Tag Archives: Regulatory Reform

Sometimes, It Really Is a Duck: What If Things Are About to Go Bad?

Conspiracy theory fans, tin-foil hat wearers everywhere, Nostradamus wannabes, the broadly unhinged and, of course, our professional purveyors of doom and gloom roosting on evening cable news see patterns where there are none, embrace straight-line projections based on disparate and unrelated data and loudly and often shrilly bleat that the end is nigh.  That’s all … Continue Reading

Life (and Opportunity) in the Time of Considerable Government Malfeasance

I wrote a week or two back about my expectation that significant economic dislocation awaits us.  I still think that.  The morning after I published, hordes (ok, maybe not hordes) of PhD Villeins were outside my house with pitchforks and burning torches, loudly asserting that I had wildly overstated the likelihood of material distress in … Continue Reading

CECL: The Ugly Pig Running Out of Lipstick

Here is something helpful that has surfaced amidst the fallout, pain and confusion of the global COVID-19 crisis.  The implementation date for the all-too-simple in theory but not-simple-at-all in practice CECL accounting standard has been pushed back by the passage of the CARES Act for banks until the COVID-19 national emergency declared by the president … Continue Reading

Top 10 Things to Know About the Final HVCRE Rule

The Federal Reserve, OCC and FDIC have (finally) issued the Final HVCRE Rule (for background, our analysis of the 2018 Notice of Proposed Rulemaking and 2019 Notice of Proposed Rulemaking are here and here), regarding High Volatility Commercial Real Estate (HVCRE) regulations that affect acquisition, development or construction (ADC) loans made by banking organizations that are … Continue Reading

Ratings Agencies in the Crosshairs

Back in the febrile, hyperventilated times that birthed the Dodd-Frank Wall Street Reform and Consumer Protection Act (blessedly known simply as Dodd-Frank), one of the issues that energized the activists’ intent on “fixing” what was wrong was the notion that the ratings agencies were complicit in the overpricing of financial assets.  In a “want for … Continue Reading

HVCRE ADC Update: Regulators Propose Eliminating Exemption for Land Development Loans

Just when you thought the regulators had forgotten about HVCRE ADC, they issued a new notice of proposed rulemaking like they were Beyoncé surprise-dropping a new album. And then…they disappeared again! We were waiting for more news before alerting our readers but nothing has come to date. To bring those not in the HVCRE ADC-hive … Continue Reading

Beany & CECL – Episode 2

Just a few short months ago we took on the breathtakingly ill-conceived Current Expected Credit Loss (CECL) standard that the Financial Accounting Standards Board (FASB) proposed to implement starting in 2020.  CECL will require major shifts in the way lenders model, forecast and reserve for future losses.  It would materially drive up capital requirements, impair … Continue Reading

Beany & CECL

Beany & Cecil was a cartoon.  The Current Expected Credit Loss accounting rules, better known as CECL, which the FASB is insisting will go into effect at the beginning of next year for publicly traded banks and lenders and a year later for all other GAAP reporting entities is not.  Now, heaven forfend that I … Continue Reading

Commercial Real Estate and Climate Change

God help me, I’m finally writing about climate change.  This commentary assiduously avoids the obviously political (we take the view that complaining about and belittling our elected representatives and the permanent bureaucracy for doing boneheaded things is entirely apolitical).  And while even the phrase “climate change” carries with it a certain frisson of a capital … Continue Reading

Opportunity Zones: Monetary Musical Chairs, Anyone?

The new Opportunity Zones program that came to us in 2017’s major tax reform offers investors the chance to roll the capital gains from the sale of any appreciated property into new investments, located within specially designated areas known as Opportunity Zones, and defer—and potentially partially eliminate— capital gains taxes on such sale. The program … Continue Reading

The Boundaries of Risk Retention Now That the D.C. Circuit Has Spoken

In February, the D.C. Court of Appeals ruled in The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the Federal Reserve System, No. 17-5004 (D.C. Cir. Feb. 9, 2018) (the “LSTA decision”) that a manager of an open market CLO is not required to retain risk under the … Continue Reading

The Deep State, Area 51, Elvis Sightings and the Illuminati: Complexity is the New Mythos-Maker

The shear complexity of the modern world makes fools of us all. It’s no wonder that conspiracy theories, just plain weird ideas and deeply counterfactual views abound these days. We don’t like to be bewildered or shocked by unexplainable events, and, regrettably we confront plenty of these every day. Confronted with the inexplicable, it is … Continue Reading

The Winter of Our Discontent May Be Over (If you are a Distressed Debt Investor)

You can never go wrong starting off a commentary with a butchered bit from the Bard, right?  “Now is the winter of our discontent” spake Richard III, an unamiable leader perhaps reminding us all today of our unamiable governing class.  Old Gloucester rhymed to presage war and chaos.  Apparently, all that happened because the poor … Continue Reading

Repost: In Defense of Securitization – Unto the Breach or Close the Wall Up with Our Dead (with Apologies to Mr. Shakespeare)

We published the below commentary, In Defense of Securitization, last week and we are republishing it today as, let’s face it, we’re all getting very French, and many of us took most of last week off.  Enjoy, if that’s the right word. Returning to the theme of my most recent commentary entitled God Hates Securitization, … Continue Reading

In Defense of Securitization – Unto the Breach or Close the Wall Up with Our Dead (with Apologies to Mr. Shakespeare)

Returning to the theme of my most recent commentary entitled God Hates Securitization, I want to elaborate on the point I made there (yes, if you stuck with me all the way through to the end, there was a point):  We need to fight the narrative that banking, finance and securitization are evil.  I am … Continue Reading
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