Catherine M. "Cathy" Brennan

There are two provisions of the Bankruptcy Code that incentivize creditors to continue to work with financially distressed debtors — Sections 503(b)(9) and 546(c). These two sections apply to creditors who remain unpaid at the time of bankruptcy, and also give them options to take certain actions to increase their likelihood to be paid (§503(b)(9)) or to recover their goods (§546(c)). Bill Siegel explains. https://lnkd.in/gDwePirE #Bankruptcy #CreditorsRights #VendorRights

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On November 18, the FDIC announced an extension of the comment period for its proposed rule on Custodial Deposit Accounts with Transactional Features. Stakeholders now have until January 16, 2025, to submit their input. Key Highlights: - Extended Deadline: The comment period, initially set to close on December 2, 2024, has been extended by 45 days to ensure respondents have adequate time to provide thoughtful feedback. - Proposed Rule Overview: Issued on September 17, 2024, the proposal aims to strengthen recordkeeping requirements for custodial deposit accounts to enhance the FDIC’s ability to promptly pay deposit insurance claims in the event of an institution's failure. - Recordkeeping Requirements: Under the proposed rule, FDIC-insured depository institutions (IDIs) must: - Identify beneficial owners of custodial accounts. - Maintain records detailing account balances and ownership categories. - Implement daily reconciliations to ensure account accuracy. - Meet specific criteria if outsourcing recordkeeping to third parties. - Regulatory Oversight: Banks' primary federal supervisors will monitor compliance with the rule and have the authority to enforce adherence if necessary. This extension reflects the FDIC’s commitment to fostering meaningful stakeholder engagement on rules that affect depositor protections and financial stability. For further details, you can read the full article here - https://lnkd.in/gXi6RrNy For more updates on financial services, follow Global Regulatory Insights. #FDIC #BankingRegulations #CustodialAccounts #FinancialServices #GRI

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The Consumer Financial Protection Bureau (CFPB) recently issued an interpretive rule clarifying the applicability of subpart B of Regulation Z to lenders that issue digital user accounts used to access Buy Now, Pay Later (BNPL) loans. This move aims to ensure that these lenders meet the criteria for being "card issuers" under Regulation Z, which includes provisions governing periodic statements and billing disputes. As the BNPL market continues to expand, this interpretive rule holds significant implications for startups offering BNPL services and companies partnering with BNPL providers. Read more here ➡ https://lnkd.in/eyqgyGkt #CFPB #BNPL #RegulationZ #Fintech #Startups #ConsumerProtection #LegalCompliance #DigitalFinance #FintechRegulation #BNPLProviders

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SBA EIDL Fraud & How It Is Discovered Every day, and often multiple times a day, we read stories about people or businesses being indicted for PPP or SBA EIDL loan fraud. I have always wondered how these cases are discovered. First, the SBA Inspector General has an online portal to submit loan fraud reports. The portal can be found at https://lnkd.in/eBkcGVXf. Second, the FBI has special agents and field offices throughout the country investigating SBA EIDL loan fraud and Third, The New York Times recently published an article titled "They Investigated Pandemic Fraud, Then Earned Thousands," available at https://lnkd.in/erBCZkgx. The article explains that under the False Claims Act, private citizens can file lawsuits on behalf of the federal government against those who may have defrauded the United States. If the government recovers funds, these citizens can typically earn between 15 and 30 percent of that amount. These lawsuits are known as "qui tam," or whistle-blower cases, and citizens have recovered hundreds of thousands of dollars by bringing these cases. This story brings to mind the old adage that one person's misfortune is another person's fortune! Jim Shenwick, Esq 917-363-3391 [email protected] Please click the link to schedule a telephone call with me https://lnkd.in/eFVNxFpq We help individuals and businesses with too much debt!

