The Florida Supreme Court rang in the New Year by casting a blow to lenders and loan servicers in Florida seeking to avoid the entry of attorneys’ fees judgments in borrowers’ favors where the borrowers successfully argued the plaintiff lacked standing to foreclose. On December 31, 2020, the court issued its opinion in Page v. … Continue Reading
On February 4, 2021, acting CFPB Director Dave Uejio published a blog post sharing statements recently made to the staff of the CFPB’s Division of Research, Markets, and Regulations (RMR). In his post, Uejio stressed two policy priorities for the CFPB: “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis … Continue Reading
This month, a Florida appellate court held that a merchant cash advance (MCA) purchase and sale agreement was not a “disguised loan” and, therefore, was not subject to Florida’s criminal usury statute. MCA purchase and sale agreements, which offer merchants a fast and efficient way to obtain funding for their operations, are not loans. Rather, … Continue Reading
A new year brings new compliance requirements for non-banks and fintechs conducting business in New York, including Merchant Cash Advance (MCA) companies. On December 23, 2020, New York Gov. Andrew Cuomo signed SB5470 expanding the New York Financial Services law to require non-banks and fintechs to provide small businesses with lending disclosures similar to those … Continue Reading
On October 24, 2020, the U.S. Department of Housing and Urban Development’s (HUD) final rule on the implementation of the Fair Housing Act’s disparate impact standard was scheduled to become effective. That effective date was short lived: on October 25, 2020, the U.S. District Court for the District of Massachusetts entered a preliminary injunction staying … Continue Reading
On September 3, 2020, the U.S. Department of Housing and Urban Development (HUD) issued its final rule on the implementation of the Fair Housing Act’s disparate impact standard. The Fair Housing Act (FHA) prohibits discrimination in many housing-related activities on the basis of race, color, religion, sex, disability, familial status, and national origin. For at … Continue Reading
Recently, the CFPB released an online survey designed to collect information from “institutions engaged in small business financing” regarding one-time costs of compliance with Dodd-Frank 1071. Section 1071 of the Dodd-Frank Act, which we have discussed in detail on this blog, creates robust reporting requirements for lenders engaged in lending to women-owned, minority-owned, and small … Continue Reading
During this pandemic, both Idaho and South Dakota have been busy adding new mortgage licensing requirements. As discussed below, these new licensing requirements will materially impact mortgage lenders and servicers doing business in these states. Idaho Earlier in 2020, Idaho passed H0401, which amended the definition of “mortgage lender” to include mortgage companies that engage … Continue Reading
On June 10, 2020, the Federal Trade Commission and the New York Office of the Attorney General filed actions against two merchant cash advance (MCA) companies – RCG Advances and Ram Capital Funding – and individuals associated with both companies in the Southern District of New York and the Supreme Court of the State of … Continue Reading
In January, we discussed the upcoming implementation of Section 1071 of the Dodd-Frank Act, which amends the Equal Credit Opportunity Act to require certain reporting requirements for specific categories of business loans. The implementation of Section 1071, which contains reporting and disclosure requirements that are comparable to the Home Mortgage Disclosure Act (HMDA), through an … Continue Reading
Among the most significant aspects of the CARES Act is the $660 billion small business forgivable loan program known as the Paycheck Protection Program (PPP), and it was perhaps inevitable that the administration of the program would be followed by a wave of related litigation. Already, the PPP application process has generated lawsuits over the … Continue Reading
In the very unusual period in which we find ourselves today, it seems to be common wisdom that an avalanche of commercial loan defaults is coming. As such, it is a good time to take a fresh look at the terms and provisions used in commercial workout documents, whether in a simple agreement that extends … Continue Reading
Small businesses often struggle to reorganize in bankruptcy. To address this issue, Congress passed the Small Business Reorganization Act of 2019 (the SBRA). The SBRA took effect in February 2020 and makes small business bankruptcies faster and less expensive. The recent case of In re Ventura, 2020 WL 1867898 (E.D.N.Y. Apr. 10, 2020) addresses many … Continue Reading
In an All Participants Memo dated April 10, 2020 (APM 20-03), Ginnie Mae announced that it revised and expanded its issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide) to include a Pass-Through Assistance Program (PTAP) in response to the COVID-19 national emergency declaration. The program announced in APM 20-03 … Continue Reading
Many of Texas’ largest counties have suspended foreclosures for the month of April amid coronavirus (COVID-19) concerns, including the state’s two largest counties, Harris and Dallas. Texas Gov. Greg Abbott, however, has yet to issue an executive order or make a general proclamation cancelling all foreclosures statewide. Likewise, the Texas Supreme Court has also declined … Continue Reading
In response to the recent COVID-19 outbreak, Congress recently approved a $2 trillion stimulus package in an attempt to offset the potentially disastrous economic effects of COVID-19. Meanwhile, central banks are implementing increasingly drastic measures aimed at preserving the availability of capital during the looming recession, which appears increasingly imminent as the global economy remains … Continue Reading
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, and the Conference of State Bank Supervisors issued an Interagency Statement on March 22 urging regulated financial institutions to work with borrowers affected … Continue Reading
The coronavirus pandemic is affecting businesses large and small. Now is the time for lenders to prepare for its effect on business borrowers. Industries Already in Distress In February, a PricewaterhouseCoopers (PwC) report identified five industry sectors likely to see the greatest restructuring activity in 2020: Energy Retail Dining and food service Auto suppliers Specialty … Continue Reading
As part of the 2010 Dodd-Frank Act, Congress enacted Section 1071, which amended the Equal Credit Opportunity Act to mandate certain reporting requirements for lenders making business loans. The act aims to “facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of … Continue Reading
The Consumer Financial Protection Bureau (CFPB) issued its long-awaited final rule amending the Home Mortgage Disclosure Act (HMDA) on Thursday, October 10. These changes promise to bring some measure of relief to smaller financial institutions and credit unions. Prior to this new rule, the CFPB did not require the collection and reporting of HMDA data … Continue Reading
In December 2018, Congress gave the hemp industry a significant boost by passing the 2018 Farm Bill, which legalized the cultivation and sale of hemp (i.e., cannabis with a THC content of less than .3%). The 2018 Farm Bill tasked the United States Department of Agriculture (USDA) with formulating the regulations to govern this burgeoning … Continue Reading
Since the 2005 amendments to the Bankruptcy Code, small business debtors have continued to struggle to reorganize effectively under Chapter 11 of the Bankruptcy Code. On Friday, August 23, 2019, President Trump signed the Small Business Reorganization Act of 2019 into law in an effort to address some of these issues. The act aims to … Continue Reading
The United States Department of Housing and Urban Development (HUD) released a sweeping proposed rule on August 1 seeking to amend HUD’s interpretation of the Fair Housing Act’s disparate impact standard. According to HUD, the proposed rule is designed to better reflect the U.S. Supreme Court’s 2015 ruling in Texas Department of Housing and Community … Continue Reading
Legislation that would pave the way for financial institutions to transact with cannabis-related businesses operating in states that have legalized marijuana (herein “cannabis-related legitimate businesses”) is quickly working its way through the House of Representatives. The SAFE Banking Act of 2019 was introduced in the House by Rep. Ed Perlmutter (D-CO) on March 7, 2019. … Continue Reading
