MSLaw Blog

Freddie Mac published a Guide Bulletin on April 21 that summarizes recent changes to the Guide and rolls out a new Conventional Small loan product. These changes impact property inspection requirements, property management requirements and title requirements. Here’s what you need to know. The SBL Program is being folded into Freddie Mac’s conventional arm through a new product, “Conventional-Small.” This program aims to align the smaller transactions with standard Freddie Mac documentation but continues to allow for some streamlined processing that was

The rapid expansion and evolution of state and local property tax exemptions has become a critical tool in affordable and workforce housing finance. In many jurisdictions, these exemptions can materially improve project feasibility, enhance debt service coverage and, in some cases, function as a partial substitute for traditional subsidy sources. At the same time, these programs are highly jurisdiction-specific and frequently require careful structuring, ranging from nonprofit ownership overlays to public agency participation, ground lease arrangements and long-term regulatory agreements. As a

Fannie Mae recently announced updates to its Multifamily Loan Documents with Lender Letter (25-04). Since that time, Fannie Mae released a revised Lender Letter (25-04R) that changed the mandatory date for use of the loan documents from July 28, 2025 to August 4, 2025. The updates may be used immediately and must be used for: (i) all Mortgage Loans (other than forward conversions), with a confirmed Commitment Date on or after August 4, 2025, and (ii) forward conversions occurring on

President Donald Trump issued an executive order (EO) earlier this month announcing sweeping “reciprocal” tariffs on imports from countries across the world. One country missing from the EO’s increased tariffs was Russia, despite its ongoing trade surplus with the United States. In response to the scrutiny this has drawn, the White House offered existing U.S. sanctions on Russia as the basis for its exclusion. While the EO’s more substantial “reciprocal” tariffs are currently suspended (except for China), these discussions raise the

Freddie Mac published Thursday an update to the Freddie Mac Guide, which included a discussion of various underwriting, fraud detection and loan document changes. Here's what you need to know. Loan Documents/Legal Matters Most of the changes to the loan documents, including Loan Agreement and Guaranty, are minor and ministerial in nature but widespread. The biggest change is to incorporate the provisions of splitting the note riders to the Loan Agreement and Guaranty directly into the bodies of the documents. This allows Freddie

The Mortgage Bankers Association hosted its annual Commercial Multifamily Finance Convention and Expo (CREF) in San Diego last week, bringing together industry leaders, experts and professionals. Members of the Krooth & Altman GSE and HUD Team at Miles & Stockbridge headed west to network, exchange insights and engage in dynamic sessions that tackled the fast-changing economic, regulatory and political landscape. Below are some of the key takeaways from the event that are important to know. Updated Guidance Coming from Fannie Mae, Freddie Mac Fannie

The Virginia Business Professional and Occupational License (BPOL) is a local level tax levied on businesses’ gross receipts. Rates typically range from $0.03 to $0.58 per $100 of gross receipts, depending on the locality and industry classification. The tax is calculated based on the previous year’s receipts and filed annually. As a turnover tax, BPOL generally does not allow deductions for business expenses, and exemptions typical for sales and use taxes do not apply. However, there are certain exclusions that

U.S. Deputy Attorney General Lisa Monaco delivered keynote remarks March 7 at the American Bar Association’s 39th National Institute on White Collar Crime. Emphasizing the need for a culture of compliance, Monaco highlighted the continued importance of existing DOJ programs, including those related to corporate claw backs, acquisition-related disclosures and voluntary self-disclosure. Monaco also announced that the Department of Justice is designing a new whistleblower program that will use monetary rewards to strengthen corporate enforcement efforts and proactively incentivize individuals to

Maryland Comptroller Brooke Lierman issued a letter Feb. 28 to address the challenges and concerns of tax practitioners regarding the policy and procedural changes to pass-through entity (PTE) filings and payments. Most significantly, the comptroller has agreed to provide a one-time waiver for taxpayers who missed electing PTE treatment on the first filing of the year. Background The comptroller said last April that, for tax years beginning after Dec. 31, 2022, PTEs are required to elect (or not elect) to pay tax

As the Virginia General Assembly’s session nears its conclusion, lawmakers continue to revise the two-year state budget that may create significant alterations to the state’s current taxing scheme, particularly in the areas of sales and use tax. Background Virginia institutes two forms of sales and use tax: the Retail Sales and Use Tax that is historically limited to sales of tangible personal property and a handful of enumerated services at a rate of 5.3%; and the Communications Sales and Use Tax that is

The Federal Trade Commission (FTC) announced Jan. 22 annual revisions to the applicable thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act). These revisions will apply to all transactions closing on or after Feb. 21. The new minimum size of transaction threshold has been adjusted upward, from $111.4 million to $119.5 million. Under the HSR Act, the parties to any proposed acquisition of assets, voting securities or non-corporate interests meeting prescribed thresholds must notify the FTC

Many U.S. enterprises and U.S. real estate holdings have some degree of foreign ownership. Federal law requires the filing of detailed reports on foreign ownership every five years by U.S. enterprises “in which a foreign person . . . owned or controlled, directly or indirectly, 10 percent or more of the voting securities in an incorporated U.S. business enterprise, or an equivalent interest in an unincorporated business enterprise.” 15 C.F.R. part 801.10(b). The U.S. government expects this requirement to apply

The Federal Trade Commission (“FTC”) announced Jan. 23 annual revisions to the applicable thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). These revisions will apply to all transactions closing on or after Feb. 22. The new minimum size of transaction threshold has been adjusted upward, from $101 million to $111.4 million. Under the HSR Act, the parties to any proposed acquisition of assets, voting securities or non-corporate interests meeting prescribed thresholds must notify the FTC

