Earlier this week, the Consumer Financial Protection Bureau (“CFPB”) won an important court ruling in a long-running case against student loan securitization trusts. The case has a long (and for the CFPB, somewhat ignoble) history. The CFPB first filed suit against 15 Delaware statutory student loan securitization trusts (the “Trusts”) in September 2017. The complaint alleged that the Trusts, through the actions of their servicers and sub-servicers, engaged in unfair and deceptive debt collection and litigation practices. Along with the complaint, the CFPB filed a purported consent judgment that the CFPB represented to the Court had been executed by the defendants. As we’ve previously discussed, in an embarrassing setback, the district court denied the CFPB’s motion to enter the consent judgment, finding that the attorneys who executed it on behalf of the defendant Trusts were not authorized to do so by the proper trust parties (and that, with respect to at least some of the Trusts, the CFPB knew that the proper parties had not consented). The CFPB was therefore left to litigate a case that it thought it had settled. Subsequently, after the Supreme Court held that the CFPB’s structure was unconstitutional because it was headed by a single director removable by the President only for cause, the district court dismissed the CFPB’s case without prejudice, holding that the CFPB did not have the power to bring the case when it did due to its structural defect. We discussed that ruling here.

Continue reading on Mayer Brown’s Consumer Financial Services Review blog.


As we discussed in a previous post, last October the Financial Accounting Standards Board (“FASB”) added the development of guidance on disclosure requirements with respect to trade payables programs to their agenda.  At the same meeting, FASB explicitly decided not to address the issue of how trade payables programs should be characterized for accounting purposes – a separate issue from disclosure that may be taken up by FASB in the future.

In the year since FASB voted to take up the issue of disclosure requirements for trade payables programs, the most significant development was the June 2021 decision to include in FASB’s draft proposal a requirement that companies with payables programs disclose the key terms of the programs, the total confirmed amounts payable under the programs and a description of where those amounts are presented in the balance sheet.  This is intended by FASB to provide investors with a broader view of certain companies’ liquidity positions.

At a board meeting on September 22nd, FASB took another step forward, voting in favor of a requirement that companies utilizing trade payables programs include a roll-forward of amounts confirmed under those programs in their annual disclosures. However, the board voted against developing any specific disclosure requirements for interim reporting periods.

The next step in the process is expected to be for FASB to develop a draft proposal setting forth in detail their proposed disclosure requirements, which is anticipated before the end of 2021.  A 90-day public comment period will follow the release of the draft proposal, after which FASB will develop its final guidance.  Given the longstanding and extensive use of payables programs by many large corporations, no doubt industry watchers will keep a close eye on FASB’s next moves related to payables programs.

The New York Department of Financial Services (NYDFS) has issued “pre-proposed” rules under New York’s commercial financing disclosure law that was enacted at the end of 2020.  The pre-proposed rules are 45 pages in length and were posted on the NYDFS website on September 21. Comments on the pre-proposed outreach rules are due by October 1. There will be a longer comment period once a proposed rule is published in the State Register. The NYDFS is aiming to finalize the rules before the law takes effect on January 1, 2022.

Continue Reading NYDFS Issues Pre-Proposed Rules to Implement New Commercial Financing Disclosure Law

Following on from our April 2020 post (where we discussed the call from certain accounting firms and others for guidance from the Financial Accounting Standards Board (“FASB”) on the treatment of trade payables programs) and our October 2020 post (where we provided an update on the FASB’s proposals in response), on June 23, 2021, the IFRS International Accounting Standards Board (“IASB”) tentatively agreed to add a narrow-scope standard-setting project in respect of “supplier finance arrangements” to its work plan with the intention of amending certain IFRS and IAS standards to include additional disclosure requirements and clarifications in respect of “supplier finance arrangements.” Continue Reading Update on IFRS Disclosure Requirements for Supplier Finance Arrangements

The Joint Committee of the European Supervisory Authorities (the “Joint Committee” and the “ESAs”, respectively) has published a report on the implementation and functioning of the EU Securitisation Regulation (the “EUSR”) on 17 May 2021 (the “Report”).

The Report has been published pursuant to Article 44 of the Securitisation Regulation, which required the Joint Committee to publish a report by 1 January 2021 (and every three years thereafter) on (a) the implementation of the requirements for “STS” (simple, transparent and standardised) securitisations, (b) an assessment of the actions taken by the EU competent authorities on material risks and vulnerabilities and the actions of market participants to further standardise securitisation documentation, (c) the functioning of the due diligence requirements of Article 5 and the transparency requirements of Article 7 of the EUSR, and the level of transparency of the securitisation market, and (d) the risk retention requirements of Article 6 including compliance by market participants and the methods of risk retention. 

The Report will be used by the European Commission (the “Commission”) for the preparation of its report to the European Parliament and the Council of the European Union on the functioning of the EUSR, which is due by 1 January 2022, pursuant to Article 46 of the EUSR, and which may be accompanied by a legislative proposal.  It is therefore an important step in relation to the regime for EU securitisations which was established by the EUSR when it became applicable on 1 January 2019.

