Category Archives: Commercial Lending

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HUD Issues Final Rule on the Fair Housing Act’s Disparate Impact Standard

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

CFPB Releases Small Business Lender Compliance Cost Survey to Aid in Dodd-Frank 1071 Rulemaking

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

New Mortgage Licensing Requirements Come to the West

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

FTC and NY AG Target Merchant Cash Advance Companies

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

Dodd Frank 1071 Update: CFPB Status Report Sheds Light on Implementation

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

Lender Liability and False Claims Act Issues Under the Paycheck Protection Program

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

Pre-Bankruptcy Automatic Stay Waivers – More Valuable Than Ever These Days?

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

Individual Employs New Small Business Bankruptcy Law to Modify Mortgage

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

Ginnie Mae Announces PTAP Assistance for Issuers

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

Foreclosure in the Times of COVID-19: Some Texas Counties Halt Foreclosures for April Amid Coronavirus Concerns

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

Federal Reserve Implements Aggressive Liquidity Campaign as Growing Corporate Debt Threatens to Exacerbate COVID-19 Economic Toll

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

Federal Regulatory Agencies Offer Interagency Statement Regarding COVID-19-Related Loan Modifications and Status Reporting

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

COVID-19 Ripple Effects Are Coming – Lenders Must Get Ready

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

Ready or Not, Section 1071 is Coming: The Upcoming Implementation of Dodd-Frank’s Women and Minority-Owned and Small Business Reporting Requirements

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

CFPB Issues Final HMDA Rule Offering Relief to Smaller Institutions and Credit Unions

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

National Credit Union Administration Encourages Banking Hemp Businesses — With Some Caveats

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

The Small Business Reorganization Act – A New Subchapter for Small Businesses

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

HUD Proposed Rule Demands More Disparate and More Impact to Establish Disparate Impact Liability

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

A Cannabis Banking Bill, Sitting on Capitol Hill

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

Some of Florida’s Regulatory Restrictions on the Cannabis Industry Could Soon Be a Thing of the Past

On January 17, 2018, Florida’s new governor, Ron DeSantis, delivered news that could supercharge the growth of Florida’s medical-cannabis industry. Governor DeSantis indicated he may drop the State’s appeal from a trial court’s ruling that the statutory cap on the number of licenses for “medical marijuana treatment centers” (MMTCs), and the requirement that MMTCs be … Continue Reading

Safe Streets Alliance v. Hickenlooper Provides Good News, Bad News, and Instructions to the Cannabis Industry and the Financial Institutions Serving It

For years, the “legal” cannabis industry – operating in states that have legalized cannabis under state law despite its long-standing prohibition under federal law – and the financial institutions that serve the industry have closely watched Safe Streets Alliance v. Hickenlooper. In Hickenlooper, Safe Streets Alliance, a “nonprofit organization devoted to reducing crime and illegal … Continue Reading

O Canada! What Canada’s Nationwide Legalization of Cannabis Means for American Financial Institutions

Today marks a significant shift in cannabis policy, both domestically and internationally, as Canada becomes the first industrialized nation in the world, and only the second nation overall, to legalize cannabis. This follows the passage of The Cannabis Act in June of this year, which legalized cannabis at all levels of government. With this blessing … Continue Reading

Upending Trade Finance through Blockchain Technology

Trade finance, in both domestic and international financial transactions, is often utilized when one company seeks to import a shipment of goods from a supplier (or exporter). These transactions comprise an enormous amount of global trade. It is estimated that approximately 80 to 90 percent of world trade relies on trade finance. In fact, almost … Continue Reading
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