California Legislature Passes Mini-CFPB Bill; If You Liked The Department Of Business Oversight, Get Ready For The Department Of Financial Protection And Innovation

On August 31, both houses of the California legislature passed and sent to Governor Newsom for signature the California Consumer Financial Protection Law (the CCFPL).  Effective on January 1, 2021 if Governor Newsom signs the bill (which he is expected to do), the Department of Business Oversight will be replaced by the Department of Financial Protection and Innovation (DFPI).  Much of the law comes directly from Title X of the Dodd-Frank Act, with a particular focus on consumer protection.  While the DBO has authority to enforce specific laws, the focus of the DFPI will be on the kinds of products and services that are offered, without linking the agency’s authority to particular statutes. Continue Reading

Protecting Exclusive Distribution Rights for Patented Products and Other Licensed IP

This post originally appeared as an article in the July/August 2020 issue of the Journal of Corporate Renewal (JCR), the official publication of the Turnaround Management Association (TMA).

The ability of companies to continue as going concerns has become more challenging than ever. As companies pivot and move forward with product production
and sales, they must consider not only their financial viability but the financial viability of their customers, suppliers, and licensors. Continue Reading

Federal Reserve Clarifies that Distributions to Tribal Governments are Permitted Under the Main Street Lending Program

On July 15, 2020, the Federal Reserve Bank of Boston issued new guidance expressly permitting tribal businesses that are borrowers under the Main Street Lending Program (“MSLP”) to pay dividends to their tribal government owners.  In its amended Frequently Asked Questions (the “July 15th FAQs”), available here, the Federal Reserve announced that the Treasury Secretary exercised his authority under the CARES Act to waive the prohibition against the payment of dividends in the MSLP, permitting tribal businesses that are wholly or majority-owned by one or more tribal governments to make distributions to their tribal government owners.  See July 15th FAQ H.15 and H.2.  Tribal businesses and organizations seeking financial relief and Lenders seeking to extend credit under the MSLP have advocated for this important clarification so that tribal businesses may gain access to much-needed capital during the economic strain of the COVID-19 pandemic.  For example, Sheppard Mullin sought this important clarification with respect to tribal distributions in comments it submitted to the Federal Reserve on April 16, 2020. Continue Reading

U.S. Supreme Court finds Muscogee (Creek) Nation’s Reservation Remains Intact For Purposes of Criminal Jurisdiction

The U.S. Supreme Court in a 5-4 decision on July 9, 2020 held that the State of Oklahoma lacked jurisdiction to prosecute an enrolled member of the Seminole Tribe of Oklahoma because the crimes he was accused of committing occurred within the Muscogee (Creek) Reservation. Continue Reading

Paycheck Protection Program: Updated Loan Forgiveness Estimator Workbook

Below please find a link to a newly-updated version of the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin. Continue Reading

PPP Updates: Extension of the Application Deadline, Disclosure of PPP Borrowers Receiving Greater than $150,000 in PPP Loans, and the “Owner-Employee” Dilemma

On July 4, 2020, President Trump signed into law a bill passed by the U.S. Congress that extends the application deadline for the Paycheck Protection Program (PPP)[1] from June 30, 2020 to August 8, 2020.  The extension of the PPP application deadline comes on the heels of the latest PPP report issued by the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) stating that, as of June 30, 2020, approximately $131 billion of the allocated $670 billion remains unspent.  In their report the SBA and Treasury added that, as of June 30, 2020, the average PPP loan size was $107,000, and that the PPP has supported approximately 51 million jobs, or roughly 84% of all employees working at small businesses. Continue Reading

Interplay of Main Street Lending Program Documents (the Rights and Role of the Main Street SPV)

The $600 billion Main Street Loan program has been highly anticipated to provide financial support in the form of loans to small and medium-sized U.S. businesses affected by the COVID-19 pandemic. The Federal Reserve Bank of Boston that is administering the Main Street Loan program has released term sheets and various other program documents for the three types of loans, “New,” “Priority” and “Expanded,” as well as over 70 pages of Frequently Asked Questions (FAQs). As a result, the contours of the Main Street Loan program are now substantially settled[1] as the Fed announced publicly on Monday, July 6, that the Main Street Lending Program is now fully operational and ready to purchase participations in eligible loans that are submitted to the program by registered lenders (Eligible Lenders). Continue Reading

CFPB Issues Factsheet On TRID Title Insurance Disclosures And Updates TRID FAQ

On June 9 the Consumer Financial Protection Bureau (CFPB) published a Factsheet on how to disclose title insurance on the Loan Estimate and Closing Disclosure, including when a negative owner’s title insurance cost disclosure is appropriate, and updated the TRID FAQs to include guidance on the total of payments disclosure, using the optional signature line on the Loan Estimate and Closing Disclosure, and the requirement to include seller information on the consumer’s disclosures if providing separate Closing Disclosures.  This blog discusses the Factsheet, and sets forth the four questions added to the FAQ, along with brief answers. Continue Reading

Updates to the PPP Loan Forgiveness Application Form

On June 16, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) published an updated Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program (PPP)[1] to conform with the changes to the PPP pursuant to the Paycheck Protection Program Flexibility Act (PPPFA).  The Loan Forgiveness Application is composed of a loan forgiveness calculation form, a related Schedule A worksheet, a representations and certifications form, and an optional PPP borrower demographic information form.  The application is further supplemented by a Loan Forgiveness Application Instructions for Borrowers sheet.

 Coronavirus, PPPFA

Continue Reading

[UPDATED] Paycheck Protection Program Flexibility Act: Major Changes to the PPP

[Update: This is an updated version of an article published on June 5, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The PPP Flexibility Act has been further supplemented by the (i) Joint Statement, issued on June 8, 2020 by U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza (the Joint Statement) and (ii) Seventeenth Interim Final Rule[1], issued by the SBA on June 11, 2020. Continue Reading

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