CFPB Delays Implementation of TRID

On June 24, the Consumer Financial Protection Bureau (CFPB) issued a proposed amendment to delay the effective date of the TILA-RESPA Integrated Disclosure Act, also known as the Know Before You Owe mortgage disclosure rule, until October 3, 2015. The delay is largely due to an administrative error that was made in the rule disclosure and review process.  Press Release.  Proposed Rule.

Agencies Finalize Revisions to Advanced Approaches Risk-Based Capital Rule Applicable to Large International Banking Organizations

On June 16, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency finalized revisions to the regulatory capital rules adopted in June 2013 that apply to certain large, internationally active banking organizations.  The revisions, among other things, correct and update certain aspects of the advanced approaches risk-based capital rule, including the calculation requirements for risk-weighted assets for advanced approaches banking organizations.  Press Release.  Final Rule.

CFTC Extends No-Action Relief to Swap Dealers and Major Swap Participants from Compliance with Reporting Obligations

On June 15, CFTC Division of Market Oversight published a letter extending the time-limited relief provided by previously issued no-action letter 14-90, expiring on June 30, 2015, to  June 30, 2016.  The relief applies to the obligation of Swap Dealers and Major Swap Participants to report valuation data for cleared swaps pursuant to section 45.4(b)(2)(ii) of CFTC's regulations.  Press Release.  Staff Letter.

SEC Requests Public Comments on Exchange-Traded Products

On June 12, the Securities and Exchange Commission announced that it is seeking public comments on issues relating to listing and trading of new, novel, or complex exchange-traded products.  The request for comment addresses key issues that arise when exemptions are sought by a market participant to trade a new product or when a securities exchange seeks to establish standards for listing new products.  The comments may be submitted by August 17, 2015.  Request for Comments.

CFPB Publishes Final Rule that Allows its Supervision of Nonbank Auto Finance Companies

On June 10, CFPB published a final rule today that allows the agency to begin supervising large, nonbank auto finance companies for the first time.  The newly adopted rule will extend the CFPB's supervision to any nonbank auto finance company that makes, acquires or refinances 10,000 or more loans or leases per year.  The CFPB also released the examination procedures that will be used to ensure the auto finance companies' compliance with the law.  Press Release.  Final Rule.  Examination Procedures.

On June 26, Fitch released its updated criteria for rating credit card asset-backed securities.  Report.

On June 23, Fitch released its updated criteria for rating thermal power projects.  Report.

On June 23, Fitch released its updated global criteria assumptions for analyzing the use of lender's mortgage insurance in RMBS transactions.  Report.

On June 23, Moody's published its updated methodology for rating future receivables transactions.  Report.

On June 22, Moody's published its revised methodology for rating securities backed by utility recovery charges.  Report.

On June 16, Moody's published its revised methodology for rating counterparty instrument rating.  Report.

On June 16, Moody's published its revised methodology for rating credit card receivables-backed securities.  Report.

On June 15, Moody's published its revised methodology for rating repackaged securities.  Report.

On June 15, Moody's published its updated methodology for financial statement adjustments.  Report.

On June 12, Fitch released its updated criteria for rating U.S. RMBS transactions.  Report

On June 12, Fitch released its updated criteria for rating issuers that use Distressed Debt Exchanges.  Report.

On June 12, KBRA released its methodology for rating bonds issued by public sector entities and secured by revenues generated form a tax assessment on real property.  Report.

On June 10, DBRS released its updated methodology for rating U.S. structured finance transactions backed by direct pay letter of credit.  Report.

On June 9, DBRS published updated versions of its various methodologies for structured finance products.  Press Release.

On June 9, DBRS published its methodology setting forth consistent approach for application of interest rate stresses applied across all U.S. structured finance methodologies.  Report.

On June 9, Fitch released its updated criteria for rating U.S. non-profit hospitals and health systems.  Report.

Implications for the Imposition of Capital Controls in Greece

Introduction
Following the recent event over the weekend (June 27 - 28), we set out below a short guide on the current status in Greece.

Background
Months of negotiations on a deal to restructure Greece's debts appear to have failed. Greek Prime Minister Alexis Tsipras has called a referendum for July 5, 2015 on the draft bailout proposals (the "Proposals") from the EU. Mr Tsipras government will campaign against the Proposals which required a number of measures relating to VAT increases, budgetary restraints, pension reforms and privatization measures.  On Saturday June 27, 2015 Eurozone finance ministers refused to extend the current EU bailout program which expires on June 30, 2015. In response on Sunday, July 28th, the Greek government announced the imposition of capital controls.  Read More.

