United States

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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

Recent US federal court case examines SAFTs under federal securities laws

Cryptocurrency and token offerings present a regulatory paradox. The Securities and Exchange Commission contends that in various circumstances cryptocurrency and token offerings constitute “securities” that must comply with securities laws. A potential approach: “simple agreements for future tokens” or SAFTS. In a recent New York Law Journal column, Robert Schwinger, a partner in the New … 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

US bank regulators issue cloud computing security guidance

On April 30, 2020, the US Federal Financial Institutions Examination Council (FFIEC), an interagency group of federal and state banking regulators, issued guidance on “Security in a Cloud Computing Environment.” The FFIEC guidance focuses on security risk management principles and the financial services sector’s use of cloud computing, and supplements its publications on outsourcing of … Continue Reading

SEC Proposes New Framework for Fund Valuation Practices

On April 21, 2020, the Securities and Exchange Commission (“SEC”) proposed new Rule 2a-5 under the Investment Company Act of 1940 (the “1940 Act”) to “modernize” the framework for fund valuation practices applicable to mutual funds, business development companies and other “registered investment companies” under the 1940 Act (each, a “fund”). This framework has not … 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

SEC Orders Third Ever Whistleblower Award to Compliance Officer

On March 30, 2020, the SEC ordered its third ever whistleblower award to a compliance officer in the amount of $450,000. In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things provided for the payment of monetary awards under certain circumstances to whistleblowers whose tips to the SEC … Continue Reading

The other side of the Volcker Rule: Proposed changes to the covered funds provisions

In November 2019, the financial services regulators responsible for the Volcker Rule regulations (the Board of Governors of the Federal Reserve Board, the Office of the Comptroller of the Currency, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission, collectively, the “Agencies”) issued final rules revising the proprietary … Continue Reading

US AML compliance during the COVID-19 pandemic

The US anti-money laundering (AML) agency, the Financial Crimes Enforcement Network (FinCEN), has issued guidance regarding AML compliance for financial institutions during the current COVID-19 pandemic. This guidance would be in addition to any issuances from their respective functional regulators, if any. March 16 Guidance On March 16, 2020, FinCEN issued guidance requesting that financial … 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

NYDFS Requires COVID-19 Plans by April 9

On March 10, 2020, the New York Department of Financial Services (NYDFS) issued guidance to all of its regulated institutions engaged in virtual currency business activity, requiring them to have plans for preparedness to manage the possible operational and financial risks posed by the COVID-19 pandemic. NYDFS requires the plans to be submitted by Thursday, … 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

US financial regulators establish webpages on the COVID-19 pandemic

The US financial regulatory, consumer protection and enforcement supervisors are regularly issuing press releases and statements concerning the COVID-19 pandemic. Each of them has established special links to provide information to the public on its response to the pandemic. Board of Governors of the Federal Reserve System: https://www.federalreserve.gov/covid-19.htm Commodity Futures Trading Commission: https://www.cftc.gov/coronavirus Conference of State … 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

US banking regulators weigh in on the coronavirus (COVID-19) pandemic

As with other US and non-US regulators, the US federal banking regulators (Federal Reserve Board, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, collectively, the “US federal banking regulators”) have been issuing statements and providing guidance on the impact of the coronavirus on banking services. This blog posts covers some … 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
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