Charlie McDonald

Associate

New York


Read full biography at www.orrick.com
Charlie McDonald is an associate in the Structured Finance group in the New York office.Array

Posts by: Charlie McDonald

FHFA Strengthens Evaluation Criteria for GSE’s Duty to Serve Program

 

On March 11, the Federal Housing Finance Agency (FHFA) issued revised guidance for evaluating Underserved Markets Plans submitted by Fannie Mae and Freddie Mac (the “GSEs”) for FHFA approval under the Duty to Serve regulation. The revised guidance strengthens the criteria for determining GSE compliance with the regulation, including through a revised ratings framework and higher expectations for impactful plans. Revised Guidance.

Federal and State Banking Agencies Encourage Financial Institutions to Meet Financial Needs of Customers and Members Affected by Coronavirus

 

On March 9, the Federal Reserve Board, FDIC, OCC, Consumer Financial Protection Bureau (CFPB), National Credit Union Administration (NCUA) and Conference of State Bank Supervisors (CSBS) issued a joint statement encouraging financial institutions to work constructively with borrowers and other customers in communities affected by the coronavirus. The agencies also pledged to provide appropriate regulatory assistance to affected institutions subject to their supervision, including by working with affected institutions to expedite certain requests and minimize disruptions or burdens in connection with examinations. Release.

 

FFIEC Updates Interagency Guidance on Pandemic Planning

 

On March 6, the member agencies of the Federal Financial Institutions Examination Council (FFIEC) issued updated guidance specifying that financial institutions’ business continuity plans should address the threat of a pandemic outbreak and its potential impact on the delivery of critical financial services. The guidance identifies actions that banks should take to minimize the potential adverse effects of a pandemic. FFIEC Guidance.

 

 

Rating Agency Developments

 

On March 18, KBRA published its Coronavirus (COVID-19): Consumer ABS Braces for Disruptions. Report.

On March 13, KBRA published its General Global Rating for Asset-Backed Securities. Methodology.

On March 13, KBRA published its Aviation ABS Global Rating. Methodology.

On March 13, KBRA published its Equipment Lease & Loan Global ABS Rating. Methodology.

On March 13, KBRA published its Project Finance Global Rating. Methodology.

On March 13, KBRA published its Structured Credit Global Rating. Methodology.

On March 12, KBRA published its Financial Guaranty Global Rating. Methodology.

On March 11, DBRS Morningstar published a report entitled: Mapping Financial Institution Internal Ratings to DBRS Morningstar Ratings for Global Structured Credit Transactions. Methodology.

On March 10, Fitch published its rating for Aircraft Operating Lease ABS. Criteria.

On March 9, DBRS Morningstar published its North American CMBS Multi-Borrower Rating. Methodology.

On March 9, Moody’s published its proposed update for rating TruPS CDOs. Methodology.

On March 6, DBRS Morningstar published its North American CMBS Surveillance. Methodology.

On February 19, DBRS Morningstar published its U.S. Federal Family Education Loan Program Securitizations. Criteria.

On February 18, Fitch published its U.S. Public Finance Letter of Credit-Supported Bonds and Commercial Paper Rating. Criteria.

CFTC’s Division of Market Oversight Supplements No-Action Relief to SEFs and DCMs from Certain CFTC Regulations for Correction of Errors

 

On January 8, the Commodity Futures Trading Commission (CFTC) Division of Market Oversight issued a no-action letter that provides an alternative error correction process by which swap execution facilities (SEFs) and designated contract markets (DCMs) may permit counterparties to determine that an error has occurred and correct the error, subject to ex post facto review by the SEF or DCM. The no-action letter supplements the relief provided in CFTC Letter 17-27, which provided relief from certain CFTC regulations to permit SEFs and DCMs to correct clerical or operational errors discovered after a swap has been cleared. CFTC Release.

HUD Releases Proposed Affirmatively Furthering Fair Housing Rule

 

On January 7, the Department of Housing and Urban Development (HUD) published its proposed Affirmatively Furthering Fair Housing rule (AFFH Rule). The proposed AFFH Rule would replace the AFFH Rule that was finalized in 2015 to provide a process for evaluating local jurisdictions’ compliance with the Fair Housing Act’s requirement that HUD funding be used to affirmatively further fair housing. The proposed AFFH Rule revises the 2015 definition of “affirmatively furthering fair housing”, develops metrics to compare jurisdictions and requires jurisdictions to identify steps they will take over five years to comply with AFFH Rule requirements. Comments on the proposed AFFH Rule are due 60 days after publication in the Federal Register. HUD Release. Proposed Rule.

SEC Office of Compliance Inspections and Examinations Announces 2020 Examination Priorities

 

On January 7, the SEC Office of Compliance Inspections and Examinations announced its 2020 examination priorities, which include a focus on risks related to retail investors (including seniors and those saving for retirement), market infrastructure, information security, anti-money laundering programs and financial technology (including digital assets and electronic investment advice), among others. The SEC publishes its examination priorities annually to enhance the transparency of its examination program and to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets. SEC Release.

 

 

Banking Agencies Amend Effective Date for Capital Simplification Final Rule for Non-Advanced Approach Banks

 

On November 13, the OCC, the FDIC and the FRB amended the effective date of the Capital Simplification Final Rule issued on July 22. Banks not subject to the advanced approaches capital rule will be permitted to implement the simplified standards for calculating regulatory capital on January 1, 2020, instead of April 1, 2020, as initially provided. OCC ReleaseFederal Register.

 

Banking Agencies Publish Capital Simplifications for Qualifying Community Banking Organizations

 

On November 13, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) published in the Federal Register a final rule creating an optional Community Bank Leverage Ratio (CBLR) framework for measuring capital adequacy of qualifying community banking organizations. Banks that meet the qualifying criteria, including maintaining a leverage ratio greater than 9 percent, and elect to use the CBLR framework will be considered to have met the capital requirements for the “well capitalized” category under the agencies’ Prompt Corrective Action (PCA) framework and will no longer be subject to the generally applicable capital rule. The final rule will become effective on January 1, 2020. OCC ReleaseFederal Register.

 

Federal Reserve Board Proposes Extending Initial Compliance Dates for Foreign Banks Subject to Single-Counterparty Credit Limit Rule

 

On November 8, the FRB invited public comment on a proposal to extend by 18 months the initial compliance dates for foreign banks subject to its single-counterparty credit limit rule. The extension would allow additional time for foreign banks to comply with the FRB’s rule via certification with a similar home country rule or standard. Under the proposal, the largest foreign banks would need to comply by July 1, 2021, while smaller foreign banks would need to comply by January 1, 2022. Comments will be accepted for 30 days after publication in the Federal Register. ReleaseProposed Rule.