Private credit funds (PCFs) are emerging as key players in the subscription and net asset value (NAV) line market, significantly impacting fund financing. Regulatory changes, economic trends, and strategic innovations are also driving changes in the subscription facility landscape.
On July 16, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the federal banking agencies) jointly published a proposed rule to rescind the 2023 Community Reinvestment Act (CRA) final rule. This proposal aims to revert to the CRA framework that was in effect prior to the 2023 amendments, with certain technical updates. This decision follows ongoing litigation in the Fifth Circuit, where banking trade associations challenged the 2023 rule, alleging regulatory overreach.
On July 14, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (the Board), and the Federal Deposit Insurance Corporation (FDIC) jointly issued a statement addressing the safekeeping of crypto-assets by banking organizations on behalf of their customers. This announcement clarifies how existing laws, regulations, and risk management principles apply to the safekeeping of crypto-assets by banks and does not create any new supervisory expectations. Importantly, the federal banking regulators clearly signal that banks can serve as custodians of digital assets including storing cryptographic keys.
On July 14, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (the Board), and the Federal Deposit Insurance Corporation (FDIC) jointly issued a statement addressing the safekeeping of crypto-assets by banking organizations on behalf of their customers. This announcement clarifies how existing laws, regulations, and risk management principles apply to the safekeeping of crypto-assets by banks and does not create any new supervisory expectations. Importantly, the federal banking regulators clearly signal that banks can serve as custodians of digital assets including storing cryptographic keys.
Recently, the Department of Financial Protection and Innovation (DFPI) in California issued a consent order against Coinme Inc., a company operating digital financial asset kiosks, commonly known as Bitcoin ATMs, across the state. This order comes after findings that Coinme violated several provisions of the California Consumer Financial Protection Law (CCFPL) and the Digital Financial Assets Law (DFAL). Notably, this is the first enforcement action taken under the DFAL and signals that DFPI is focused on trying to prevent scammers from taking advantage of Californians.
Navigating Consignment Rights Before Bankruptcy
Consignment arrangements can be complex, especially when a consignor seeks to protect their interests before a bankruptcy filing. Under the Uniform Commercial Code (UCC), consignors must follow specific procedures to perfect their security interest in consigned goods, elevating their status from unsecured to secured creditors. This process involves filing a UCC financing statement and providing a Purchase Money Security Interest (PMSI) notice to ensure priority over other creditors. Failure to perfect these interests can result in losing priority to the consignee’s creditors or a bankruptcy trustee.
Today, the Office of the Comptroller of the Currency (OCC), alongside the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) (collectively, the agencies), with concurrence from the Financial Crimes Enforcement Network (FinCEN), issued an order granting an exemption from a specific requirement of the Customer Identification Program (CIP) Rule under § 326 of the USA PATRIOT Act. This exemption allows financial institutions to use alternative methods to collect Taxpayer Identification Number (TIN), (e.g., Social Security Number, individual taxpayer identification number, or employer identification number) information from third-party sources rather than directly from customers. The order applies to accounts at all entities supervised by the agencies.
On June 24, Senate Banking Chairman Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), Senator Thom Tillis (R-NC), and Senator Bill Hagerty (R-TN) released a set of guiding principles for the development of comprehensive market structure legislation for digital assets. These principles, described in more detail below, aim to provide a foundational framework for discussions and negotiations with industry participants, legal and academic experts, and government stakeholders. This announcement comes on the heels of the House Committees on Agriculture and Financial Services both favorably reporting to the House the CLARITY Act (discussed here), which aims to establish a clear regulatory framework for digital assets in the United States. and the recent passage by the U.S. Senate of the GENIUS Act, a landmark effort to establish a comprehensive federal framework for the payment stablecoins (discussed here).
Chapter 11 bankruptcy, known as “reorganization bankruptcy,” is a critical process for preserving a debtor’s business value. This blog explores the life cycle of a Chapter 11 case, emphasizing the importance for creditors and other stakeholders to understand the stages and their potential impact on financial interests. Part II of this series delves into the middle and final stages, including plan confirmation and post-plan administration.
On June 17, the U.S. Senate voted 68-30 to pass S.1582, the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act (the Act). This represents a landmark effort by the U.S. Congress to establish a comprehensive federal framework for the regulation of payment stablecoins. Passed with bipartisan support in the Senate, the Act aims to provide regulatory clarity, enhance consumer protection, and safeguard national security in the rapidly growing stablecoin sector.