On June 17, 2021, President Biden signed Senate Bill 475 into law, making “Juneteenth” a federal holiday. Because June 19th (tomorrow) falls on a Saturday this year, the day will be observed by federal government offices on June 18, 2021 (today).

Continue Reading Immediate Enactment Of Juneteenth As A Federal Holiday Will Have Significant Impact On Mortgage Lenders And Other Consumer Lenders

On June 10, the Federal Trade Commission (FTC) filed an amended complaint for civil money penalties and other relief under Section 5 of the FTC Act prohibiting “unfair or deceptive acts or practices” and Section 521 of the Gramm-Leach-Bliley Act (GLBA) prohibiting the use of fraudulent statements to obtain consumer information.  Setting aside the substance of the allegations, the amended complaint is informative because while the initial complaint sought consumer redress under Section 13(b) of the FTC Act, the Supreme Court’s recent unanimous decision in AMG Capital Management foreclosed this avenue to consumer redress for the FTC, and thus the amended complaint removes that reference while otherwise replicating the substantive allegations of the initial complaint.  Further, in a creative side-step to its Section 13(b) predicament, the FTC claims authority to obtain civil penalties under the GLBA because it empowers the FTC to enforce it “in the same manner and with the same power and authority as the [FTC] has under the Fair Debt Collection Practices Act [FDCPA].”  15 U.S.C. § 6822(a).  In 2010, the Dodd-Frank Act amended the FDCPA stating that violations may be enforced “in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.”  15 U.S.C. § 1692l(a).
Continue Reading FTC Takes Novel Approach to Seek Civil Money Penalties in the Wake of AMG Capital Ruling

The U.S. Court of Appeals for the Second Circuit recently held that a debt collector’s settlement offer must indicate whether interest and fees are continuing to accrue on the outstanding debt, or alternatively, whether payment of the settlement amount by a specified date will constitute full satisfaction of the debt.  The plaintiff allegedly incurred credit card debt that was placed with defendant debt collection company.  The defendant mailed plaintiff a collection notice offering to settle the debt.  The plaintiff sued the debt collection company by claiming that the notice violated Section 1692e of the Fair Debt Collection Practices Act (FDCPA) “by failing to disclose that interest was continuing to accrue on his balance.”
Continue Reading Second Circuit Reverses Ruling in FDCPA Case

The House Select Subcommittee on the Coronavirus Crisis recently announced an investigation into the role of four Fintech companies and partner banks in issuing allegedly fraudulent Paycheck Protection Program (PPP) loans.  The Subcommittee’s press release references certain reports that the Fintech industry and its bank partners “have been linked to a disproportionate number of fraudulent PPP loans . . . raising questions about whether FinTechs and their bank partners have adequately screened PPP loan applications for fraud.”  This announcement builds on the Subcommittee’s March 25 findings that the Treasury Department and SBA failed to institute adequate safeguards to prevent waste, fraud, and abuse in pandemic relief programs, leading to nearly $84 billion in potentially fraudulent loans.
Continue Reading House Subcommittee Launches Investigation into FinTech Companies’ Role in Allegedly Fraudulent PPP Loans

On April 29, 2021 Governor Newsom signed California A.B. 80, largely conforming to Federal rules relating to deductibility of expenses paid with funds from forgiven Paycheck Protection Program (PPP) loans.  The $150,000 limitation in prior versions of A.B. 80 was removed, and replaced with a requirement that only non-publicly traded companies who reported losses of at least 25% in gross receipts during one quarter of 2020 can deduct such expenses.  That 25% decrease in gross receipts was also a condition for receiving a PPP loan in the second round of loans made available in late 2020.  Publicly traded companies cannot deduct any amount of expenses paid with funds from forgiven PPP loans.

Continue Reading California Largely (But Not Fully) Conforms to Deductibility of Expenses Paid with Forgiven PPP Loans

OK, so you’re a sophisticated lending attorney in Metropolis who is comfortable with everything from aircraft financing to syndicated loans secured by casinos in Macau. Yet you feel a twinge of uncertainty when a business loan is to be secured by wine inventory made from grapes grown in both California and Washington. You know intuitively that anytime farmers, ranchers or food processors are in the mix, either as a borrower or a supplier to the borrower, the underwriting and documentation challenges are not uniform on a state-by-state basis, and are compounded by an overlay of federal laws designed to protect growers of perishable crops and providers of livestock. To get a reality check, you sometimes will secretly call your law school classmate who oddly returned to Smallville and now represents its one bank.
Continue Reading Farm Lending Pitfalls For Urban Lawyers

The 2021 increase to California’s homestead exemption to up to $600,000 stands to change the legal and economic relationship of guarantors with their lenders and vendors who make loans or sell goods or services on credit.  Before examining this important change in California’s homestead exemption and its effect on guaranties, some perspective is needed on guaranties themselves.
Continue Reading It’s Time to (Carefully) Secure that Guaranty

On January 19, 2021, the U.S. Small Business Administration (SBA) published its 28th Interim Final Rule (Forgiveness IFR) covering the loan forgiveness requirements and review procedures for the Paycheck Protection Program, as reauthorized and amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act), and as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time prior to the enactment of the Economic Aid Act, including the Paycheck Protection Program and Health Care Enhancement Act, the Paycheck Protection Program Flexibility Act, applicable federal regulations and interpretive guidance issued by the SBA and U.S. Department of Treasury (the CARES Act)).
Continue Reading New Interim Final Rules Re: PPP Loan Forgiveness Requirements and Review Procedures as Amended by Economic Aid Act