William T. Cavanagh

Associate

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Read full biography at www.orrick.com
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Posts by: William Cavanagh

FHFA Announces $5.5 Billion Settlement With Royal Bank of Scotland

 

On July 12, 2017, the Federal Housing Finance Agency (“FHFA“), as conservator of Fannie Mae and Freddie Mac, announced it had reached a settlement with Royal Bank of Scotland Group plc, related companies and specifically named individuals (collectively, “RBS“) for $5.5 billion. The settlement resolves all claims in the lawsuit FHFA v. The Royal Bank of Scotland Group plc et al., Case No. 3:11-cv-1383, in the United States District Court for the District of Connecticut. FHFA alleged violations of federal and state securities laws in connection with private-label residential mortgage-backed securities (PLS) trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, Royal Bank of Scotland will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae and certain claims against RBS related to the securities involved will be released. Release. Settlement Agreement.

Rating Agency Developments

 

On July 10, 2017, DBRS issued a report entitled Rating Canadian Split Share Companies and Trusts. Report.

On July 7, 2017, DBRS issued a report entitled Derivatives Criteria for Canadian Structured Finance. Report.

On July 7, 2017, DBRS issued a report entitled Legal Criteria for Canadian Structured Finance. Report.

On July 7, 2017, DBRS issued a report entitled Legal Criteria for U.S. Structured Finance. Report.

On July 7, 2017, DBRS issued a report entitled Rating Canadian ABCP and Related Enhancement Features. Report.

On July 7, 2017, Fitch issued a report entitled CLOs and Corporate CDOs Rating Criteria. Report.

On July 7, 2017, Fitch issued a report entitled French Residential Loans EDF Engie Bespoke Rating Criteria. Report.

On July 7, 2017, Fitch issued a report entitled U.S. State Housing Finance Agencies: Mortgage Insurance or Guarantee Fund Program Rating Criteria. Report.

On July 6, 2017, Fitch issued a report entitled Third-Party Partial Credit Guarantees Rating Criteria. Report.

On July 6, 2017, Fitch issued a report entitled U.S. Public Finance Solid Waste Revenue Bond Rating Criteria. Report.

Fee Rate Advisory #3 for Fiscal Year 2017

 

On May 31, 2017, the Securities and Exchange Commission (“Commission“) announced that starting July 4, 2017, the fee rates applicable to most securities transactions will be set at $23.10 per million dollars. Consequently, each self-regulatory organization will continue to pay the Commission a rate of $21.80 per million for covered sales occurring on charge dates through July 3, 2017, and a rate of $23.10 per million for covered sales occurring on charge dates on or after July 4, 2017. Release. Rule.

OCC to Provide Extended Notice for Scheduled CRA Evaluations

 

On May 31, 2017, the Office of the Comptroller of the Currency (“OCC“) announced it will extend the notification timeline for upcoming Community Reinvestment Act (“CRA“) evaluations. Beginning with the third quarter notification for 2017, the OCC will post the list of financial institutions for which CRA will be coming due over the next two quarters, to allow more time for interested parties to review and provide meaningful comments on a financial institution’s performance before CRA examination. The current regulations require the OCC to publish the quarterly CRA evaluation schedule at least 30 days before the beginning of each quarter. Even though the OCC will publish two quarters of upcoming CRA evaluations, the schedule is subject to change. Release.

CFTC Extends No-Action Relief to SEFs and DCMs From Certain CFTC Regulations for Correction of Errors

 

On May 30, 2017, the U.S. Commodity Futures Trading Commission‘s (“CFTC“) Division of Market Oversight and Division of Clearing and Risk issued a no-action letter extending the relief provided in CFTC Letter No. 16-58, which expires on June 15, 2017. That no-action letter provides relief from certain CFTC regulations to permit swap execution facilities (“SEFs“) and designated contract markets (“DCMs“) to correct clerical or operational errors that caused a swap to be rejected for clearing and thus become void. The no-action letter also permits SEFs and DCMs to correct clerical or operational errors discovered after a swap has been cleared. The letter extends the relief until the effective date of any revised CFTC regulations regarding methods of execution requirements and pre-arranged trading. Release. Full Letter.

Rating Agency Developments

 

On June 1, 2017, Kroll Bond Rating Agency released a report entitled KBRA’s Views on the State of the Solar Market. Report.

On May 31, 2017, Kroll Bond Rating Agency released a report entitled Oil Price Increases Won’t Plug CMBS Losses. Report.

On May 26, 2017, DBRS issued a report entitled Rating Canadian Airport Authorities. Report.

On May 26, 2017, DBRS issued a report entitled Rating Public Universities. Report.