A number of states have enacted laws requiring consumer-like disclosures in certain commercial financing transactions. These state statutes resemble the Truth in Lending Act (TILA) in certain respects but apply only to commercial loans. TILA is a federal statute that applies to consumer loans and requires disclosures of credit terms in consumer credit transactions, credit that is offered for personal, family or household purposes. The Consumer Financial Protection Bureau (CFPB) is the federal regulatory body charged with, among other things,

We have reported on the wave of laws enacted and proposed in various states requiring consumer-like disclosures in commercial financing transactions. California, New York and Utah have enacted similar commercial finance disclosure laws (CFDLs) recently. California rules implementing its 2018 CFDL went into effect this month. Utah’s CFDL will apply to certain loans on and after Jan. 1. New York’s CFDL will not go into effect until after the current rulemaking is finalized. The New York Department of Financial Services

Over the past year, we have reported on the new wave of laws enacted and proposed in various states requiring consumer-like disclosures in commercial financing transactions. These state laws are often titled “Commercial Finance Disclosure Laws.” New York and California are two states that have enacted similar CFDLs. Those laws will not go into effect until regulations are finalized. California recently published final implementing regulations on June 9, 2022, and it is anticipated that New York is not far behind.

A recent change in Virginia law may impact many individual taxpayers. Effective for taxable years beginning on or after January 1, 2022, individual taxpayers who make estimated income tax payments must submit all payments electronically if: Any estimated tax payment exceeds $1,500; Any extension payment exceeds $1,500; or The total anticipated income tax liability in any taxable year exceeds $6,000. These requirements apply to all payments, including any payments for estimated taxes, extension payments, and any other amounts related to an individual return, made

Our earlier blog post, “Companies Should Know Benefits and Risks of ESG Reporting,” provided an overview of the Environmental, Social and Governance (“ESG”) metrics, why these metrics are important to companies and shareholders, and what some of the risks are of reporting ESG goals and the results of ESG improvement initiatives. Not surprisingly, over the last few months, it has become even more apparent that ESG initiatives are not just a “flash in the pan.” Companies should treat ESG as

In a significant regulatory change that will impact real property transactions and loan financings, the Maryland Department of the Environment (MDE) joins a handful of states that requires the reporting of historical petroleum contamination above applicable cleanup standards or action levels if discovered or detected while conducting environmental due diligence investigations. The revised regulation at COMAR 26.10.08.01.B took effect on June 13, 2022. The regulation now imposes upon the environmental consultant or person conducting an environmental site assessment and/or the owner of

Last month, we reported on Maryland Senate Bill 825 and its companion House Bill 1211. The Senate Committee on Finance recently proposed material changes to Senate Bill 825, and the bill passed the Senate as modified. House Bill 1211 has since been withdrawn. As introduced, Senate Bill 825 titled “Consumer Credit – Commercial Financing Transactions” contains legislation substantially similar to the Commercial Finance Disclosure Law (CFDL) passed in New York last year. (N.Y. Fin. Serv. Law § 801 et seq.). Patterned

The rise in demand for clean and renewable energy is driving the need for available rooftop space to employ solar energy systems. Because development costs have drastically decreased and the regulatory climate has become even more favorable over the last few years, we have seen a significant increase in commercial building owners and energy developers seeking ways to access and utilize solar energy resources. This can be accomplished in a variety of ways. The most traditional model is for property owners

Highlights This Miles & Stockbridge alert provides a summary of the latest sanctions and developments regarding the ongoing situation in Ukraine. In response to Russia’s continued war operations and military attacks throughout Ukraine, the U.S. government and its allies imposed many more sanctions and new export control restrictions in the past week, specifically targeting Russian financial institutions, Russian state-owned enterprises, Russian elites,  and several of Russia's critical industrial sectors. In response to the Russian invasion and continued war operations throughout Ukraine, the U.S.

This is an update to our prior blog posts regarding Federal and Maryland State tax deadlines. The Comptroller recently announced that Maryland individual taxpayers who pay estimated quarterly taxes may defer payments for the first and second quarters of tax year 2022 until July 15, 2022. This announcement aligns with the Comptroller’s earlier announcement extending the State’s individual income tax filing and payment deadline for tax year 2021 to July 15, 2022. Details regarding the State’s automatic extension for filing 2021

Yesterday (February 24th) as part of the broader response to Russia’s invasion of Ukraine – the White House announced strict export controls as part of the Biden Administration’s strategy to “squeeze Russia’s access to finance and technology for strategic sectors of its economy for years to come.” (President Biden’s remarks are found here.)  Those controls are part of a Final Rule “Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR)” (unpublished PDF version is found here) which, although

Earlier this month, Maryland State Senator Benjamin K. Kramer introduced Senate Bill 825 titled “Consumer Credit – Commercial Financing Transactions.”  Although not obvious from the bill’s title, it contains legislation substantially similar to the Commercial Finance Disclosure Law (CFDL) passed in New York last year. (N.Y. Fin. Serv. Law § 801 et seq.).  Patterned after New York’s CFDL, the Senate proposal would require certain providers of commercial financings to disclose consumer-like loan information, similar to certain federal Truth-in–Lending Act disclosures

(Click here to read about revisions for 2023.) On January 21, 2022, the Federal Trade Commission (“FTC”) announced the annual revisions to the applicable thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). These revisions were published in the Federal Register on January 24, 2022 and will apply to all transactions closing on or after February 23, 2022. The new minimum size of transaction threshold has been adjusted upward from $92 million to $101 million. Under the

Federal Corporate and Individual Income Tax Deadlines The federal filing deadline for 2021 for calendar year end corporate income tax returns (IRS Form 1120) and individual income tax returns (IRS Form 1040) is Monday, April 18, 2022 for most taxpayers. This is a result of Washington D.C.’s Emancipation Day holiday on April 15th. By law, for tax deadline purposes, the IRS recognizes the District of Columbia’s legal observation of holidays in the same manner as federal holidays. For those taxpayers who

