As the premier trade association of the asset-based lending and factoring industries, one of CFA’s core functions is to represent its members on critical public policy and legal issues that could have an impact on the commercial finance industry. CFA’s advocacy program is directed by its Advocacy Committee.
The CFA Advocacy Committee determines the Association’s position and strategy on legislative and regulatory issues that could affect the asset-based lending and factoring industries. The Committee also works with CFA’s Co-General Counsel to identify and approve actions the Association takes on legal issues affecting the industry, including amicus curiae briefs.
CFA & LSTA Response to the ABI Commission to Study the Reform of Chapter 11
Friday, December, 5, 2015
The following joint statement is attributed to the CFA and LTSA (Loan Syndication & Trading Association):
The United States Bankruptcy Code is viewed around the world as the gold standard for the way it permits the reorganization of distressed businesses, while protecting the legitimate interests of creditors. Indeed, the empirical evidence and academic research demonstrate that Chaper 11 has been remarkably effective - particularly in the wake of the financial crisis in 2008 - in allowing companies quickly and efficiently to address their financial problems, while preserving business operations, saving jobs, and protecting the rights of creditors. The ongoing recovery of the U.S. economy from the depths of the financial crisis is a testament to our well-functioning bankruptcy system.
While we were not provided an advance copy of the Commission's report, it is our understanding that it proposes major reforms of a system that, at most, needs modest tweaking. Indeed, many of the report's recommendations are solutions in search of a problem. Moreover, some of the recommendations would undermine the Bankruptcy Code's fundamental protections for secured creditors' rights - protections that are central to the success of our bankruptcy system. The inevitable result of those "reforms" would be to limit American businesses' access to credit, which would ultimately impair economic growth and job creation at a time when the U.S. economy needs them most.
CFA/LSTA Bankruptcy Report WEBINAR
On Thursday, December 11, 2014, CFA and LSTA hosted a joint webinar in response to the ABI Report, covering topics that included:
What does the Report say?
What does it mean for secured lenders?
What does it mean for distressed investors?
Where do we go from here?
Watch the recorded webinar by clicking here.
You will be taken to the LSTA site and be asked to register before being taken to the webinar. The entire webinar is one hour and 30 minutes in length.
Regulatory Alert: Leveraged Lending Guide FAQs Released
In March of 2013, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation jointly issued supervisory guidance on leveraged lending.
Since the publication of the guidance, there have been many questions relating to how the agencies are interpreting and implementing the guidance. In response, the OCC recently published a series of FAQs to address these questions.
In an ongoing effort to help CFA members understand and follow the guidance, we've posted the FAQs on our website. To view and/or download the 26 questions and answers, please click here
OCC Releases Asset Based Lending Handbook to Guide Examiners Assessment of ABL
On March 27, 2014, the Office of the Comptroller of the Currency (OCC) released its Comptrollers Handbook on Asset Based Lending. The booklet provides guidance to examiners and bankers regarding ABL activities and risks, prudent credit risk management and underwriting expectations, credit administration, and credit risk rating. Risk-based expanded examination procedures are provided to guide ABL examinations. Expanded topics include ABL structures, credit analysis, evaluating borrower liquidity, establishing a borrowing base and prudent advance rates, collateral controls and monitoring systems, and credit risk rating considerations. The booklet also includes transaction examples to guide examiners and bankers in the assessment of credit risk.
The 78 page ABL Handbook replaces the Accounts Receivable and Inventory Financing booklet of the Comptroller’s Handbook, issued in March 2000, and replaces ABL guidance in section 214, “Other Commercial Lending,” issued in October 2009 as part of the Office of Thrift Supervision’s (OTS) Examination Handbook.
The OCC declined CFA’s offer to provide input during the drafting process but has requested that feedback on the final version be solicited from CFA members. CFA’s Advocacy Committee is collecting feedback from all CFA members. The Advocacy Committee’s OCC & Regulatory Affairs Subcommittee will synthesize the comments collected and provide feedback to the OCC as requested.
To access the ABL Handbook, click here