In addition to the previous announcement that commercial mortgage-backed securities (CMBS) issued on or after January 1, 2009 are eligible collateral under the TALF, the Federal Reserve has announced that certain high-quality commercial mortgage-backed securities issued before January 1, 2009 (legacy CMBS) will become eligible collateral. [Read more →]

In the aftermath of the capital market, credit market and banking crises that have gripped the U.S. economy, President Obama and his administration have called for broad reforms of the American financial system.  President Obama recently suggested that a “more vigorous regulatory regime” would restore confidence in the American financial system and attract foreign capital to U.S.-based investments.  To that end, three notable bills have been introduced since Obama’s inauguration on January 20, 2009.  [Read more →]

Today, May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act, authorizing more than $280 million for federal fraud enforcement and specifically expanding the reach of federal fraud statutes.  With the powers now being aggressively exercised by the Special Inspector General for the Toxic Asset Recovery Program, and the mandate issued to the inspectors general of all funding agencies under the American Recovery and Reinvestment Act,  criminal, civil and administrative scrutiny of the use and accounting for all federal funding and private lending practices will be intense.  [Read more →]

On March 31, 2009, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the “Councils”) issued interim regulations implementing the Buy American restrictions of the American Recovery and Reinvestment Act of 2009 (“Recovery Act”).  These rules form a new section of the Federal Acquisitions Regulations (“FAR”) and add four new contract clauses to be included as appropriate in solicitations involving Recovery Act funds.  Comments on the interim FAR rules will be accepted through June 1, 2009 for consideration in the formulation of final rules.  Final rules will be issued once all comments are reviewed and the Councils finalize any modifications to the interim rules.  It is not certain how long it will be before the final rules are issued.   [Read more →]

The Treasury Department announced that the results of its comprehensive bank stress tests will be made available soon. The comprehensive stress tests and other traditional methods of evaluating bank performance are yielding results that some banks will find of critical importance in dealing with regulators, their customers and their shareholders. The public disclosure of this information by Treasury complicates matters. During this critical time, financial institutions in crisis need to focus on four key areas among the many challenges they face. [Read more →]

On April 24, 2009 President Obama signed an amendment to the Economic Stabilization Act of 2008 adding specific powers to those given in the Act to the Special Inspector General for the Toxic Asset Recovery Program (“SIGTARP”). [Read more →]

On May 1, the Federal Reserve Board announced the expansion of the TALF program to include commercial mortgage-backed securities (CMBS) and securities backed by insurance premium finance as eligible collateral, with the first subscription date scheduled for late June.  In addition to the Public-Private Investment Program, the expansion is designed to address potential defaults on commercial properties while supporting the issuance of new loans.  [Read more →]

By its Interim Guidance issued in April 2009, The Office of Management and Budget (”OMB”) has significantly clarified the meaning of the President’s March 20, 2009 Memorandum setting rules for registered lobbyists’ contacts with federal officials involved in Recovery Act funding.  As shown in the linked copies below, OMB’s Interim Guidance includes descriptions, definitions and a set of Frequently Asked Questions (“FAQs”). [Read more →]

Created by the Economic Stabilization Act or 2008, the Special Inspector General for the Troubled Asset Recovery Program (“SIGTARP”) has the powers to audit and investigate TARP awards and to make recommendations to the Treasury Department on how it should manage TARP programs.  Acting with the attention of the Congress, oversight over Treasury, the authority to deal directly with TARP recipients, and the required cooperation of the Federal Reserve, the Securities and Exchange Commission and federal and state law enforcement, SIGTARP Neil Barofsky has a broad jurisdiction and extensive powers.  While his formal power of compulsion ends with court-enforced subpoenas and he must refer criminal matters for prosecution to the Department of Justice, in two months of activity, he has initiated 20 criminal investigations, audited the use of TARP funds and the executive compensation of its 364 recipients, and set a schedule of audits and investigations across the spectrum of TARP programs. [Read more →]

The New York Fed has announced that the next TALF subscription date will be May 5, with loan settlement dates on May 12.  As always, interested borrowers may obtain a pre-certification review by the New York Fed in advance of the next subscription date by having their primary dealer submit their name and details of the loan desired. [Read more →]