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As of November 1, 2021, dealers in security-based swaps (“SBS”) whose dealing activity exceeds certain de minimis thresholds (e.g., gross notional amount of $3 billion for credit default SBS, $150 million for other SBS, and $25 million for SBS where the counterparty is a special entity) are required to register with the SEC as a security-based swap dealer  (“SBSD”) and to comply with the SEC’s regulations applicable to SBS.[1]  Many dealers exceeded these thresholds and filed for registration on or prior to November 1.  Other dealers who exceed these thresholds later will be required to register at a future date.
Continue Reading Security-Based Swap Rules for End-Users

On July 1, the Federal Housing Finance Agency (FHFA) released a Policy Statement on its commitment to comprehensive fair lending oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (collectively, “regulated entities”).  The FHFA addressed its position on:  (i) monitoring and information gathering; (ii) supervisory examinations; and (iii) administrative enforcement related to the Equal Credit Opportunity Act, the Fair Housing Act, and the Federal Housing Enterprises Financial Safety and Soundness Act.  The FHFA added that the statement operates as a “foundation for future interpretations by the agency and its regulated entities.”  Comments on the policy statement are due 60 days after publication in the Federal Register.
Continue Reading FHFA Releases Policy Statement On Fair Lending

On June 29, the CFPB and the Georgia Attorney General’s Office settled with a debt-relief and credit-repair company and its owners for allegedly deceiving consumers into hiring the company to lower or eliminate credit-card debts and improve consumers’ credit scores.  The complaint alleges that the plaintiffs’ use of telemarketing and direct mail violated the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Consumer Financial Protection Act, and Georgia’s Fair Business Practices Act by, among other things, falsely claiming that:
Continue Reading CFPB and Georgia AG Settle With Debt-Relief Company

On June 29, NYDFS announced that two New York-charted banks engaging in indirect auto lending will pay civil money penalties for violating New York’s fair lending law for engaging in practices that resulted in members of protected classes paying higher interest rates that were not based on creditworthiness.  In particular, NYDFS asserts that the practice of allowing “dealer markup” in setting retail interest rates resulted in statistically significant differences in pricing, disadvantaging Hispanic and African-American consumers, with differences ranging from 20 to 59 basis points.
Continue Reading DFS Settles with Indirect Auto Lenders to Resolve Fair Lending Violations

Though bankruptcy filings are down in 2021, the expiration of the Paycheck Protection Program and reopening of the courts nationwide could lead to a rise in bankruptcy filings with many businesses still struggling to cope with the economic and supply chain aftereffects of the pandemic and consumer purchasing habits.  These bankruptcies, in turn, will have an inevitable ripple effect on creditors and other claimants, whose abilities to collect on claims and exercise rights, are significantly restricted by the automatic stay.  Generally, the automatic stay requires a party seeking relief against a debtor to do so in, and only in, the bankruptcy court, which can provide the relief sought or grant permission to pursue claims and rights in another venue.  For many businesses, considerations regarding the automatic stay end there, believing so long as they were deliberate enough to seek relief in the bankruptcy court, they will not face the potentially harsh consequences of violating the automatic stay.  But, a recent decision in In re Roman Catholic Church of the Archdiocese of Santa Fe serves as the latest reminder that very rarely can one be too careful when seeking relief against a debtor, even in the bankruptcy court itself.
Continue Reading A Bankruptcy Conundrum: When You Must Seek Relief To Seek Relief

OK, so you’re a sophisticated lending attorney in Metropolis who is comfortable with everything from aircraft financing to syndicated loans secured by casinos in Macau. Yet you feel a twinge of uncertainty when a business loan is to be secured by wine inventory made from grapes grown in both California and Washington. You know intuitively that anytime farmers, ranchers or food processors are in the mix, either as a borrower or a supplier to the borrower, the underwriting and documentation challenges are not uniform on a state-by-state basis, and are compounded by an overlay of federal laws designed to protect growers of perishable crops and providers of livestock. To get a reality check, you sometimes will secretly call your law school classmate who oddly returned to Smallville and now represents its one bank.
Continue Reading Farm Lending Pitfalls For Urban Lawyers

On June 4 the Consumer Financial Protection Bureau (CFPB) issued proposals to address issues arising from the required transition away from the London Interbank Offered Rate (LIBOR) scheduled for the end of 2021.  LIBOR has been widely used as a benchmark in consumer financial products such as adjustable rate mortgage loans, home equity lines of credit (HELOCs), student loans and credit cards.  The CFPB released a more than 200 page rulemaking proposal calling for changes to its truth-in-lending regulations relating to the LIBOR transition.  The CFPB also simultaneously issued guidance in the form of Frequently Asked Questions (FAQ)  This blog will emphasize the proposal’s and the FAQ’s impact on adjustable rate mortgage loans and HELOCs.
Continue Reading CFPB Issues Proposed Amendment to Regulation Z and Guidance to Deal with LIBOR Transition

With the World Health Organization declaring COVID-19 a pandemic on Wednesday, March 11, 2020, businesses are likely to continue to feel its effects.  When businesses are unable to perform their contractual obligations as a result of COVID-19, force majeure clauses may become important.
Continue Reading Force Majeure Clauses and COVID-19 – Can Force Majeure Clauses Excuse Performance Under New York or Delaware Law in a Pandemic?