On July 25th, the CFPB announced plans to allow the temporary Qualified Mortgage (QM) status given to loans eligible for purchase by Fannie Mae or Freddie Mac (the GSEs) to expire. However, the agency stated it could allow a short extension past the January 10, 2021 expiration date, and is in any case soliciting public comments on the general QM definition, including its income and debt documentation requirements. Continue Reading CFPB to rip off the patch?

On June 18, 2019, the Securities and Exchange Commission (the “SEC”) issued a concept release requesting public comment on ways to simplify, harmonize and improve the exempt offering process to expand investment opportunities while maintaining investor protections.   The full text of the SEC concept release is here. Continue Reading Concept release on harmonization of securities offering exemptions

On July 16, 2019, the Federal Deposit Insurance Corporation (the “FDIC”) proposed changes to certain provisions of its securitization safe harbor rule (the “Rule”), which relates to the treatment of financial assets transferred in connection with a securitization or participation transaction.  12 C.F.R. § 360.6. The proposed rule (“Proposed Change”) would eliminate the requirement that the securitization documents require compliance with Regulation AB of the Securities and Exchange Commission (“SEC”), 17 C.F.R. §§ 229.1100 et. seq. (“Regulation AB”), in circumstances where Regulation AB by its terms would not apply to the issuance of obligations backed by such financial assets.  This proposed change would modify section 360.6(b)(2)(i)(A) of the Rule to read as follows:

Continue Reading FDIC proposes changes to securitization safe harbor rule

Minnesota Statute § 53C.02 prohibits a person from engaging in the business of a “sales finance company” within the State of Minnesota without a motor vehicle sales finance company license.  Section 53C.01, subd. 12 defines a sales finance company as:

“…a person engaged, in whole or in part, in the business of purchasing retail installment contracts in this state from one or more retail sellers…”

Continue Reading Minnesota issues guidance on definition of “sales finance company” for licensing purposes

On May 20, 2019, the Supreme Court decided Mission Product Holdings, Inc. v. Tempnology, LLC, No. 17-1657.  In an 8-1 decision, and in a majority opinion authored by Justice Kagan, the Court held that  the debtor-licensor’s rejection of a trademark license under Section 365 of the Bankruptcy Code “has the same effect as a breach outside bankruptcy” and, as such,  the debtor, through such a rejection, could not rescind the non-debtor’s licensee’s right to continue to use the trademarks; in short, the debtor-licensor’s rejection of the license “cannot revoke the license.”  Slip Op. at 16-17.   Tempnology, of course, has immediate ramifications for structured finance vehicles involving trademarks licenses.  While Section 365(n) of the Bankruptcy Code gives the non-debtor licensee the option to retain the benefits of a rejected lease of intellectual property in return for continued royalty payments and the waiver of setoff and other rights, the Bankruptcy Code does not include trademarks within its definition of intellectual property;  until today, there has been a circuit split as to whether non-debtor licensees of trademarks had a similar option or whether the debtor effectively could rescind the license through rejection.  In Tempnology, the Court clearly holds that a debtor licensor cannot revoke a trademark license through rejection.

Continue Reading Not so distant ripples in the pond: The Supreme Court’s Tempnology decision and equipment leasing

On April 25th, the Alternative Reference Rates Committee, an advisory committee of the New York Federal Reserve Bank (ARRC), released recommended contractual fallback language for U.S. dollar LIBOR denominated floating rate notes and syndicated loans.

This language is part of ARRC’s mandate to help resolve issues with contracts that reference LIBOR.  The ARRC recommends the Secured Overnight Financing Rate (SOFR) as s replacement to LIBOR and has put in place a comprehensive plan of transition – the Paced Transition Plan

 

Mayer Brown Partners Ryan Suda and Sagi Tamir will speak at the 8th Annual Investors’ Conference on CLOs and Leveraged Loans being held on May 20-21, 2019 in New York City. This conference explores important industry and regulation updates, key trends, opportunities and challenging headlines facing the leveraged loans market.

Ryan Suda will moderate the panel on “The Innovation Game: Alternative CLO Structures” and Sagi Tamir will participate on the “Assessing the Landscape: Europe and the U.S.” panel on May 21.

Continue Reading Mayer Brown partners speaking at IMN’s investors’ conference on CLOs and leveraged loans

On Wednesday, April 10, Mayer Brown co-hosted with Fitch Ratings a “CLOs and Direct Lending in Chicago” seminar. This was the 7th consecutive annual iteration of this event with Fitch. An audience of over 120 attendees (and in excess of 200 registrants) heard from middle market participants and researchers. The agenda included a macroeconomic update by Fitch’s Chief Economist, a panel on the Growth and Appeal of Direct Lending as an Asset Class, a Regulatory Update by Mayer Brown lawyers Brian Hirshberg (counsel, NY), Adam Kanter (partner, DC), Joanna Nicholas (counsel, NY) and Sagi Tamir (partner, NY), a panel on CLO Dynamics and a keynote presentation by David Preston of Wells Fargo, who gave a Middle Market CLO 2019 Outlook. Attendees also enjoyed a networking reception that followed the seminar.

The presentation slides are available upon request to jgold@mayerbrown.com.

Mayer Brown Partners Paul Jorissen and Lauren Pryor will speak at the 6th Annual Residential Mortgage Servicing Rights Forum being held April 15-16, 2019 in New York City. This conference explores the key industry issues, including the origination trends, views from the regulators, and more.

Paul Jorissen will moderate the panel on “Financing in the MSR Market” and Lauren Pryor will moderate the panel on “Buying a Mortgage Servicer/Originator vs. Rights vs. Subservice” on April 15. Continue Reading Mayer Brown partners speaking at IMN’s residential MSR forum

Montana may be, like New Mexico and possibly Colorado,[1] permitting utility tariff bonds related to certain electrical generating plant retirements. If enacted as proposed, the law would be called the “Montana Energy Impact Assistance Act.” Continue Reading Utility tariff bonds for coal and other electrical generating plant retirements in Montana?