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On March 23, 2020, the Federal Reserve Bank of New York (“FRBNY”) established the Term Asset-Backed Securities Loan Facility (“TALF 2.0 Program”) to support the flow of credit to consumers and businesses. The FRBNY expects that the TALF 2.0 Program will enable the issuance of asset-backed securities (“ABS”) backed by underlying credit exposures in specified

On January 30, 2020, five federal financial regulatory agencies published the long awaited notice of proposed rulemaking (the “NPR”) to revise certain aspects of the Volcker Rule (Section 13 of the Bank Holding Company Act) with respect to the treatment of covered funds.  The NPR follows over 2 ½ years of the agencies’ consideration of changes to the Volcker Rule, which was originally prompted by the June 2017 Treasury Report that solicited changes to ease the compliance burden on banks.  The NPR includes several changes
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Since its adoption in 2010, the Federal Deposit Insurance Corporation’s (the “FDIC”) securitization safe harbor rule, 12 C.F.R. § 360.6 (the “Rule”), which relates to the treatment of financial assets transferred in connection with a securitization or participation transaction, has required that securitization documents require compliance with Regulation AB of the Securities and Exchange Commission (“SEC”), 17 C.F.R. §§ 229.1100 et. seq. (“Regulation AB”) even in circumstances where Regulation AB by its terms would not apply to the issuance of obligations backed by such financial assets.   On January 30, 2020, the FDIC finalized and adopted changes (the “Adopted Change”) to certain provisions of the Rule to eliminate such requirement where Regulation AB would not otherwise apply to the related securitization transaction.  
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A United States Magistrate Judge for the United States District Court, Western District of New York, today issued his report and recommendation on the defendants’ motion to dismiss in Petersen et al. v. Chase Card Funding, LLC et al., No. 1:19-cv-00741 (W.D.N.Y. June 6, 2019).  The Magistrate Judge recommended dismissal of both the plaintiffs’ usury and unjust enrichment claims on preemption grounds, stating that “the preemption analysis boils down to this: does the application of New York’s usury statutes to these defendants ‘prevent’ or ‘significantly interfere’ with Chase USA’s power to sell or assign the receivables generated by its credit card accounts?”.  The Magistrate Judge answered this question in the affirmative, reasoning that “since applying New York’s usury statutes to defendants would prevent Chase USA’s ability to sell or assign the receivables from its credit card accounts, they are preempted.”

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In July, the Federal Deposit Insurance Corporation (the “FDIC”) proposed a change (discussed here and here) to certain provisions of its securitization safe harbor rule (the “Rule”) to eliminate the requirement that the securitization documents for non-grandfathered bank-sponsored securitizations not otherwise subject to Regulation AB (i.e. non-public transactions) require compliance with the disclosure and periodic reporting requirements of Regulation AB.   If adopted in its proposed form, this would significantly ease the compliance burden associated with non-public bank-sponsored ABS issuances, potentially resulting in a greater volume of such transactions.

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In July, the Federal Deposit Insurance Corporation (the “FDIC”) proposed a change (discussed here) 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.  The proposed change would eliminate the requirement under the Rule that disclosure documents for bank-sponsored securitizations not otherwise subject to Regulation AB’s disclosure requirements (i.e. non-public transactions) comply with Regulation AB.   This could significantly ease the compliance burden associated with non-public bank-sponsored ABS issuances, potentially resulting in a greater volume of such transactions.

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California law restricts the types of instruments in which California cities, districts and other local agencies can invest public funds. Previously, among other requirements, Section 53601 of the California Government Code provided that these municipalities could only invest public funds in asset-backed securities and mortgage-backed securities when (i) issued by an issuer rated at least “A” or its equivalent for its debts by a nationally recognized statistical rating organization (an “NRSRO”) and (ii) such securities had a maximum maturity of five years or less. As described in the Local Agency Investment Guidelines issued by the California Debt and Investment Advisory Commission (available here), Section 53601 has been amended to both (i) eliminate the requirement that a securities issuer be rated at least “A” or its equivalent and (ii) revise the maximum maturity provision to require that asset-backed securities and mortgage-backed securities have a maximum remaining maturity of five years or less, as determined when the municipality acquires the investment.
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The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) requires the CFPB to prepare a biennial report to Congress regarding the consumer credit card market. On August 27th, the CFPB issued its fourth such report (previous reports were issued in 2013, 2015 and 2017) which describes the CFPB’s findings regarding, among other things, the