Posted on March 26, 2009 by Hunton & Williams LLP Print This Article

Navigating the Public-Private Partnership Investment Program

On March 23, 2009 the U.S. Department of Treasury (“Treasury”), in conjunction with the Federal Deposit Insurance Company (the “FDIC”) and the Federal Reserve (the “Fed”), announced the latest piece of its Financial Stability Plan: the Public-Private Partnership Investment Program for Legacy Assets (the “Program”). The Program consists of two separate plans, addressing two distinct asset groups: the Legacy Loan Program and the Legacy Securities Program. Treasury explained that the exact requirements and structure of the Loan Program will be subject to notice and comment rulemaking, but announced no timetable. On the other hand, the Securities Program requires any interested asset manager to submit by April 10th, an extensive application to serve as a Fund Manager under the Securities Program. Treasury is expected to select five Fund Managers by May 1st. In addition, Treasury expanded the Term Asset-Backed Securities Loan Facility (“TALF”) program to include Legacy Securities.

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Posted on March 24, 2009 by Hunton & Williams LLP Print This Article

Servicing Advance Receivables Now Eligible Collateral Under TALF

On March 19, 2009, the Federal Reserve Bank of New York expanded the list of collateral eligible for pledge under its TALF program to include, among other things, servicing advance receivables. A funding under the TALF program is structured as a loan from the Federal Reserve Bank of New York to an eligible borrower — which includes any U.S. company that owns eligible collateral and maintains an account relationship with a primary dealer.

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Posted on March 13, 2009 by Hunton & Williams LLP Print This Article

FDIC Increases Previously Announced Changes in Assessment Rates

The FDIC has revised its October 7, 2008 Notice of Proposed Rulemaking (“NPR”) to increase deposit assessment rates for all categories of institutions in a Final Rule adopted on February 27, 2009 (the “Final Rule”). The anticipated deposit assessment rate increase has grown materially and has attracted significantly more attention and outrage due to its concurrent release with an interim rule proposing a one-time 20 basis point emergency special assessment. The emergency assessment will be imposed on deposits as of June 30, 2009, which assessment will be collected on September 30, 2009, concurrent with the first assessment collected under the Final Rule. 

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Posted on March 13, 2009 by Hunton & Williams LLP Print This Article

The "Missing Link" Redux: Making Home Affordable

The Obama Administration’s Financial Stability Plan, announced on February 10, 2009, promised to address the foreclosure crisis with a comprehensive plan to stem foreclosures and restructure troubled mortgage loans. That plan, announced on February 18 as the Homeowner Affordability and Stability Plan or “HASP,” included access to low-cost refinancing for qualifying borrowers with conforming loans owned or guaranteed by Fannie Mae and Freddie Mac and a $75 billion homeowner stability initiative to prevent foreclosures. The details of the homeowner stability initiative, which would include a plan to encourage servicers to modify loans of homeowners who are delinquent on their loans or who are in danger of becoming delinquent, were to be released in early March.

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Posted on March 12, 2009 by Hunton & Williams LLP Print This Article

With Apologies to Jan Brady: Capital, Capital, Capital

In the ’70s sitcom The Brady Bunch, Jan Brady had a preoccupation with her older sister, Marcia. Oftentimes she would exclaim in exasperation: “Marcia, Marcia, Marcia.” In this environment, bankers can be excused for a similar type of fixation; only in this case it is with capital.

Even banks that by all reasonable prior metrics were not leveraging their capital enough (as recently as 2007, they were called “overcapitalized”) are now focused on building up their capital base. Capital provides many benefits in the current environment.

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Posted on March 6, 2009 by Hunton & Williams LLP Print This Article

Are You Ready to Participate in the TALF?

It’s official. The Federal Reserve Board announced Monday, March 3, 2009, that the initial Term Asset-Backed Securities Loan Facility (TALF) subscription date is March 17, 2009, with a corresponding loan settlement date of March 25, 2009. In conjunction with this announcement, the Federal Reserve Board also published revised terms and conditions for participation in the TALF. Together, the revised terms and the short time frame promise a very busy week and a half for investors intending to participate in the TALF this month. Set forth below is a general overview of the TALF as it stands today. Please feel free to contact us for more specific information.

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