Click here to read the full Legal Update.

For more information about the topics raised in this Legal Update, please contact Merryn Craske on +44 20 3130 3029, Robyn Llewellyn on +44 20 3130 3990 or Mariana Padinha Ribeiro on +44 20 3130 3163.

The European Supervisory Authorities (the “ESAs“) have published an opinion on 25 March 2021 entitled “ESAs’ Opinion to the European Commission on the Jurisdictional Scope of Application of the Securitisation Regulation” (the “Opinion“). The Opinion, which is addressed to the European Commission (the “Commission“), sets out the opinion of the ESAs on the jurisdictional scope of application of the EU Securitisation Regulation and is split into two parts: Part 1, in which it considers the application of Articles 5 to 7 and 9 of the EU Securitisation Regulation to securitisations with third country-based entities, and Part 2, in which it considers the application of the EU Securitisation Regulation’s provisions to investment fund managers. Market participants should note that the Opinion constitutes a set of views and proposals and is not binding.

Click here to read the full Legal Update.

For more information about the topics raised in this Legal Update, please contact Merryn Craske on +44 20 3130 3029, Jaime Lad +44 20 3130 3927, Niamh Nic Uileagóid on +44 20 3130 3843 or Mariana Padinha Ribeiro on +44 20 3130 3163.

On March 23, 2021, Illinois Governor JB Pritzker signed into law Senate Bill 1792, enacting the Predatory Loan Prevention Act (PLPA) and capping interest at an “all-in” 36% APR (similar to the Military Lending Act’s MAPR) for a variety of consumer financing, effective immediately. The PLPA uses an expansive definition of interest for the usury cap’s purposes, applies to a wide array of businesses, and voids any contract that exceeds the rate cap. Companies providing consumer financing in Illinois and secondary market purchasers should review their business practices and ensure that their financing arrangements do not violate the PLPA. We describe the requirements of the PLPA, discuss the transactions and entities subject to (and exempt from) the legislation, consider “true lender” and Madden implications, identify particular products affected, and set out penalties for violations in Mayer Brown’s Legal Update.

Two regulations amending the EU Securitisation Regulation and the Capital Requirements Regulation (the “CRR“) respectively have now come into force. Regulation (EU) 2021/557 of the European Parliament and of the Council (the “SR Amendment Regulation“) and Regulation (EU) 2021/558 of the European Parliament and of the Council (the “CRR Amendment Regulation“, and together, the “Amendment Regulations“), were published on 6 April 2021 in the Official Journal and came into force on 9 April 2021.

The Amendment Regulations, among other things, implement an STS (simple, transparent and standardised) framework for balance sheet synthetic securitisations and make certain amendments with respect to securitisations of non-performing exposures (“NPEs”), both of which are changes which market participants have been keenly awaiting. They also make certain other changes, including amendments to the restrictions on the jurisdictions in which a securitisation special purpose entity (“SSPE”) may be established and setting out a mandate for the European Banking Authority (the “EBA”) to produce a report on sustainable securitisation.

In this Legal Update, we summarise and consider the Amendment Regulations. We note, of course, that the Amendment Regulations are EU regulations and so will not be applicable in the UK, which is now subject to a separate securitisation regime which is similar but not identical. We are not currently aware of any plans by the UK regulators to make corresponding changes to the EU Securitisation Regulation as it now applies in the UK6, or the CRR as it forms part of “retained EU law” in the UK, and so the Amendment Regulations (for now) represent a divergence between the UK and EU regimes.

Click here to read the full Legal Update.

On Thursday (March 26, 2021), Senator Chris Van Hollen (D-MD) introduced a Congressional Review Act (CRA) resolution of disapproval to invalidate the Office of the Comptroller of the Currency’s (OCC) true lender rule. The resolution is co-sponsored by Senate Banking Committee Chair Sherrod Brown (D-OH) and Senators Jack Reed (D-RI), Elizabeth Warren (D-MA), Catherine Cortez-Masto (NV), Tina Smith (D-MN), and Dianne Feinstein (D-CA). Rep. Chuy Garcia (D-IL) participated in the introduction of the resolution, signaling support for the resolution by House Democrats. The Biden Administration has not yet stated its support for the resolution, though President Biden is likely to sign the resolution into law if Congress passes it.

Continue reading on Mayer Brown’s Consumer Financial Services Review blog.

As expected, New York has broadened the reach of its new commercial financing disclosure law less than two months after its enactment. S.B. 5470 imposed a range of Truth in Lending-like disclosure requirements on a variety of commercial financing transactions. On February 16, 2021, New York Governor Andrew Cuomo signed S.B. 898 into law, clarifying and broadening the effect of the previous legislation. Read more about the changes that commercial financers should note in Mayer Brown’s Legal Update.