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It's not just for community banks . . . Today, the OCC, the Fed, and the FDIC issued this new Guide for Third-Party Risk Management, noting it may be helpful for all banks—and their Fintech, service provider, and vendor partners). Nothing earth shaking in here but consider it your preview of the examination questions that may come from your friendly financial regulator. https://lnkd.in/e_33r7ar #consumerprotectioncompliance #amlcompliance #bankfintechpartnerships

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REQUEST FOR PUBLIC COMMENT (DEADLINE TODAY!): The Consumer Financial Protection Bureau is requesting public comment on the Fair Credit Reporting Act Medical Debt Notice of Proposed Rulemaking which would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical bill data. This significant change aims enhance privacy protections, improve credit scores, and prevent the use of medical debt in lending decisions. Your input is crucial in helping shape a fairer credit reporting policy. Learn more:

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Amidst the evolving legal landscape for cannabis businesses, federal banking restrictions pose significant challenges. The SAFER Banking Act offers a ray of hope, promising greater financial stability and access to essential banking services for the industry. The SAFER Banking Act (Secure and Fair Enforcement Regulation Banking Act) is a U.S. legislative proposal designed to allow banks and financial institutions to work with cannabis-related businesses without facing federal penalties. Under current federal law, cannabis is still illegal, which makes it difficult for banks to provide services to legal state-level cannabis businesses. This forces many of these businesses to operate in cash, which poses safety and transparency risks. The SAFER Banking Act aims to: ➡ Protect banks from penalties or criminal liability for providing services to legally operating cannabis businesses; ➡ Improve safety by reducing the cash-only nature of cannabis businesses, thereby reducing the risk of theft and crime; ➡ Promote financial transparency by allowing cannabis businesses to use traditional banking services, making it easier to track and tax their income. The bill has seen bipartisan support and is viewed as a significant step toward integrating cannabis businesses into the mainstream financial system while addressing public safety and regulatory concerns. For cannabis businesses, this means not just financial security but also the opportunity for increased investment in brand development and marketing. In a more stable financial climate, strong trademarks become crucial assets for safeguarding brand identity and market presence. While progress is promising, hurdles like full legislative approval in Congress still lie ahead. Stay informed on how to protect your cannabis brand amidst these legal shifts. Contact us to learn more about navigating trademark protection in this evolving context. https://lnkd.in/e3VBugSM #DistrictTrademark #DistrictTM #TrademarkLaw #IntellectualProperty #Trademarks #CannabisLaw #CannabisBusiness

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Read the latest U.S. Small Business Administration, Office of Inspector General's evaluation report assessing the U.S. Small Business Administration’s (SBA) oversight of non-bank lenders, including financial technology (fintech), and third-party service providers in the PPP. Over 5,300 lenders, including bank and non-bank lenders, participated in the Paycheck Protection Program (PPP), an $813.7 billion program that provided forgivable loans to eligible borrowers. The primary distinction between the two is that non-bank lenders are not federally regulated. Both were allowed to partner with third-party service providers to assist in the PPP loan process. We found non-bank PPP lenders made $14.2 billion in suspected fraudulent loans at a rate more than five times higher than loans made by traditional bank lenders. Over $6.1 billion of the $14.2 billion in suspected fraudulent non-bank PPP loans, or nearly 43 percent, were made by lenders categorized as fintech's and other State Regulated Finance Companies. Additionally, loans involving service providers had a suspected fraud rate more than three times higher than loans made without a service provider. We made six recommendations for SBA to strengthen oversight of non-bank lenders and service providers. Read more: https://ow.ly/mSwl50U6hhf

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Let’s talk about a better way to bank for contingency fee law firms   Manage your money effortlessly and securely with Deposit Solutions from Esquire Bank: the leading bank for contingency fee law firms. https://lnkd.in/ek3iF4pe #contingencyfeelawfirm #despositsolutions #lawfirmsuccess

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Let’s talk about a better way to bank for contingency fee law firms   Manage your money effortlessly and securely with Deposit Solutions from Esquire Bank: the leading bank for contingency fee law firms. https://lnkd.in/ek3iF4pe #contingencyfeelawfirm #despositsolutions #lawfirmsuccess

