On August 22nd, the Federal Reserve Board proposed a two-year phase-in period for most savings and loan holding companies ("SLHCs") to file Federal Reserve regulatory reports with the Board and an exemption for some SLHCs from initially filing Federal Reserve regulatory reports. Under the Dodd-Frank Act, supervisory and rulemaking authority for SLHCs and their non-depository subsidiaries was transferred from the OTS to the Board. The Board previously sought comment on whether to require SLHCs to submit the same reports as bank holding companies.
On August 24th, the Third Circuit issued an opinion warning lawyers of the hazards posed by over-reliance upon automated, computerized communications between counsel and client. In doing so, it reinstated an order sanctioning a lawyer and her law firm for making false filings with the bankruptcy court. In re: Niles C. Taylor.
Nearly four years after its decision in Stern v. Marshall raised new doubts about the place of bankruptcy courts in our legal system, the Supreme Court has finally put those doubts to rest. This week, in Wellness International Network, Ltd. v. Sharif, No. 13-935, the Court held that even for claims that must otherwise be resolved by an Article III court, a bankruptcy court may still adjudicate the matter based on consent.
On November 12th, the Third Circuit affirmed both bankruptcy and district court findings that, under the Rooker-Feldman doctrine, federal courts lacked subject matter jurisdiction over a claim seeking rescission of a mortgage filed in an adversarial action in federal bankruptcy court after a state court entered a default foreclosure order on that mortgage. The Third Circuit held further that the entry of summary judgment against plaintiff on her Truth in Lending Act claim was proper.
On December 2nd, the House Financial Services Committee approved the Financial Stability Improvement Act, H.R. 3996, which creates a financial risk oversight council and provides for a mechanism for winding down a systemically important non-bank financial institution facing collapse. Committee Press Release. See also Bill Summary.
In a recent holding that a creditor may collect, on an unsecured basis, post-petition attorneys’ fees under an otherwise enforceable pre-petition contract, the Second Circuit Court of Appeals followed a similar ruling by the Ninth Circuit earlier this year, adding to a conflict among the circuits on this issue.
On December 16th, the CFTC published for comment amendments to its regulations concerning the operation of a commodity broker in bankruptcy. The amendments would permit a bankruptcy trustee to operate, with the written permission of the CFTC, the commodity broker in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of the commodity broker under appropriate circumstances, as determined by the Commission.
The Senate Banking Committee is considering the establishment of a special bankruptcy court for financial firms as part of its regulatory reform measures. Bankruptcy.
On January 11th, the Eighth Circuit held that a bankruptcy court properly awarded summary judgment to the bankruptcy trustee in a suit seeking to avoid as a preferential transfer, the pre-petition transfer of a mortgage from the debtor to the bank. Because the bank failed to record the home mortgage prior to the borrower's filing of a Chapter 7 bankruptcy petition, Section 547(e)(2)(C) of the Bankruptcy Code deemed the transfer of the mortgage to have occurred immediately before the debtor filed his bankruptcy petition.
The Office of the Comptroller of the Currency approved the first use of a "shelf charter" for the acquisition of a failed bank, allowing Bond Street Bank, National Association, to acquire a Florida bank that was placed in receivership on January 22nd. The "shelf charter" is a mechanism that involves the granting of preliminary approval to investors for a national bank charter. The charter remains inactive until the investor group is in a position to acquire a troubled institution.