In late 2020, the IRS issued a notice confirming imminent proposed regulations that would allow certain tax strategies to avoid the individual $10,000 state and local tax (“SALT”) deduction limitation of the Tax Cuts and Jobs Act (“TCJA”, P.L. 115-97 (Dec. 22, 2017)). (Notice 2020-75). This notice cited a 1958 revenue ruling that allowed a partnership to subtract a local tax in calculating its net income to its partners, thereby holding that partners who use the standard deduction without itemizing

We reported last year on New York’s newly enacted commercial finance disclosure law and the legislature’s quick pivot thereafter, expanding the law’s reach to all loans up to $2,500,000 - a change from the previous limitation of $500,000. As we discussed in our prior post, the commercial finance disclosure law (CFDL) requires certain providers of commercial financings to disclose consumer-like loan information, similar to certain federal Truth-in–Lending Act disclosures that are made to consumers in consumer loans. Since our last report,

As we reported last year, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), among other things, required the Consumer Financial Protection Bureau (CFPB) to adopt regulations governing the collection of certain small business lending data. Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA), as follows: “in the case of any application to a financial institution for credit for [a] women-owned, minority-owned, or small business, the financial institution shall – (1) inquire whether

On January 19, 2022, Maryland Comptroller Peter Franchot announced an extension for the State’s individual income tax filing and payment deadline for tax year ending 2021. The announcement was made via a virtual news conference with a news release following shortly thereafter. Instead of tax filings and payments being due on April 18, 2022, the new automatic deadline is July 15, 2022. Taxpayers will not need to request an extension; instead both resident and nonresident taxpayers shall receive the automatic

With the new collection agency rule of the Consumer Financial Protection Bureau (“CFPB”) having taken effect on November 30, 2021,1 we thought we could help round out your understanding of the collection agency laws by providing an overview of the licensing of collection agencies by the states. Every state does not license, register, issue permits, or require some kind of “approval-related filing” (herein, a “license”) for collection agencies. Thirty-four states now license collection agencies, with California being the newest state to license

On November 15, 2021 (the “Effective Date”), President Biden signed into law the Infrastructure Investment and Jobs Act (the “Act”) to invest in our nation’s infrastructure and competitiveness.  The federal government regularly passes transportation bills to fund traditional road, bridge, and mass transit projects. However, the Act dwarfs those efforts in size, at over one trillion dollars, and redefines infrastructure for the modern era.  Climate change heavily influences the spending guidelines of the Act due to its undeniably large impact on

Updates and negotiations for President Biden’s tax plan continue to filter through Congress. The House Ways and Means Committee recently passed the Build Back Better Act (the “Act”), and it is now on its way for the Senate’s consideration. This is an update to our prior blog post about the tax plan released by House Democrats in September. We have noted the differences between the two proposals accordingly. Corporate Tax Provisions Corporate AMT. The Act imposes a 15% alternative minimum tax on the

In the absence of a federal law requiring disclosures be provided to small businesses, regulators in California in 2018, and now New York, have jumped into the void. With the Enactment of the New York Commercial Finance Disclosure Law (“CFDL”) on December 24, 2020, New York regulators have moved forward to propose certain disclosure regulations for those providing commercial financing to small businesses. In one of her first actions upon assuming her position, the Acting Superintendent of the New York

Big tax changes are on the way! President Biden, the House, and the Senate all seem to have their own agenda, but the proposal introduced by the House Ways and Means Committee (the “Proposal”) is a good starting point for predicting what may be in our future. Corporate and Business Tax Reforms Corporate Tax Rate: One of the Proposal’s most prominent provisions is a graduated rate structure for the currently flat 21% corporate income tax. Effective for taxable years beginning after December

Last month, the California Department of Financial Protection and Innovation (the "DFPI") published a notice inviting comments for its second rulemaking regarding the rules that will be promulgated under the new California Debt Collection Licensing Act (the "DCLA"). The DCLA was enacted pursuant to Senate Bill 908, and will become operative on January 1, 2022. Although the DFPI has not yet promulgated rules for the DCLA, the DFPI has started to accept applications for a debt collector license. With California joining

Well, summer is more than half over, and although the initial pandemic has nearly run its course, a new COVID variant appears to be on the rise. Before we hunker down and mask up to fight off this stronger DELTA version of COVID, we urge the mortgage finance community and state regulators to permanently apply the valuable lessons learned from the initial COVID convergence and allow licensed mortgage loan originators (“MLOs”), under proper conditions and safeguards, to originate residential mortgage

The COVID-19 pandemic changed the way many employers view remote work. Those who had a positive experience may be considering making telecommuting a permanent part of their workplace, but must be aware of the dangers lurking for employers who fail to take into consideration employment and tax compliance associated with remote work. Many states have overlooked temporary remote arrangements necessitated by the pandemic, but will not excuse compliance if remote work continues going forward. Many aspects of the employment relationship are

A recent federal appeals decision is sending shockwaves throughout the financial services sector. In Hunstein v. Preferred Collection & Mgmt. Services, Inc., the Court of Appeals for the Eleventh Circuit held that, under the federal Fair Debt Collection Practices Act (FDCPA), businesses and individuals operating as “debt collectors” are prohibited from communicating debtor information to third-party service providers and vendors (such as mail processors) hired to send dunning correspondence or other communications “in connection with the collection of any debt.” In

One of the best-known features of bankruptcy law is the automatic stay, which prevents a variety of actions to collect debts and to take possession or control of anything considered “property of the estate.” However, one thing that may not be considered property of the bankruptcy estate is the S-corporation (“S-corp”) status of a corporate debtor. Although at least two Bankruptcy Appellate Panels have found that the S-corp status of a debtor is property of the bankruptcy estate, the Third

