Please note that the seminar scheduled for Monday, November 17 "Loan Participations" has been moved to December 15th at the Santa Barbara Biltmore Hotel, 1260 Channel Drive, Santa Barbara. If you need additional information please contact Monique Billingsley or Summer Myers at (949) 474-1944.

The Department of Treasury unveiled additional information on the Capital Purchase Program (“CPP”) on November 17, 2008, when it announced the CPP term sheet for privately held institutions. In conjunction with the term sheet, the Treasury also issued related FAQs. As part of its announcement, the Treasury noted that the CPP application deadline for privately held institutions is December 8, 2008.

According to the new term sheet, for purposes of the CPP, a privately held financial institution would include: (i) any non-publicly traded top-tier Bank Holding Company (“BHC”) or top-tier Savings and Loan Holding Company (“SLHC”) that engages solely or predominantly in activities permissible for financial holding companies under relevant law; (ii) any non-publicly traded U.S. bank or U.S. savings association not controlled by a BHC or SLHC; or (iii) any non- publicly traded U.S. bank or U.S. savings association that is controlled by a non-publicly traded SLHC and does not engage solely or predominantly in activities that are permitted for financial holding companies under relevant law. Not included in this definition are S corporations and mutual depository institutions. Read more...

  PrivatelyheldinstitutionCPParticle.pdf (80k)

The FDIC has issued an interim final rule implementing the agency’s Temporary Liquidity Guarantee Program (TLGP), consisting of unlimited insurance coverage for certain accounts and the guarantee of certain newly issued senior unsecured debt. The FDIC announced the TLGP in mid-October in order to promote liquidity and bolster confidence in the U.S. banking system. Recently, the FDIC issued FIL-125-2008 announcing that it is extending the time period for opting out of the TLGP.

Eligible institutions are automatically enrolled in the TLGP without cost for the first 30 days. Originally, organizations that do not wish to participate in either aspect of the program were required to opt-out by November 12, 2008. However, the FDIC has extended that deadline, giving organizations until December 5, 2008 to opt-out; after that date, institutions will be charged a fee for their participation. Once an organization has made a decision to opt-out, that decision is irrevocable. Likewise, a decision to continue to participate in either aspect of the TLGP also is irrevocable. Read more...

  FDICTempGuarantyLiquidityProgramandDepositInsuranceIncreaseREVISED.pdf (71k)

Recently, the Federal Emergency Management Agency (FEMA) declared certain areas in Southern California as major disaster areas as a result of the devastation caused by the widespread fires; specifically, the counties of Santa Barbara, Los Angeles, Orange and Riverside have been designated as disaster areas. As a result of the declaration, financial institutions have the opportunity to receive positive consideration under the Community Reinvestment Act for loans, investments and services that revitalize or stabilize these designated disaster areas. Note that an activity will be considered to revitalize or stabilize a designated disaster area if it helps to retain existing businesses or residents or attracts new businesses or residents and is consistent with a recovery plan in the designated disaster area.

For example, loans to small businesses that have suffered disaster-related cash flow problems or that need funds for working capital to recover from the adverse impact of the fires would qualify as an activity that would stabilize the designated disaster area. Another example might be allowing existing small business borrowers to defer payments on their loans for a specified time period, say 90 days. Such decisions, of course, must be consistent with the safe and sound operation of the financial institution. Read more...

  CRACDPotentialfromFires.pdf (68k)

Do good things come to those who wait (and wait and wait)? Well, the U.S. Department of Housing and Urban Development (HUD) would certainly like us to think so. On November 13, 2008, HUD announced its final revisions to its Real Estate Settlement Procedures Act (RESPA) regulations, including brand new formats for the good faith estimate (GFE), HUD-1 (and HUD-1A) settlement statement disclosures and servicing disclosure statement. According to HUD, the new disclosures will “empower the average family to shop for the most appropriate loan to meet their needs.”

It is HUD’s hope that the new disclosures will “improve disclosure of the key loan terms and closing costs consumers pay when they buy or refinance their home.” HUD received about 12,000 comment letters following its proposed changes to Regulation X (the regulation implementing RESPA) issued earlier this year. Read more...

  HUDFinalizesRevisionstoRESPADisclosures.pdf (69k)