On May 26, 2017, DBRS issued a report entitled Rating Companies in the Independent Power Producer Industry. Report.

On May 26, 2017, Moody’s issued a report entitled Global Property and Casualty Insurers. Report.

On May 25, 2017, Fitch issued a report entitled Global Consumer ABS Rating Criteria. Report.

On May 25, 2017, Fitch issued a report entitled U.S. Public Finance Tax-Supported Rating Criteria. Report.

On May 25, 2017, Moody’s issued a report entitled Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts. Report.

Rating Agency Developments

 

On May 17, 2017, Fitch issued a report entitled Switzerland Residential Mortgage Rating Criteria Addendum. Report.

On May 17, 2017, Fitch issued a report entitled Germany Residential Mortgage Rating Criteria Addendum. Report.

On May 17, 2017, Moody’s issued a report entitled Unregulated Utilities and Unregulated Power Companies. Report.

On May 17, 2017, Moody’s issued a report entitled Midstream Energy. Report.

On May 16, 2017, Moody’s issued a report entitled Power Generation Projects. Report.

On May 15, 2017, DBRS issued a report entitled Rating European Non-Performing Loans Securitzations. Report.

On May 15, 2017, DBRS issued a report entitled Rating Canadian Provincial Governments Methodology. Report.

On May 15, 2017, DBRS issued a report entitled Rating Canadian Municipal Governments. Report.

On May 15, 2017, DBRS issued a report entitled Rating Canadian Provincial Agents of the Crown. Report.

On May 15, 2017, Fitch issued a report entitled Global Consumer ABS Rating Criteria – EMEA and APAC Auto Residual Value Addendum. Report.

On May 11, 2017, DBRS issued a report entitled Italian Salary-Assignment Loan Securitisations – Methodology. Report.

SEC Adopts T+2 Settlement Cycle for Securities Transactions

 

On March 22, 2017, the Securities and Exchange Commission (SEC) adopted an amendment to Rule 15c6‑1(a), shortening the standard settlement cycle for most broker-dealer securities transactions by one business day, beginning on September 5, 2017. The amended rules shorten the settlement cycle from three business days (T+3) to two business days (T+2). The purpose of the amended rule is to enhance efficiency, reduce risk and ensure coordinated and expeditious transition by market participants to a shortened standard settlement cycle. Release.

Banking Agencies Issue Joint Report to Congress Under the Economic Growth and Regulatory Paperwork Reduction Act of 1996

 

On March 21, 2017, the Office of the Comptroller of the Currency (OCC) announced that the Federal Financial Institutions Examination Council (“FFIEC“) issued a “EGRPRA Joint Report to Congress,” which details a review of rules affecting financial institutions conducted under the Economic Growth and Regulatory Paperwork Reduction Act of 1996, which requires federal banking agencies and the FFIEC to conduct a review of their rules at least every 10 years to identify outdated or unnecessary regulations. The review focused on the effect of regulations on smaller institutions, such as community banks and savings associations. The report describes joint actions planned or taken by the federal financial institutions regulators, including simplifying regulatory capital rules for community banks and savings associations, streamlining reports of condition and income, increasing the appraisal threshold for commercial real estate loans and expanding the number of institutions eligible for less frequent examination cycles. Release. Full Report.

Rating Agency Developments

 

On March 22, 2017, DBRS issued a report entitled DBRS Criteria: Commercial Paper Liquidity Support for Non‑Bank Issuers. Report.

On March 22, 2017, Fitch issued a report entitled Fitch Updates US RMBS Seasoned, Re-Performing, and Non‑Performing Loan Rating Criteria. Release.

On March 22, 2017, Moody’s issued a report entitled Construction Industry. Report.

On March 20, 2017, Fitch issued a report entitled Fitch Updates SF and CvB Counterparty Criteria and Addendum. Release.

On March 16, 2017, DBRS issued a report entitled DBRS Criteria: Support Assessments for Banks and Banking Organisations. Report.

On March 16, 2017, DBRS issued a report entitled General Corporate Methodology. Report.

On March 16, 2017, DBRS issued a report entitled North American Single-Asset/Single-Borrower Methodology. Report.

On March 16, 2017, DBRS issued a report entitled Rating Companies in the Canadian Grain Handling Industry. Report.

On March 16, 2017, Fitch issued a report entitled Fitch Updates Single- and Multi-Name Credit Linked Notes Rating Criteria. Release.

On March 16, 2017, Moody’s issued a report entitled Global Alcoholic Beverage Industry. Report.

On March 16, 2017, Moody’s issued a report entitled Regulated Electric and Gas Networks. Report.