In March, we reported on a new law enacted in New York at the end of last year, Senate Bill 5470-B that imposes certain Truth-in-Lending Act modeled disclosure obligations on those making or brokering certain commercial loans of $500,000 or less. We also reported on the existing New York Licensed Lenders Law that imposes a licensing obligation to make commercial loans of $50,000 or less with an annual interest rate in excess of 16 percent. We further indicated that we

The Small Business Restructuring Act of 2019, Pub. L. 116-54, 133 Stat. 1079 (Aug. 23, 2019) (“SBRA”) became effective February 19, 2020.  SBRA, among other things, created a new Subchapter V under Chapter 11 of Title 11 of the United States Code, designed to provide business debtors a more streamlined bankruptcy process for reorganization.  The streamlined process was expected to reduce the time and expense of small business reorganizations when compared to the current Chapter 11 process.  Subchapter V is

The question of whether a state mortgage finance licensing obligation arises to acquire and hold mortgage loans or mortgage loan servicing rights has often generated confusion and raised questions among mortgage finance companies buying residential mortgage loans or mortgage servicing rights. Such uncertainty as to whether a state’s mortgage lender or servicer law applies to license such activities is also shared by certain state regulators. Based on our analysis, few state mortgage finance licensing laws expressly extend the licensing obligation to purchase,

To date, the licensing and disclosure obligations for lenders and brokers of commercial loans, (including commercial mortgage loans and non-real estate-secured commercial or business purpose loans) have not received the attention of most state legislators or regulators. Few states impose a licensing obligation to make any type of commercial loans1 and there are no state laws that impose significant disclosure obligations to make commercial loans but that may be changing in 2021. As California and New York lead the way

In response to the many disruptions caused by the COVID-19 pandemic many states have made accommodations for certain licensing requirements across various industries. Last month, in our blog post “Relief from Branch Office Licensing,” we generally reported on the actions taken by many state mortgage finance regulators to temporarily allow licensed mortgage companies and their licensed mortgage loans originators (MLOs) to originate residential mortgage loans from the MLO’s unlicensed home or some other remote unlicensed location. To provide that guidance,

Last year, when COVID-19 first hit the country nationwide, many state regulators were quick to act, and temporarily allowed licensed companies and their licensed mortgage loan originators (“MLOs”) to originate residential mortgage loans from their home or another alternate location without the home or the alternate location being licensed as a branch office of the licensed company. During the past year, vaccines have been developed and approved to combat COVID-19. Although the vaccines are working, getting everyone vaccinated is taking time,

Since the beginning of the COVID-19 situation, Americans have rethought day-to-day tasks that were common before the pandemic. In the same nature, the United States Internal Revenue Service (“IRS”) recently issued a temporary deviation permitting taxpayers and representatives to use electronic or digital signatures when signing select IRS forms that once required a handwritten signature (the “Deviation”). Specifically, IRS Form 8038 (“Form 8038”) is among the list of forms that the Deviation applies to. Issuers of tax-exempt private activity bonds use

On December 27, 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTR Act) amended the employee retention credit (ERC) provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Among other changes, the ERC is now available from January 1, 2021 through June 30, 2021. Below is a description of the ERC available under the CARES Act and a list of the modifications now in place under the TCDTR Act. ERC under the CARES Act The ERC

On January 6, 2021, the office of the Maryland Comptroller announced extended filing and payment deadlines for certain Maryland business taxes and quarterly estimated income tax returns and payments. The extension will allow certain business taxes and estimated income tax returns and payments that would be due in January, February and March 2021 to be deferred until April 15, 2021. The action is similar to an extension granted last year to businesses during the early stages of the COVID-19 pandemic.

The Consolidated Appropriations Act of 2021 (CAA) was signed into law on December 27, 2020, after receiving overwhelming bipartisan support. The Act, in addition to providing appropriations for various government departments, as well as coronavirus stimulus, made a number of changes to the Bankruptcy Code (Title 11 of the United States Code). Landlords of commercial properties should be aware of certain changes directly impacting their rights under the Bankruptcy Code. The amendments addressed below, however, are temporary and, absent further

Every so often, the extent of state laws providing for the licensing of collection agencies needs to be re-examined.  As every state, including two of the most prominent states, California and New York, historically had not licensed collection agencies,1 the state licensing of collection agencies has not been given as much attention as has been given to the state licensing of other consumer finance activities.  This changed in September 2020, when the California legislature, shortly before adjournment, enacted Senate Bill

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), among other things, required the Consumer Financial Protection Bureau (CFPB) to adopt regulations governing the collection of certain small business lending data. Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA), as follows: “in the case of any application to a financial institution for credit for [a] women-owned, minority-owned, or small business, the financial institution shall – (1) inquire whether the business is a women-owned,

A recent opinion by the United States Bankruptcy Court for the Western District of North Carolina kept alive a bankruptcy trustee’s fraudulent conveyance claims based on, in part, the Internal Revenue Code (“IRC”) 10-year statute of limitations period to avoid fraudulent transfers—rather than a shorter limitations period under state law. The case is Mitchell v. Zagaroli et al. (In re Peter Lawrence Zagaroli), Case No. 18-50508, Adv. Proc. No. 20-05000, 2020 WL 6495156 (Bankr. W.D.N.C. November 3, 2020). In Zagaroli, the

Background   On August 8, 2020, a Presidential Memorandum was issued that allowed employers to defer withholding and payment of certain payroll tax obligations of their employees. To implement the Presidential Memorandum, the IRS issued Notice 2020-65 (“Notice”) on August 28, 2020, which gave employers the option to defer withholding of employee-side Social Security taxes from employee paychecks. The Notice allowed for the deferral of such withholding for wages paid from September 1, 2020 to December 31, 2020, if the wages were

