On May 15, House Democrats passed on the Heroes Act, a $3 trillion package that revives, among other things, many of the severe debt collection-related restrictions House Democrats have been pushing since the start of the pandemic.  Although the Heroes Act has no promise of becoming law, the Act, combined with other federal and state debt collection proposals and emergency regulations, may inform future legislative and regulatory proposals as temporary financial services relief programs come to an end. In this Legal Alert, we analyze the various federal and state debt collection-related actions that may offer a glimpse into the future of debt collection as we know it.


Read more at Mayer Brown’s Legal Update.

On May 12, 2020, the Federal Reserve Bank of New York announced the issuance of updated Terms and Conditions and a Frequently Asked Questions document (the “FAQs”) regarding the 2020 Term Asset-Backed Securities Loan Facility (“TALF 2020”). In this Legal Update, we discuss several aspects of the updated TALF 2020 documents with particular relevance to CLOs, including several welcome improvements and a few drawbacks.

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For more information about the topics raised in this Legal Update, please contact Ryan Suda, J. Paul Forrester, Joanna C. Nicholas, Keith F. Oberkfell, Arthur S. Rublin or Sagi Tamir.

On May 12, 2020, the Federal Reserve Bank of New York (the “Fed”) issued new Frequently Asked Questions and a revised term sheet in connection with the Term Asset-Backed Securities Loan Facility (“TALF 2020”). This Legal Update summarizes the FAQs and the revised term sheet, highlighting key changes and noting where further information or materials may be forthcoming from the Fed.

Key Highlights:

  • The revised term sheet and FAQs clarified that investment funds may be eligible borrowers;
  • The Fed will provide monthly public disclosures identifying TALF borrowers, their “Material Investors” (i.e., any direct or indirect owner of 10% or more of any outstanding class of securities of such borrowers), amounts borrowed, interest rates and other information;
  • TALF borrowers must certify that they are unable to secure adequate credit accommodations from other banking institutions;
  • No new asset classes have been added; the FAQs include detailed requirements for CLOs, CMBS and other eligible assets;
  • Only S&P, Moody’s and Fitch are eligible rating agencies under TALF 2020;
  • Collateral review, issuer certifications, auditor assurances and SBA loan documentation have not yet been detailed; and
  • The operational starting date for TALF 2020 has not yet been announced, and a form of the Master Loan and Security Agreement has not been provided.

Continue Reading for the full summary and analysis

For more information about the topics raised in this Legal Update, please contact James J. Antonopoulos, Amanda L. Baker, Christy L. Freer, Julie A. Gillespie, Carol A. Hitselberger, Melissa L. Kilcoyne, Stuart M. Litwin, Lindsay M. O’Neil, Eric M. Reilly, Jan C. Stewart, Ryan Suda or Angela M. Ulum.

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On May 12, 2020, the Federal Reserve (Fed) published updates to the term sheet for the Term Asset-Backed Securities Loan Facility (the TALF), and FAQs regarding the TALF, including additional details regarding borrower and collateral eligibility. Continue Reading Federal Reserve Releases TALF FAQs: Here are the Highlights

On April 30, 2020, the Federal Reserve Board announced expanded loan offerings and terms for the forthcoming Main Street Lending Program. Among other changes, Main Street is now open to larger businesses with up to 15,000 employees or $5 billion in 2019 annual revenue (previously up to 10,000 employees or $2.5 billion in 2019 annual revenue). The minimum size of certain loans was also reduced to $500,000 from $1 million to help provide assistance to smaller businesses. This Legal Update provides an overview of these and other revisions to the program.

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For more information about the topics raised in this Legal Update, please contact Adam C. WolkLogan S. PayneJeffrey P. TaftFrederick C. FisherMatthew D. O’MearaRyan SudaJoanna C. NicholasArthur S. RublinEric T. Mitzenmacher or Alexander J. Warents.

The Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) is now available to non-bank PPP lenders to finance Paycheck Protection Program (“PPP”) loans that they originated or purchased.  While the PPPLF was previously only available to depository institutions to finance PPP loans that they originated, the Federal Reserve revised its eligibility criteria on April 30, 2020 to provide funding to all Small Business Administration (“SBA”) approved lenders.[1]  Terms of the PPPLF are discussed in our earlier blog post.

Continue Reading PPPLF Now Open to Non-Banks and for Purchased PPP Loans

Non-bank lenders providing struggling small businesses a lifeline through forgivable Paycheck Protection Program (“PPP”) loans may soon have access to the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) to support their lending operations.  The Federal Reserve issued a term sheet for the PPPLF on April 9, 2020, indicating its intention to provide capital to lenders participating in the flagship small business relief program established by the Coronavirus Aid, Relief, and Economic Stability (“CARES”) Act by extending credit secured by  PPP loans on a short-term basis at favorable economic terms.[1]  The PPPLF is only available to finance PPP loans originated by the PPP lender. While the PPPLF is currently only available to depository institutions, the Federal Reserve has now announced that it is working to provide access to other PPP lenders “as soon as possible.”[2]

Continue Reading Federal Reserve Signals Progress Toward Desperately Needed Non-Bank Access to Paycheck Protection Program Liquidity Facility (PPPLF)

In statements made yesterday on “Squawk Box” on CNBC, Secretary Mnuchin said:

“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness.”

Continue reading on Mayer Brown’s Covid-19 Response Blog.

In FAQ #31 posted on April 23, 2020, the US Small Business Administration offered the following clarification (italics added):

31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.

Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.

The referenced certification had generated a significant number of questions from potential applicants and the inherent uncertainty has caused some not to proceed. Whether this “clarification” and the related applicant’s consideration of “current business activity and [its] ability to access other sources of liquidity sufficient to support [its] ongoing operations in a manner that is not significantly detrimental to the business” provides any greater certainty is unclear.


If you wish to receive periodic updates on this or other topics related to the pandemic, you can be added to our COVID-19 “Special Interest” mailing list by subscribing here. For any other legal questions related to this pandemic, please contact the Firm’s COVID-19 Core Response Team at FW-SIG-COVID-19-Core-Response-Team@mayerbrown.com.

There has been increasing discussion with respect to the accounting treatment of trade payable programs and whether the obligations of the entity that owes the receivable (the “company”) under these programs should continue to be treated as trade payables on their balance sheet or, instead, be reflected as Continue Reading Accounting and Rating Agency Treatment of Supply Chain and other Trade Payables Programs