In its current form, the CARES Act amends the Small Business Administration’s (SBA) Section 7(a) loan program to encourage banks and credit unions to make small business loans under what is known as the “Paycheck Protection Program.” If passed, the Act would appropriate $349 billion for SBA guaranties to protect lenders against the risk of default, while also easing underwriting hurdles to finance small businesses needing additional funding for existing payroll and operating expenses (including interest on existing loans). On March 25, 2020, Secretary Mnuchin said that loan applications may be approved and funded the same day. Continue Reading
Federal banking regulators took a bold, first step this past Sunday, announcing Interagency Guidance (“the Guidance”) to encourage lenders to work with borrowers impacted by the COVID-19 outbreak. The Guidance specifically permits lenders to enter into (prudent, of course) short-term loan modifications with borrowers who are otherwise current on their loans, without classifying the loan as a “troubled debt restructure” (TDR) or placing the loan into nonaccrual status. This allows lenders to provide immediate relief to borrowers facing unexpected distress because of COVID-19 with a reduced financial impact to their balance sheets. Continue Reading
The financial services industry has been waiting with bated breath for guidance from its regulators on banking hemp and hemp-derivatives like CBD. On Tuesday, December 3, federal regulators issued a joint statement attempting to “provide clarity” on the issue. Unfortunately, that guidance had landed with a distinct thud.
Rather than providing practical guidance to the industry or a roadmap to banking hemp businesses, the regulators simply directed banks to confirm that their customers are operating in compliance with all federal and state laws, and to call the USDA or FDA if they have any questions about what that means. In the statement, financial institutions were also directed by FinCEN to stop automatically filing SARs in connection with hemp business activities, so long as the businesses are operating in full compliance with laws. Again, financial institutions are urged to call other non-banking federal and state agencies, such as the USDA or FDA (or states or tribes), if they need help figuring that out. Continue Reading
Employees change jobs all the time. There is generally nothing wrong with an employee planning his or her next move while still employed. But when an employee’s plans include gathering up his or her employer’s trade secrets to use at a new place of employment, that calculus changes. An employee who shares his or her current employer’s confidential information with the new employer may be liable for trade secret misappropriation, and the new employer can be held liable for that unlawful disclosure as well. Indeed, as we have explained here before, Washington courts still sometimes enforce a duty of confidentiality that will protect information that may not rise to the level of an actual trade secret, but that the former employer nonetheless considers to be confidential. Continue Reading