Most state mortgage finance, consumer credit, collection agency, sale finance, and money service business licensing laws have a provision that dictates what needs to be done or what needs to be filed in connection with the change in control of a licensee, such as when a licensed entity is going to be acquired by a new owner, when an investor looks to acquire a licensed entity, or when the ownership of a licensee is restructured. All too often the state

In 2017, the Tax Cuts and Jobs Act (the “Act”) added a third minimum set-aside option to qualify a project as a qualified low-income project pursuant to Code Section 42(g)(1)(C)—the Average Income Set-Aside. The Average Income Set-Aside permits the owner to designate rest-restricted units to be occupied by qualified tenants so long as the average imputed income limitation for all the low-income units is 60% or less of the area median gross income (“AMGI”). To calculate the average, the owner

In our Legislative Alert of October 13, 2020, we reported on the California legislation enacted in late September, Assembly Bill 1864, that created the new California Consumer Financial Protection Law (“CCFPL”),1 and we set out certain of the activities that trigger a registration obligation.  As we last reported, the CCFPL, when it takes effect on January 1, 2021, will be administered by the Department of Financial Protection and Innovation (the “DFPI”). The DFPI is the new name of the California

Its Presidential election time, and we strongly encourage you to vote on or before November 3rd. If you have not yet done so, please vote, whoever may be your preference. Now that we have addressed our civic duty, we also encourage you to elect to renew any state licenses you hold through the Nationwide Multistate Licensing System (“NMLS”). Regardless of whether you hold a mortgage finance, consumer credit, money service business, collection agency, other state license through the NMLS, the renewal period

The new California law discussed in this Legislative Alert does not have the earth-shattering significance of Trump versus Biden, or even Godzilla versus Mothra, but tremors have originated on the Pacific coast and are likely to be felt near the Potomac and in all lands in between. Late last month, California Governor Gavin Newsom signed into law California Assembly Bill 1864, creating a state agency that is analogous to the federal Consumer Financial Protection Bureau ("CFPB"), an agency that has been under

House Bill 7370 has gained additional support since we last reported on the Protecting Employees and Retirees in Business Bankruptcies Act of 2020 (PERBBA) and related Senate Bill 4089. Support for the bill now totals twenty-eight Democrat sponsors and co-sponsors. On September 29, 2020, House Bill 7370 advanced from the House Committee on the Judiciary to the full House for consideration, with a 20-10 committee vote along party lines. If enacted as proposed, PERBBA would make significant changes to the bankruptcy

The Small Business Restructuring Act of 2019, Pub. L. 116-54, 133 Stat. 1079 (Aug. 23, 2019) (SBRA) became effective February 19, 2020. SBRA, among other things, created a new Subchapter V under Chapter 11 of Title 11 of the United States Code. Its purpose was to provide business debtors a more streamlined bankruptcy process for rehabilitating and restructuring debts when compared to a traditional Chapter 11 case. A further goal was to reduce the time and expense of small business

A bill recently introduced in the House of Representatives would temporarily expand federal protections under the Fair Debt Collections Practices Act (FDCPA)—the federal statute that limits aggressive debt-collection activities. The House proposal, H.R. 7796 (titled the “Consumer Relief During COVID-19 Act”), is similar to a Senate bill that was introduced in March. Two major differences between the bills, however, are worth noting: First, as its title indicates, the Senate bill, S. 3565 (titled the “Small Business and Consumer Debt Collection Emergency Relief

With the economic effects of the COVID-19 pandemic, the number of Chapter 11 bankruptcy filings, both large and small, has increased and more are expected. Struggling businesses that filed for bankruptcy relief could not take advantage of Paycheck Protection Program Loans (“PPP Loans”) authorized under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Debtors became creative in their efforts to obtain and retain PPP Loans, often relying on the timing of filing (or dismissing and refiling) or supplemental

With the COVID-19 pandemic creating a significant upswing in Chapter 11 bankruptcies and with more expected to come, Congress is once again considering substantial changes to the way the Bankruptcy Code addresses worker compensation, retiree benefits and collective bargaining agreements with the Protecting Employees and Retirees in Business Bankruptcies Act of 2020 (PERBBA), introduced recently in both the House and the Senate (House Bill 7370; Senate Bill 4089). PERBBA is the latest iteration of legislation designed to add additional worker

With COVID-19 holding the global economy captive, Congress is attempting to head off what they predict will be an economic tidal wave of evictions, foreclosures and civil judgments by introducing The Small Business and Consumer Debt Collection Emergency Relief Act of 2020 (the “Bill”). Per its Senate sponsors, the Bill would modify and expand the Fair Debt Collections Practices Act or FDCPA (the “Act”)—the federal statute that regulates consumer debt collection practices—to better protect individuals during national emergencies and also

On April 15, 2020, we provided an industry alert giving a summary of the initial structure of the Main Street Lending Program (MSLP). Since that date, the Board of Governors of the Federal Reserve System (the “Board”) has posted Term Sheets and Frequently Asked Questions dated April 30, providing additional clarity on the three facilities comprising the MSLP. This piece provides an overview of the MSLP in light of the additional guidance. MSLP is distinguished from the Payroll Protection Plan

On April 30, 2020, the Internal Revenue Service (IRS) issued Notice 2020-32 (the “Notice”) to address the deductibility of loan amounts received under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In summary, the IRS stated no tax deduction will be allowed for expenses paid with PPP loan proceeds to the extent such amounts are forgiven under the terms of the CARES Act. This alert outlines the PPP loan forgiveness provision

The coronavirus has had an adverse impact on many businesses and affected their ability to meet financial obligations. To relieve financial strain, business owners have various options to discharge debt, modify loans and transfer property to their lenders. Below are some of the tax issues a business should consider when assessing debt relief options. Note this list is not exhaustive, and the options available will vary depending on a business’s particular situation. Transferring Property to Lender. The tax treatment of a

