On October 21, 2009, President Obama announced a series of measures aimed at improving access to credit by small businesses. These programs would provide lower-cost capital to community banks and would increase the maximum Small Business Administration (SBA) loan sizes. Importantly, only the general terms of these programs were released by the Obama administration; the U.S. Treasury Department (Treasury) will release specific terms for the capital program in the near future, following consultation with community banks and the small business community. [Read more →]

On October 15, 2009, the U.S. House Committee on Financial Services (“HCFS”) approved its version of the Over-the-Counter Derivatives Markets Act of 2009 (the “HCFS Approved Legislation”).  The HCFS Approved Legislation would require the regulation of the over-the-counter (“OTC”) derivatives marketplace, including transactions, products and participants.  [Read more →]

The Federal Reserve Board has announced in Consumer Affairs Letter 09-8 that it will implement a consumer compliance supervision program involving nonbank subsidiaries of bank holding companies (BHCs) and foreign banking organizations (FBOs). This compliance supervision program will include activities covered by the consumer protection laws and regulations the Federal Reserve has the authority to enforce. [Read more →]

On August 11, 2009, the U.S. Treasury Department delivered comprehensive legislation to Congress calling for the regulation of the over-the-counter (“OTC”) derivatives market.  Below is a summary of key provisions of the “Over-the-Counter Derivatives Markets Act of 2009” (the “Proposed Act”). [Read more →]

The American Reinvestment and Recovery Act of 2009 (ARRA) authorizes the Department of Treasury to award $2.3 billion in tax credits for qualified investments in advanced energy projects, to support new manufacturing facilities.  The tax credit, known as the Advanced Energy Manufacturing Tax Credit (MTC) or the Section 48C credit, provides a 30% credit for the qualified costs of investments in new, expanded, or re-equipped renewable energy manufacturing projects located in the United States.  [Read more →]

The credit crisis that gripped U.S. and global markets and the subsequent recession have created fresh investment opportunities for private equity funds.  Traditionally, private equity funds were discouraged from investing in banking institutions by two primary factors: (1) high entity valuations dominated the banking industry, and (2) significant investments in banking institutions could trigger considerable regulatory burdens.  However, recently announced regulatory policy changes and significant declines in stock prices across the financial industry have combined to create a more attractive environment for private equity to invest in banking institutions.  [Read more →]

Continuing his intense criticism of the Treasury Department’s management of the Toxic Assets Recovery Program (TARP) and other federal commitments under the 2008 Emergency Economic Stabilization Act (the Bailout), Neil Barofsky, Special Inspector General for TARP (SIGTARP), issued his second quarterly report on July 21, 2009, purporting to demonstrate, contrary to Treasury’s position, that TARP recipients can meaningfully describe how TARP funding has affected their lending and other operations. [Read more →]

The Department of the Treasury and the Department of Energy have issued guidance regarding the rules for obtaining a grant from Treasury (“section 1603 program”) in lieu of a production tax credit under section 45 of the Internal Revenue Code (“Code”) or an investment tax credit under Code section 48.  Under this program, which was enacted as part of the American Recovery and Reinvestment Act, the Department of the Treasury makes payments to eligible persons who place in service specified energy property and apply for such payments.   [Read more →]

In a far reaching decision delivered on June 29, 2009, the U.S. Supreme Court in Cuomo v. Clearing House Association, LLC,
et al., severely limited the extent to which national banks and their operating subsidiaries are exempt from compliance with state laws, such as fair lending and other consumer laws. The court struck down a regulation adopted by the Office of the Comptroller of the Currency purporting to preempt state law enforcement actions as an unreasonable extension of the preemption statute, 12 USC § 484(a), which in part provides: “no national bank shall be subject to any visitorial powers except as authorized by federal law, [or] vested in the courts of justice . . . .” [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. To that end, the United States Department of the Treasury released the General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals (the “Tax Proposals”) on May 11, 2009. [Read more →]