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

It is widely anticipated that the London Interbank Offered Rate (“LIBOR”) will be discontinued in 2021. As LIBOR commonly is used as an index rate for both residential mortgage and consumer loans, its discontinuance has the potential to have a significant impact on lenders, servicers, and consumers. In this Legal Update, we discuss the legal

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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Happy New Year!

Like many of you, we have been tuning into the various predictions for ABS issuance in 2020 from the rating agencies, analysts and other market participants.  Will this year bring “more of the same” for US ABS, as predicted by KBRA, or will US ABS volume be down slightly as predicted by

On 22 October 2019, Mayer Brown’s supply chain and working capital finance team hosted its annual Supply Chain and Working Capital Finance seminar in London.  Now in its third year, the seminar brought together key members of Mayer Brown’s supply chain and working capital finance team from around the world as well as over 100

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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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…”


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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.

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