On March 5, 2020, Maryland Governor Larry Hogan proclaimed a state of emergency related to COVID-19. Pursuant to that proclamation, Governor Hogan and the Office of the Comptroller of Maryland (the “Comptroller”) have taken various actions to provide Maryland citizens with tax and reporting relief. Additionally, on March 23, 2020, Governor Hogan authorized $130 million in funding for the Maryland COVID-19 Emergency Relief Fund Programs for Small Businesses (the “Relief Fund”) and $7 million in funding for the COVID-19 Layoff

On April 9, 2020, the IRS issued Notice 2020-23 (the “Notice”), which extends additional tax deadlines to cover individuals, estates, corporations and others. The Notice also provides relief with respect to certain “Specified Time-Sensitive Actions” that are due to be performed on or after April 1, 2020, and before July 15, 2020. For purposes of the Notice, the term “Specified Time-Sensitive Action” includes certain deadlines for taxpayers to identify property and complete a 1031 exchange. It also includes the prescribed

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748 (the “Act”), which contains a host of tax measures as part of a $2 trillion aid package to provide economic stimulus in the wake of the COVID-19 pandemic. While the focus of the legislation is not tax, a large number of tax provisions are included in the Act, which affect both individuals and businesses. Important Note:  The following is a general summary of

The Treasury Department suspended sales of SLGS on March 1, 2019. The U.S. Department of the Treasury has announced that it will reopen the SLGS window effective August 5, 2019 at 12:00 Noon ET.     The full announcement is available here. Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author

On April 16, 2019, Treasury issued its second set of proposed regulations (“OZ Regs 2”) regarding Section 14002 of the Internal Revenue Code of 1986, as amended (the “Code”). The OZ Regs 2 are very helpful and answer a substantial number of questions left open in the initial set of Opportunity Zone (“OZ”) regulations. First, the bad news: while the new rules are generally taxpayer friendly, they contain one significant disappointment, a negative answer to both the triple net lease

The U.S. Department of the Treasury’s Bureau of the Fiscal Service (the “Treasury”) announced on February 22, 2019 the suspension of sales of State and Local Government Series (SLGS) nonmarketable Treasury securities, effective 12:00 noon Eastern Time, March 1, 2019. A SLGS suspension, also known as closing the SLGS window, refers to when the Treasury no longer accepts new subscriptions for SLGS securities. The Treasury will reopen the SLGS window when Congress enacts, and the President signs, legislation suspending or raising

On October 19, 2018, the IRS issued highly anticipated proposed regulations on opportunity zones. The guidance and interpretations in these regulations provide a clearer path for investment in the new “Opportunity Zone” program, a program that incentivizes the movement of capital into those low-income communities in all 50 states, the District of Columbia, and 5 U.S. territories now designated as qualified opportunity zones (“Opportunity Zones”) by offering taxpayers who invest in these Opportunity Zones 3 separate tax benefits – (1) temporary capital gain deferral;

The U.S. Department of Treasury (“Treasury”) is expected to issue regulations providing administrative rules and guidance to clarify the operation and application of the Opportunity Zone program (the “OZP”); such regulations are currently under review by the Office of Management and Budget as of the date hereof. This long-awaited Treasury guidance is expected as early as the end of October 2018. In December 2017, Congress passed the Tax Cuts and Jobs Act, which amended the Internal Revenue Code (the “Code”) to

“Supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance.” On September 11, 2018, the Bureau of the Consumer Financial Protection, together with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency (the “agencies”) issued a joint statement clarifying the role of supervisory guidance (the “Joint Statement”), stating unequivocally that “[s]upervisory

The state of Delaware recently enacted an amendment to the Delaware Limited Liability Company Act (the “Act”), effective August 1, 2018, which allows a limited liability company to divide into two or more limited liability companies, with the assets, liabilities and duties allocated among those companies in a plan of division. In order to divide a limited liability company, new Section 18-217 of the Act provides that the original limited liability company must adopt a plan of division and file

On June 21, 2018, the Supreme Court of the United States issued a much anticipated decision in South Dakota v. Wayfair, Inc., No. 17-494, which involved a challenge to a South Dakota statute imposing a sales tax collection requirement on Internet retailers who sell merchandise or provide a service in South Dakota, even if the retailer has no physical presence or employees there.  This 5–4 decision has far reaching implications for on-line sales, because it opens the door for any state to

Infrastructure investment is part of nearly every government wish list at the local, state and federal level. However, instead of just seeking to finance new infrastructure Washington D.C. has decided to approach the infrastructure issue by first analyzing its current infrastructure, including deferred maintenance. This effort has been viewed favorably by S&P Global Ratings (“S&P”) with a recommendation that other state and local governments conduct the same analysis. The District took a look at infrastructure financing during the development of its

The Consolidated Appropriations Act of 2018, which was signed into law on March 23, 2018, included two provisions affecting the low-income housing tax credit (“LIHTC”) program. One provision temporarily increased the total dollar amount of LIHTC that can be allocated. The other provision added a new minimum set-aside (the “Income Averaging Set-Aside”) that, for the first time, permits units occupied by tenants with incomes greater than 60% of area median income (“AMI”) to qualify as LIHTC units. Although the potential

The “Opportunity Zone Program” (“OZP”) was enacted as part of the Tax Cuts and Jobs Act of 2017 and is the first new economic development tax incentive program since the New Markets Tax Credits Program was enacted in 2000. OZP is designed to provide a federal tax incentive for investors to reinvest capital gains generated in 2018 into economically distressed areas. The incentive is two-fold: first the deferral, until December 31, 2026, of taxation of the amount of capital gain

On April 11, 2018, the Internal Revenue Service published Revenue Procedure 2018-26 (“Rev. Proc. 2018-26”), providing new guidance to issuers on the availability of remedial actions to preserve the status of tax advantaged bonds to cure nonqualified use of bond proceeds. Prior to the issuance of the new Revenue Procedure, the only remedial action available in connection with certain long-term private leases financed with tax-exempt bonds was a redemption or defeasance of the bonds. Now, however, the expansion of the remedial action rules

