United States: Federal Reserve releases details of lending programs in response to COVID-19 pandemic, including Main Street lending program for mid-sized businesses

On 9 April 2020, the Federal Reserve announced that it would be providing up to USD 2.3 trillion in loans to support the US economy in response to the COVID-19 pandemic.

Lender liability typically refers to the situation where a lender exercises such a high degree of control over the day-to-day activities of the borrower that it becomes exposed to claims that otherwise would be asserted against the borrower. A recent decision by a New York Supreme Court judge determined that lenders may be exposed to liability even in the absence of control. This result, if upheld, may gain newfound importance in the COVID-19 era where lenders may turn to courts to help them protect their assets.

What is CBILS?

CBILS is a government backed loan scheme to provide financial support to small and medium businesses (SMEs) across the UK that are experiencing financial difficulties as a result of the COVID-19 outbreak. The scheme opened on 23 March 2020 and will run for an initial period of 6 months.

The scheme is delivered by accredited commercial lenders, backed by the government-owned British Business Bank (the BBB).

Belgium has already taken numerous measures to mitigate the economic impact of the coronavirus (COVID-19). The federal government has now also decided temporarily to protect debtors affected by the coronavirus crisis from creditors by imposing a stay on creditors’ right of creditors to enforce debts, terminate or dissolve existing agreements early and initiate bankruptcy proceedings.

Pursuant to the Federal Credit Union Act, the National Credit Union Administration issued a temporary final rule on April 21, easing regulatory requirements to assist federal credit unions (“FCUs”) and federally insured credit unions (“FICUs”) during the coronavirus (“COVID-19”) pandemic. The rule makes the following key changes that will be effective through December 31, 2020:

Shortly after the passage of a bill injecting an additional $310 billion into the Small Business Administration’s Paycheck Protection Program, the SBA has issued another supplemental Interim Final Rule (IFR) providing new guidance on several issues, including eligibility for hedge funds, private equity firms and portfolio companies, and has also answered questions about businesses in bankruptcy proceedings.

Slimming down a company, corporate and financial restructuring will be on minds of many managers and company owners in the coming months.

In practice, when deciding to wind down a company, often a decision needs to be made whether to trigger a regular wind-down (likvidacija), a fast-track wind-down (prenehanje družbe po skrajšanem postopku) or a bankruptcy proceeding (stečaj). The main goal usually is to close down the company with less cost and no liability for the shareholder or the management.

1. What to address first

The latest news and developments in retail mortgage lending and regulation.

This month in summary:

News

Government updates on the pandemic

There have been a number of updates that will affect lenders in respect of the pandemic. The key stories are:

Since our March 2020 blog post, the Federal banking and credit union regulators (FRB, FDIC, NCUA, OCC and CFPB) (collectively, the “Agencies”) published revised guidance clarifying the relationship between the March 22, 2020 Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (“March Guid

The banking regulation Q&A series provides a comprehensive overview of the rules governing the banking sector in Luxembourg. Today's chapter focuses on recovery, resolution and liquidation.

What options are available where banks are failing in your jurisdiction?