MassMutual Motion for Partial Summary Judgment Denied As to 9 of 10 Securitizations

On June 22, 2015, United States District Judge Mark G. Mastroianni of the District of Massachusetts largely denied Massachusetts Mutual Life Insurance Company's ("MassMutual") motion for partial summary judgment seeking to preclude Deutsche Bank Securities Inc. ("DBSI") from asserting a due diligence defense with respect to nine of ten RMBS at issue, rejecting the argument that the due diligence performed was facially inadequate.  Judge Mastroianni granted the motion as to the tenth securitization, based on his finding that there was no evidence that acquisition diligence was conducted on over 80% of the underlying loan pools.

Banks' Motion to Dismiss Commerzbank RMBS Fraud Claims Granted

On June 18, 2015, Justice Marcy Friedman of the New York Supreme Court dismissed RMBS fraud claims brought by Commerzbank AG London Branch ("Commerzbank") against UBS, Nomura Holdings Inc., Barclays Bank PLC, Citigroup and other banks on the grounds that the fraud claims at issue were barred by the statute of limitations.  Ruling for the defendants, Justice Friedman held that New York's six-year statute of limitations started running on the final purchase date, and not when the certificates started sustaining losses.  She also found, in the alternative, that New York's two-year discovery period for fraud claims was triggered when all the certificates at issue were downgraded.  Commerzbank had alleged that the defendant banks had intentionally included toxic loans in securitizations.

IAIS Consults On Higher Loss Absorbency Requirement For Global Systemically Important Insurers

On June 25, 2015, the International Association of Insurance Supervisors (IAIS) published a consultation paper on the higher loss absorbency (HLA) requirement for global systemically important insurers (G-SIIs), seeking feedback on several options relating to the design, development and calibration of the HLA.

The primary purpose of the HLA is to help reduce the probability and impact on the financial system of the distress or failure of a G-SII. When the HLA requirement is implemented G-SIIs will be expected to hold regulatory capital that is not less than the sum of the required capital amounts from the basic capital requirements (BCR) and the HLA.

The HLA is to be delivered to the G20 for endorsement in November 2015 and will apply to G-SIIs from 2019.

The consultation closes on August 21, 2015.

ISDA'S Standard Initial Margin Model (SIMM) For Uncleared Derivatives: Draft Documents

On June 19, 2015, the International Swaps and Derivatives Association, Inc. (ISDA) published three draft documents relating to its proprietary Standard Initial Margin Model (SIMM) for non-cleared derivatives. The SIMM project aims to provide a common methodology for the calculation of initial margin.

The draft SIMM documents comprise:

• Discussion Document: Uncleared Initial Margin Calculations and Processes Related to the ISDA Working Group on Margin Requirements (WGMR) SIMM Initiative - outlining current implementation challenges surrounding risk-based uncleared margin.
• ISDA SIMM Methodology: Version 2.12 - describing the calculations and methodology for calculating initial margin under the ISDA SIMM for uncleared derivatives.
• ISDA SIMM Methodology: Risk Data Standards, Version 1.12 - setting standards for the details of risk calculation and data exchange and proposing a common standard for interchange of SIMM risk between participants.

EBA Updates Single Rulebook Q&As: June 26, 2015

On June 26, 2015, the European Banking Authority (EBA) updated its Q&As on the single rulebook, publishing eight new questions.

The single rulebook Q&As relate to the CRD IV package of reforms (that is, the CRD IV Directive (2013/36/EU) and the Capital Requirements Regulation (Regulation 575/2013) (CRR) and the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD)).

The question IDs and topics for the new answers published are:

• ID: 2014_889: Definition of Additional Tier 1 instruments for the purposes of Article 141 of the CRD IV Directive.
• ID: 2014_1415: Significance of the term "without prejudice" in Article 86 of the CRR.
• ID: 2015_1741: Exemption of deduction under transitional arrangements. Calculation of the threshold of Article 470 of the CRR.
• ID: 2014_1665: Inconsistencies in FINREP validation rules for allowances and provisions for impaired debt instruments, defaulted guarantees and defaulted commitments.
• ID: 2015_1855: Reporting of secured lending if an institution has no possession of collateral.
• ID: 2015_2034: FINREP: reporting of accumulated changes in fair value due to credit risk and FINREP sign convention.
• ID: 2014_1011: Basel I floor.
• ID: 2015_1740: Excess of deductions from AT1 items over AT1 capital that must be deducted from CET1, but is caused by the impact of transitional arrangements.

Orrick Breakfast Briefing: BitLicense and the Virtual Currency Regulatory Landscape

What does the BitLicense require and how will the newly finalized New York State BitLicense regulations affect participants in the virtual currency space?  In addition to BitLicense, what regulatory requirements are being developed or imposed in other jurisdictions?  This program is meant to inform businesses, investors, entrepreneurs, lawyers and others on the state of virtual currency regulation. New York CLE credit will be offered.

Date: Monday, July 20
Location: Orrick's New York Office 

To register for this event, please click here​​.​​