Robert Loeb

Partner

Washington, D.C.


Read full biography at www.orrick.com

Bob Loeb is a partner in Orrick's Supreme Court and Appellate Litigation practice, specializing in high stakes and complex cases. He has briefed hundreds of cases and has personally argued more than 185 appeals, including cases in the U.S. Supreme Court, every federal circuit and numerous state courts.

His breadth and depth of appellate experience and track record of success in high-stakes matters are why clients, including top financial institutions and tech and energy companies, trust Bob with their most important cases.

In April 2019, Bob argued to the U.S. Supreme Court in Food Marketing Inst. v. Argus Leader Media, regarding Exemption 4 of the Freedom of Information Act, which permits the government to withhold “confidential” private-sector “commercial or financial information” within the government’s possession. In January 2019, Bob argued and won a billion-dollar case for a leading financial institution in New York’s highest court. In 2018, he argued to the U.S. Supreme Court in Byrd v. US, regarding the application of the Fourth Amendment to rental cars, and won a 9-0 victory. In July 2018, Bob also won a Second Circuit appeal on an important, multi-million-dollar case regarding email phishing. Bob is also a leader on fintech issues, regularly advising fintech lending platforms, banks, and investors.

Before joining Orrick, Bob served as one of the leaders of an elite appellate group at the Department of Justice. There, in addition to major national security, commercial, and administrative law, Bob supervised bankruptcy appeals. At Orrick, Bob has continued to handle big ticket bankruptcy matters, such as a billion-dollar dispute over whether DHL’s claim was discharged by United’s bankruptcy, appeals from the City of Stockton bankruptcy confirmation, and a Ninth Circuit matter involving the interplay of the Takings Clause and bankruptcy law.

Bob’s recent work includes matters for Johnson & Johnson, Credit Suisse, Microsoft, Gannett, Eni, Lending Club, Deloitte, EY, Medidata, Intel, Renco, and the City of Stockton.

Posts by: Robert Loeb

Federal Regulators Issue Key Guidance on Fintech Issues

 

On July 30, 2018, the U.S. Department of the Treasury (“Treasury“) and the Office of the Comptroller of the Currency (“OCC“) provided important guidance on a broad range of issues confronting the fintech industry. Treasury released a long-awaited report titled A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation (the “Treasury Report“).

Following a specific recommendation in the Treasury Report, the OCC formally announced that it would begin to accept applications for special purpose national bank charters, and it provided guidance on the procedures and standards that would govern such applications through the issuance of a Licensing Manual Supplement for Special Purpose National Banks (the “Manual Supplement“). Taken together, the Treasury Report and the OCC announcement reinforce the commitment of the federal government to promote the growth of the fintech industry. Click here to read the full Orrick-authored alert.

Bill Introduced in Congress to Make “Valid When Made” the Law of the Land

 

Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, introduced H.R. 5724, the Protecting Consumers’ Access to Credit Act of 2016, which would reaffirm the longstanding legal precedent under the National Bank Act and the Federal Deposit Insurance Act that federal law preempts a loan’s interest if valid when made. The legislation was introduced to address one of the issues raised by the Second Circuit in Madden vs. Midland Funding. Legislation.

Case Update: Midland Funding v. Madden – Supplemental Brief

As we reported in our case update on May 26, the Solicitor General filed its brief expressing the Government’s views on the cert-worthiness of Midland Funding v. Madden. Yesterday, Midland filed a supplemental brief with the Court responding to the Solicitor General’s views. Midland emphasizes the clarity and firmness of the Solicitor General’s assessment that the Second Circuit’s decision is incorrect. Midland further argues that despite the Solicitor General’s ultimate recommendation that the Court decline review, the Court should nevertheless take the case. The brief argues that the case “presents a question that is critical to the functioning of the national banking system and to the availability of consumer credit,” and that the issues need resolution now, not later.

The Supreme Court is now poised to decide whether to grant the petition. A docket entry issued yesterday indicates that the case has been distributed for the Court’s June 23 conference. At that conference, the Court will discuss whether to grant or deny cert. or postpone consideration of the petition until the next conference (set for September 26). Unless at the June 23 conference the Court decides to hold the petition for further consideration, we expect that an order list indicating whether the petition has been granted or denied will be issued the following Monday, June 27.