In 2015, Congress passed the Bipartisan Budget Act that created a new Centralized Partnership Audit regime that is effective for income tax returns filed of partnership taxable years beginning after December 31, 2017. These new changes will impact the ways partnerships structure their partnership agreements and the way they interact with the IRS. I.    Reporting Requirements of Partnerships Generally For federal income tax purposes, a partnership is not a taxable entity. Instead, a partnership is a conduit, and the items of partnership

The corporate rate reductions included in the Tax Cuts and Jobs Act decreased the value of the Low-Income Housing Tax Credit (“LIHTC”) projects because a significant portion of an investor’s return is composed of federal income tax losses. In an effort to restore a portion of the lost value, the Consolidated Appropriations Act, 2018 (the “Act”) included two improvements to the LIHTC program that would (1) increase the amount of LIHTC allocations and (2) create a new minimum set aside test that

For a U.S. business enterprise that has or recently had 10% foreign ownership, May 31, 2018 is an important filing date. That Thursday is the general reporting deadline for submitting to the U.S. Department of Commerce, Bureau of Economic Analysis (“BEA”), a mandatory survey (Form BE-12) which details the extent of foreign investment in a U.S. business, or U.S. affiliate/division of a foreign business. This “benchmark” survey occurs every five years. Many U.S. companies do not know or have forgotten about

On April 3, 2018, in preparation for the discontinuation of the London Interbank Offered Rate (LIBOR; for background on the discontinuation of LIBOR, see our prior blog post), the Federal Reserve Bank of New York (“Reserve Bank”) began publishing three new reference rates. The three new rates are the Secured Overnight Financing Rate (SOFR), the Broad General Collection Rate (BGCR), and the Tri-Party General Collateral Rate (TGCR). The new reference rates, which are based on overnight repurchase agreement (repo) transactions collateralized

The DLLR recently issued new guidance concerning the Maryland Healthy Working Families Act for employers. The new guidance takes the form of sample policies and updated or new responses to the previously posted frequently asked questions. The new guidance is helpful and may answer some of the questions employers face as they implement the Act. The new guidance may be found here. The sample policies address three different scenarios: (i) an employer that awards sick and safe leave at the beginning of

Property Assessed Clean Energy (PACE) financings are an alternative financing tool used to finance energy efficiency upgrades or renewable energy projects in residential, commercial and industrial properties. PACE financings allow for the payment of the costs of the energy project over time which is tied to the property, and not to the property owner.   In a December 7, 2017 letter, the U.S. Department of Housing and Urban Development (“HUD”) stated that the Federal Housing Administration (“FHA”) would no longer insure

The U.S. Department of the Treasury’s Bureau of the Fiscal Service (the “Treasury”) announced on February 9, 2018, that the Treasury is resuming the sale of State and Local Government Series (SLGS) nonmarketable Treasury securities, effective February 12, 2018, at 12 p.m. ET. As discussed in our December 7, 2017, alert, the Treasury suspended the sales of SLGS on December 6, 2017. The suspension was necessary to assist with Treasury's management of the debt subject to limit. On February 9, 2018, President Trump signed

In October 2017, the United States Senate voted to invalidate a rule promulgated by the Consumer Financial Protection Bureau (“CFPB”), which would have prohibited financial institutions from using arbitration agreements in which the consumer waives the right to participate in a class action. The rule—which was announced by the CFPB in July 2017 and was not yet in effect at the time it was invalidated—prohibited class action waivers imbedded in consumer arbitration agreements (the “Arbitration Rule”). If the Arbitration Rule

On January 8, 2018, Senators John Cornyn (R., Texas) and Elizabeth Warren (D., Massachusetts) introduced a bill that, if passed, would require companies to file for relief under the bankruptcy code in a court near its principal place of business or where the principal assets of the company are located. See Senate Bill 2282. The proposed legislation removes language currently contained in 28 U.S.C. § 1408 that permits companies to file for bankruptcy where they are incorporated or where smaller affiliates operate. See 28

The U.S. Department of the Treasury’s Bureau of the Fiscal Service (the “Treasury”) announced on December 6, 2017 the suspension of sales of State and Local Government Series (SLGS) nonmarketable Treasury securities, effective 12:00 noon Eastern Time, December 8, 2017. A SLGS suspension, also known as closing the SLGS window, refers to when the Treasury no longer accepts new subscriptions for SLGS securities. The Treasury will reopen the SLGS window when Congress enacts, and the President signs, legislation raising the debt

2017 tax reform efforts may alleviate adverse deemed dividend tax treatment of foreign subsidiary support for the obligations of U.S. parent companies.  Present support is limited to the pledge of 66 ⅔rds of the stock in foreign subsidiaries, but that may change depending on the final Senate bill and the outcome of the conference committee deliberations. Current Law U.S. shareholders owning 10% or more of a controlled foreign corporation (CFC) are required to include in current income for U.S. tax purposes their

Introduced on November 9, 2017, the Senate Tax Bill would maintain private activity bonds (“PABs”). With this positive development, advocates will press Senate committee members to reverse their decision to terminate advanced refundings as of December 31, 2017. Advanced refundings represent almost 27% of the bond market according to Thompson Reuters. The end of advanced refundings would have a major impact on issuers and the market. Advanced refundings provide flexibility to issuers, and their termination would prevent issuers from taking

Some of the potential impacts of the proposed Tax Cuts and Jobs Act (the “Act”), as currently drafted and described in our prior alert are summarized below for consideration. Draw-down bonds with an outstanding amount to be drawn may need to be drawn and/or escrowed prior to the effective date of the Act (currently proposed as December 31, 2017) to avoid potential characterization of post-effective date draws as newly issued bonds. There is some support for the concept that each draw of a draw-down