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Davis Polk is advising an ad hoc group of first-lien term lenders in connection with a recapitalization of Vialto Partners. Read more: https://lnkd.in/eTgCVTm2 #Restructuring

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Excited for the NAGGL (National Association of Government Guaranteed Lenders) Annual conference next week in Vegas! Don't gamble with your loan guaranty - visit us at Booth #41 to learn how Starfield & Smith, PC can help you maximize your SBA compliance!🌟 #NAGGL #SBA #Compliance #Finance #SmallBusiness

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Nice to see the IRS giving Investor Choice Advocates Network's comment letter a shout out in the recently finalized regs on reporting requirements for digital assets, and a big thanks to Stephen J. Turanchik at Paul Hastings for his excellent work on ICAN's comment letter: "One comment expressed concern that promulgation of final regulations requiring brokers to report on digital asset transactions could be cited by other government agencies to support treating digital assets as securities for purpose of the securities statutes, rules, and regulations. This comment requested that these regulations not take any position on whether digital assets are securities for these other purposes. The Treasury Department and the IRS agree with this comment. The potential characterization of digital assets as securities, commodities, or derivatives for purposes of any other legal regime, such as the Federal securities laws and the Commodity Exchange Act, is outside the scope of these final regulations." (https://lnkd.in/g49T3UNp)

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The Consumer Financial Protection Bureau, has proposed a rule to modify remittance provider disclosures. Currently, these disclosures inform senders they can contact state agencies or the CFPB with inquiries. The proposed rule changes this by advising consumers to contact their remittance provider directly for issues specific to their money transfer. This aims to expedite issue resolution and reduce inquiries sent to regulatory bodies that are better handled by the providers themselves. Additionally, the proposed rule adjusts model forms to make remittance provider contact information more prominent. This proposed new rule aims to improve the consumer experience in a couple of key ways: 1. Faster Resolution of Issues: By encouraging consumers to contact their remittance provider directly for transaction-specific problems, the rule aims to expedite the resolution process. Instead of navigating through state agencies or the CFPB, consumers can now go straight to the source, potentially saving time and frustration. 2. Clearer Communication: The updated disclosure and model forms will make the remittance provider's contact information more prominent, ensuring consumers know exactly where to turn when they encounter an issue. This promotes transparency and facilitates direct communication between consumers and their providers. Overall, the rule seeks to streamline the process of resolving remittance-related issues, empowering consumers to take control of their transactions and experience smoother interactions with their remittance providers. #remittance #compliance #CFPB

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I find Michael Hsu, Acting Comptroller of the Currency, to be one of the most interesting financial regulators to listen to. (Shout out to Hsu's 2022 "Don't Chase" speech on FOMO in the Fintech world. https://lnkd.in/eKxH8nRR). Hsu testified today on the Hill, https://lnkd.in/eeYuzC47, and his remarks contained a few nuggets: ▪ You can see the effect of the CFPB's influence in comments on addressing fairness and discrimination, overdraft and insufficient funds fees, and financial inclusion. ▪ Regulators are like a dog with a bone on third party management issues in bank-fintech relationships. ▪ There has been a "notable increase in the number of generative AI pilots" at larger banks. Talk about FOMO . . . ▪ Hsu is not above a gratuitous dig at the crypto industry. In referencing tokenization initiatives, he said: "In contrast to crypto, tokenization is driven by solving real-world settlement problems and can be developed in a safe, sound, fair, and compliant manner." Ouch. 💥 #fintech #bankfintechpartnerships #regulatorycompliance

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CFPB finalized its larger participant rule on digital funds transfer and payment wallet apps. I’ll have to more to say once I’ve read it, but immediately note that the CFPB made two significant changes: 1. Threshold now 50M transactions. 2. Only covers transactions in US dollars; excludes virtual currencies. Unclear if this was planned all along or result of election but it’s the right move at this time. https://lnkd.in/eFPZ4HBN

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