The Federal Housing Finance Agency Releases Final Rule on Federal Home Loan Bank Membership

On January 12, 2016, the Federal Housing Finance Agency (“FHFA”) issued a final rule establishing new requirements for membership in the Federal Home Loan Banks (“FHLBanks”). The FHLBanks are 11 U.S. government-sponsored banks that provide liquidity to their members to support housing finance and community investment.  Membership is governed by the Federal Home Loan Bank Act (the “Act”), which states that insurance companies, among others, are eligible for membership.  12 U.S.C. § 1424(a)(1).  The new rule, issued under that Act, establishes new requirements for becoming a member and maintaining membership of an FHLBank.  Most notably, the final rule excludes captive insurance companies from membership.

In its 2014 proposed rule, FHFA first proposed excluding captive insurance companies from the scope of the definition of “insurance company” in the Act. Captive insurance companies are insurance companies established by a parent specifically to cover risks to which the parent is exposed; they do not insure non-affiliated third parties. Despite receiving 400 comments on this aspect of the rule, almost all of which expressed opposition to the proposal, FHFA’s final rules retains the proposal essentially as it was proposed.

Under the rule, FHLBanks may not accept any captive insurance companies as new members. For captive insurance companies that became members since the rule was proposed in 2014, membership must be terminated within one year, and no additional advances may be made.  Captive insurance companies that were members of a FHLBank prior to the issuance of the proposed rule may remain members of their current FHLBanks for five years, but the amount of advances they can receive are capped, and the FHLBanks may not make new advances or renew existing advances with a maturity date beyond the five-year period.

The rule’s exclusion of captive insurance companies is vulnerable to challenge in court. Chiefly, it is unclear that FHFA has authority to exclude captive insurance companies from the purview of the Act.  Congress directed that “any” insurance company shall be eligible for membership, potentially ousting FHFA’s discretion to pick and choose among insurance companies, especially where the definition of “insurance company” has traditionally been left to the States.  In the same vein, it is unclear that FHFA may add additional statutory criteria (here, that an insurance company must primarily underwrite insurance for nonaffiliated persons or entities) not included by Congress.  In addition, FHFA’s evaluation of its purported reason for excluding captive insurance companies—that such companies may be passing advances through to their parents, who are not eligible for FHLBank membership—is not thoroughly analyzed.  It appears that rather than investigating whether captive insurance companies are actually being used as conduits to ineligible entities, FHFA relies primarily on industry publications encouraging companies to set up captives in order to do so.  Moreover, it is unclear that FHFA’s proffered solution would solve any purported problem given that other entities that remain eligible under FHFA’s new rule can also pass through advances to their ineligible parent companies.

Under the 2014 proposal, FHFA also proposed imposing ongoing minimum investment requirements on FHLBank members in order to maintain membership. Specifically, FHFA proposed that institutions would have had to maintain a certain percentage of residential mortgage assets.  The threshold for small banks and credit unions with assets less than $1 billion was at least 1%.  In its final rule, FHFA removed these requirements from the final regulations, concluding that the burdens of imposing such standards would outweigh the benefits.

The new regulation will go into effect 30 days after publication in the Federal Register. The rule has been strongly opposed by industry participants, who view it as a detriment to the liquidity of the residential housing market, and is expected to garner further discussion and likely a court challenge. Press Release. Final Rule.

Please feel free to contact any of the authors of this Client Alert or other Orrick attorneys with whom you work to discuss any questions you may have with regard to the foregoing.

Madden Case Timeline

MaddenvMidland

Note:  These are the outcomes we think are most likely based on our experience and study of this matter.  The Supreme Court can, of course, resolve cases in a number of other ways (including summary disposition, vacating and remanding in light of another decision, etc.) that we do not anticipate here, but remain possible.  Finally, the Court can always act in accord with its own preferred timeline.

If you have any questions about or wish to discuss further the Madden v. Midland Funding  case, please contact Robert Loeb (+1 202-339-8475) or Howard Altarescu (+1 212-506-5315) or feel free to reach out to any of your other Orrick contacts.

