), which consists of US federal and state banking regulators and the Consumer Financial Protection Bureau, issued a Joint Statement highlighting the … Continue Reading

The SFA files court brief in bankruptcy court opposing Hertz’s attempt to alter an ABS arrangement

The US Structured Finance Association (the “SFA”), the securitization industry group, has filed an amicus brief in support of a challenge and objection to the Motion for Order Rejecting Certain Unexpired Vehicle Leases Effective Nunc Pro Tunc to June 11, 2020 Pursuant to Sections 105 and 365(A) of the Bankruptcy Code (the “Motion”) filed by … Continue Reading

European Commission’s High-Level Forum on Capital Markets Union issues final report

On June 10, 2020, the European Commission’s High-Level Forum (HLF) issued its final report on the Capital Markets Union (CMU), which proposes detailed recommendations for improving and enhancing the capital markets of the European Union (EU). The report’s 17 recommendations are grouped under four larger themes: (i) creating a vibrant and competitive business environment; (ii) … Continue Reading

The LIBOR Transition — CFPB addresses elimination of LIBOR in consumer credit transactions

LIBOR is used as a component of an interest or finance charge in consumer transactions as well as the commercial transactions we have discussed in prior LIBOR Transition posts. On June 4, 2020, the US Consumer Financial Protection Bureau (CFPB), issued a proposed rule that would amend US consumer credit regulations to address the pending … Continue Reading

OCC formalizes “valid-when-made” interest rate doctrine on loan transfers

On June 2, 2020, the Office of the Comptroller of the Currency (“OCC”) published a final rule clarifying the permissible interest rates on transferred loans in relation to the “valid-when-made” doctrine. According to the “valid-when-made” doctrine, a loan is valid at its inception and cannot become invalid or unenforceable based on its original terms due … Continue Reading

The LIBOR Transition – ARRC 2020 Best Practices for Completing the Transition from LIBOR

Following on our post discussing the ARRC’s publication of their 2020 Key Objectives, we mentioned that ARRC panned to release a set of recommended best practices. As promised, the ARRC has published guidance for Best Practices for Completing the Transition from LIBOR (“Best Practices Guidance”), along with an accompanying fact sheet, which sets forth recommended … Continue Reading

The LIBOR Transition – ARRC’s further consultation on spread adjustment methodologies and advice on the SOFR Index

Following on our post discussing the ARRC’s recommendations outlining a spread adjusting procedure, we mentioned that the ARRC planned to release a more detailed final recommendation of the spread adjustment methodology for cash products. On May 6, 2020, the ARRC released a supplemental consultation seeking further views on certain technical questions for the spread adjustment … Continue Reading

Updated TALF term sheet released

On April 9, 2020, the Federal Reserve released an updated term sheet for the Term Asset-Backed Securities Loan Facility (“TALF”). Eligible borrowers under TALF (“Eligible Borrowers”) must now be U.S. companies that own eligible collateral and maintain an account relationship with a primary dealer. A “U.S. company” now is defined as a business that is … Continue Reading

The LIBOR Transition – ARRC 2020 Key Objectives

Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the key objectives for 2020 released by the Alternative Reference Rates Committee (“ARRC”), the group of private market participants advising the Federal Reserve … Continue Reading

The LIBOR Transition – ARRC issues recommendations outlining spread adjusting procedure

Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the agreement reached by the members of the Alternative Reference Rates Committee (“ARRC”) on a spread adjustment methodology for cash products referencing U.S. dollar … Continue Reading

Federal regulators suspend foreclosures and evictions for certain home owners

With the COVID-19 pandemic bringing the U.S. economy to a halt, residential mortgage servicers are bracing for widespread defaults as a result of the general economic shutdown. A recent projection from Moody’s estimates that approximately 30% of home loans could enter default if the economic shutdown continues through the summer. To alleviate pressure on borrowers, … Continue Reading

The LIBOR Transition – ARRC’s Recommended Fallback Contract Language – New Variable Rate Private Student Loans

Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) consultation on fallback contract language for new variable rate private student loans. This is … Continue Reading

US banking regulators delay CECL adoption for some, but not all, banks

After industry groups stressed the need to adopt regulatory changes in light of the COVID-19 pandemic, on March 27, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency (collectively, the “Banking Agencies”) issued a joint press release announcing an interim final rule … Continue Reading

Federal Reserve establishes Commercial Paper Funding Facility

As part of a comprehensive effort to alleviate strain on the commercial paper markets due to the COVID-19 pandemic, on March 17, 2020 the Board of Governors of the Federal Reserve System (the “Federal Reserve”) announced the creation of the Commercial Paper Funding Facility (“CPFF”). Similar to the CPFF program implemented in 2008, which was … Continue Reading

Federal Reserve announces TALF 2.0 to assist asset-backed issuers

On March 23, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) announced a wide array of actions intended to promote economic stability in light of the COVID-19 pandemic, including several different credit facilities. The Federal Reserve announced as one of these credit facilities a renewal of the Term Asset-Backed Securities … Continue Reading

The LIBOR Transition – ARRC releases recommended NY Legislation on LIBOR

Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) for New York legislation, which was published on March 6, 2020. The ARRC is a group of … Continue Reading

The LIBOR Transition – SFA Survey on Potential LIBOR Transition Solutions for Securitization Market Legacy Vehicles and Instruments

Following up on our past posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss a Structured Finance Association (“SFA”) survey with respect to potential LIBOR transition solutions in the securitization industry. The SFA is group of structured finance … Continue Reading

The LIBOR Transition –Global and US Regulators Expectations on LIBOR Planning

Following up on our past posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss some recent issuances by global and US government regulators on the LIBOR transition. The LIBOR transition requires considerable work from all market participants and … Continue Reading

The LIBOR Transition – Potential New York State Legislation

Following up on our past posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss in this post the Alternative Reference Rates Committee (“ARRC”) and its role in potential New York State legislation with respect to the LIBOR transition. As … Continue Reading

The LIBOR Transition – ISDA Consultation Market Responses

Following up on our past posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss in this post the International Swaps and Derivatives Association (“ISDA”) Summary of Responses to the ISDA Consultation on Final Parameters for the Spread and Term … Continue Reading

The LIBOR Transition – ARRC’s LIBOR Fallback Language for Residential Mortgages

Following up on our past posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, concerns the Alternative Reference Rates Committee (“ARRC”), and the adoption by Freddie Mac and Fannie Mae (which are US government-sponsored enterprises in the housing finance market) of … Continue Reading

The LIBOR Transition – Tax consequences of switching from LIBOR

Following up on our past posts (available here and here) on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates denominated in other currencies (collectively with LIBOR, “IBOR”), we discuss in this post the US Internal Revenue Service’s (“IRS”) proposed “Guidance on the Transition From Interbank Offered Rates to Other … Continue Reading

The LIBOR Transition – the Secured Overnight Financing Rate (SOFR)

Following up on our previous post of earlier this week, in this update on the transition away from LIBOR (London Interbank Offering Rate) as the reference rate of choice for financial transactions, we discuss one such alternative, the Secured Overnight Financing Rate (SOFR) issued by the Federal Reserve Bank of New York (”FRBNY”). On November … Continue Reading

The LIBOR Transition — What is LIBOR and why is it important?

Since its creation by the British Bankers Association in the 1980s, the London Interbank Offering Rate (“LIBOR”) has been used as a reference rate for borrowing costs between banks. The LIBOR calculation today is coordinated by the International Continental Exchange Benchmark Administration, which receives information on a daily basis from a group of global money … Continue Reading
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