On November 2, 2017, the House Committee on Ways and Means released a draft of its Tax Cuts and Jobs Act (the “Tax Bill”). The Tax Bill proposes to eliminate the federal tax exemption of interest income from all private activity bonds (e.g., exempt facility bonds, qualified 501(c)(3) bonds, qualified small issue bonds, qualified mortgage bonds, qualified redevelopment bonds and qualified veterans’ bonds), all tax credit bonds (e.g., qualified zone academy bonds, qualified energy conservation bonds, and new clean renewable

Property Assessed Clean Energy (PACE) Bonds are a financing tool used to finance energy efficiency upgrades or renewable energy projects in residential, commercial and industrial properties. Such projects might include increased insulation, sealing of air leaks, cool roofs and solar panels.   In a typical structure, a state, municipality or state/local agency would issue bonds and use the proceeds to provide loans to various individual homeowners and/or business owners. The property owner would use the proceeds of the loan to pay

The Internal Revenue Service (the “IRS”) and The U.S. Department of the Treasury (the “Treasury”) proposed regulations on September 28, 2017 to update and streamline the public approval requirement applicable to tax-exempt private activity bonds issued by State and local governments (the “Proposed Regulations”) as imposed under the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA Notice”). Issuers must comport with the TEFRA Notice requirement (see section 147(f)) when issuing all types of tax-exempt private activity bonds, as defined in section 141(e). Issuers can opt

For a creditor, the difference between a perfected and unperfected security interest can mean the difference between full repayment and receiving mere pennies on the dollar (or nothing) in a bankruptcy. On August 30, 2017, a Wisconsin court (United States Sec. & Exch. Comm'n v. ISC, Inc.. 2017 WL 3736796 (W.D. Wis. Aug. 30, 2017)), provided a helpful reminder of the attention to detail that is required when drafting a UCC-1 financing statement (“UCC-1”) to ensure the security interests are

Each business day, shortly before 12:00 p.m. London time, the London Interbank Offered Rate, or LIBOR, is published. The rate, which is the average of up to 20 banks’ estimates of the interest rate at which they can borrow from other banks, is a benchmark for financial contracts estimated to be worth approximately $350 trillion, including corporate loans, mortgages, derivatives, and tax-exempt bonds. However, the rate’s days appear to be numbered, and market participants must prepare for the possibility that

Green Bonds and Social Impact Bonds are examples of sustainable investment products. These investments are issued with a particular sustainable purpose in mind. In the case of Green Bonds, the proceeds of such bonds must be for an environmentally friendly project, such as renewable energy, energy efficiency or water/waste sustainability that will have measurable environmental impact.  Social Impact Bonds are used to finance the testing of social impact programs (such as prevention of recidivism), and the investors are only paid

On June 12, 2017, the Supreme Court of the United States (the “Court”) issued a decision clarifying who qualifies as a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. In the case of Henson v. Santander Consumer USA, Inc., No. 16-349 October Term, 2016, 582 U.S. __ (2017), the Court examined “how to classify individuals and entities who regularly purchase debts originated by someone else and then seek to collect those debts for their own account.” Slip

Following the global financial crisis of 2007-2009, the Board of Governors of the Federal Reserve System (the “Board”), the Federal Deposit Insurance Corporation (the “FDIC”) and the Office of the Comptroller of the Currency (the “OCC”) issued in 2013 the Interagency Guidance on Leveraged Lending (the “Initial Guidance”), providing guidance to regulated entities (i.e. banks) on the appropriate origination of leveraged lending. The Initial Guidance acknowledged the important role of leveraged lending in the U.S. financial industry, while also recognizing the risk

As cautioned in my recently co-authored article, “The Future Isn’t Promising for Retailers”, that appeared in the Baltimore Business Journal on March 10, 2017, the retail sector may be primed to see numerous more going out of business sales as the shakeup in traditional “bricks and mortar” retailing continues unabated.  With brands such as Gymboree, Ann Taylor, Payless Shoes, and other household names making headlines for their bankruptcy filings, store closings, and restructurings, it is critical that landlords and trade creditors doing business

Companies and investors are growing increasingly impatient with the delay by the Securities and Exchange Commission to issue final rules implementing Title III of the Jumpstart Our Business Startups Act of 2012.  As a result, many are turning to the states in an effort to establish a crowdfunding marketplace. To this end, a number of state legislatures have now proposed their own equity crowdfunding laws, and several have proceeded with enacting such laws. However, these new rules are limited to

On October 23, 2013, the Securities and Exchange Commission (the “SEC”) issued its proposed rules to implement Title III of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which would permit companies to raise up to $1 million a year from an unlimited number of investors, including non-accredited investors, through intermediaries registered with the SEC, while remaining exempt from the Securities Act registration requirements. See Proposed Rules to Implement JOBS Act, available at http://www.sec.gov/rules/proposed/2013/33-9470.pdf. Commonly referred to

On July 10, 2013, the Securities and Exchange Commission (the “SEC”) adopted rules under Title II of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which included lifting a ban on general advertising and general solicitation in certain offerings of securities conducted pursuant to Rule 506 of Regulation D. These final rules will become effective on September 23, 2013. Rule 506(b) currently provides an exemption from the Securities Act registration requirements for issuers selling securities to an unlimited

Through the highly publicized success of crowdfunding platforms operated by companies such as Kickstarter, Inc., Indiegogo, Inc. and CrowdRise, LLC, companies are increasingly considering crowdfunding as a source of new investment. There are three main crowdfunding models. The most commonly known model is the “rewards based” or “donation based” model, such as Kickstarter, Inc., where an individual receives a product or some kind of perk in return for their investment. This crowdfunding model is not considered to involve an offer