Case Update: Madden v. Midland Funding

As expected, today, November 10, 2015, Midland Funding filed a petition for a writ of certiorari in the United States Supreme Court, asking the Court to review the Second Circuit’s ruling in Madden v. Midland Funding, that the federal preemption provision of the National Bank Act, 12 U.S.C. § 85, could not be invoked by a non-national bank assignee.  A link to the petition is provided here.  The cert petition advances two primary arguments as to why the Supreme Court should grant review.  First, Midland claims the need for resolution of a split between the Second Circuit, on the one hand, and the Eighth and Fifth Circuits, on the other, concerning the impact of the National Bank Act on assigned loans.  Specifically, Petitioner claims the Madden decision – subjecting non-national bank assignees to state usury laws – conflicts with the Eighth Circuit’s decision in Krispin v. May Department Stores Co., 218 F.3d 919 (8th Cir. 2000), which holds that the preemption inquiry turns on the status of the originating entity and subsequent assignments are irrelevant, and the Fifth Circuit’s decision in FDIC v. Lattimore Land Corp., 656 F.2d 139 (5th Cir. 1981), which also looked to the originator of the debt (albeit in the inverse scenario, where the originator was the non-national bank).

Second, the Petitioner claims the Madden case presents a question of substantial importance, particularly to the financial community.  Midland contends that if left intact, the Second Circuit’s decision will allow states to regulate lending terms when a loan created by a national bank is assigned to a non-national bank entity.  Going one step further, Midland asserts the Second Circuit’s reasoning is all the more troubling because it is equally applicable to loans originated by savings associations and state-chartered federally insured banks.  In turn, Midland contends the decision has serious implications for the secondary markets, as it could render loans originated by national banks and subsequently transferred worthless.  See Pet. 23 n.8 (“the Second Circuit’s decision casts doubt on the viability of online lending marketplaces currently envisioned by the federal government…. The decision “pose[s] an acute risk” to lenders in those marketplaces, because they may be subject to state usury laws based on the vagaries of a particular customer’s location.”).  Ultimately, Midland claims the perilous state of the financial markets in the wake of the Madden decision and the need for uniform lending practices demand immediate Supreme Court intervention.

As previously explained, with anticipated extensions, we do not expect to hear if the Supreme Court is going to take the case until at least February 22, 2016.  Petition.

Case Update: Madden v. Midland Funding

​On May 22, 2015, the U.S. Court of Appeals for the Second Circuit held in Madden v. Midland Funding that the federal preemption provision of the National Bank Act, 12 U.S.C. § 85, could not be invoked by a non-national bank assignee.  Consequently, even though the debt in that case was procured from a national bank, the interest rate the non-bank assignee could charge was subject to state usury law scrutiny.

The Court’s decision was informed by the policies underlying the National Bank Act.  The Act was designed to create uniform rules that limit the liability of national banks and prescribe exclusive remedies for their overcharges so as to protect them from unfriendly state legislation.  The Court explained that these purposes are not served in the case of a non-national bank assignee because invocation of state usury laws in that context would not interfere with the business of national banks.   The Court further explained that the national bank would still be able to sell the debt—it’s just that the debt’s exposure to state usury law could affect its market price.

We expect that Midland Funding will file a certiorari petition in the United States Supreme Court on November 10.  When filed, we will send a follow up.  For now, there are three quick points worth highlighting: READ MORE

Treasury Request for Public Input on Expanding Access to Credit through Online Marketplace Lending

“Online marketplace lending refers to the segment of the financial services industry that uses investment capital and data-driven online platforms to lend to small businesses and consumers.”[1]

On July 20, the Department of the Treasury published a Notice and Request for Information (“RFI”) seeking comment on various aspects of online marketplace lending, including –

  • the business models and products offered to small businesses and consumers
  • the potential to expand access to credit to underserved market segments
  • how the financial regulatory framework should evolve to support the growth of the industry
  • Treasury asks for comment on 14 categories of questions, some of which include multiple specific questions, which we summarize and, with respect to some, offer initial thoughts on below.

To view the full article, please click here.


[1] 80 Fed. Reg. 42866 (July 20, 2015)