Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

On December 7, 2015, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against debt collection firm Collecto, Inc. d/b/a EOS CCA (EOS) for allegedly violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The CFBP’s complaint, which was filed in federal district court in Massachusetts, alleges that in 2012 EOS paid AT&T $35.4 million for a portfolio of more than three million cellphone accounts that had a face value of approximately $2.3 billion.  The CFPB alleges that despite EOS learning that the portfolio contained fraudulent, already paid, or already settled debts, EOS

  • continued to take action to attempt to collect the debt from consumers;
  • reported to credit reporting companies inaccurate information, including that all three million consumers disputed the debt despite knowing that not all debts were disputed; and
  • collected nearly $743,000 on more than 2,300 accounts that consumers disputed and EOS failed to verify.

Although EOS has not admitted any wrongdoing, EOS and the CFPB agreed to a Stipulated Final Judgment and Order which, if approved by the court, would require EOS to

  • stop collecting and reporting on consumer debt that has been disputed by consumers and which EOS is unable to verify or substantiate;
  • stop collecting on debt that EOS has reason to believe contains inaccurate information;
  • stop reselling debt that it obtains from other debt collectors, for five years;
  • ensure information provided to credit reporting companies is accurate; and
  • pay a $1.85 million civil penalty.

The enforcement action against EOS is just the latest in a number of CFPB enforcement actions related to debt collection services, underscoring a clear priority for the CFPB.  Indeed, the CFPB’s November 20, 2015 Semi-Annual Report noted that approximately 30 million consumers currently have accounts in collection and that debt collection complaints accounted for 32 percent of all consumer complaints received by the CFPB from October 1, 2014, through September 30, 2015.  Further, the CFPB’s Fall 2015 rulemaking agenda, indicates that the CFPB is currently conducting research in anticipation for rulemaking related to debt collection activities.

You can view the CFPB complaint against EOS here:  http://files.consumerfinance.gov/f/201512_cfpb_complaint-eos.pdf.

You can view the CFPB and EOS Stipulated Final Judgment and Order here:  http://files.consumerfinance.gov/f/201512_cfpb_proposed-consent-order-eos.pdf.

You can view the CFPB’s November 20, 2015 Semi-Annual Report here:  http://files.consumerfinance.gov/f/201511_cfpb_semi-annual-report-fall-2015.pdf.

You can view the CFPB’s Fall 2015 rulemaking agenda here:  http://www.reginfo.gov/public/do/eAgendaMain.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at zane.gilmer@stinson.com or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

Although primarily a transportation bill, the FAST Act contains other provisions, including provisions simplifying securities laws and another provision fixing the Dodd-Frank Act.  As describe by CFTC Commissioner J. Christopher Giancarlo “The Dodd-Frank Act created the vehicle of swap data repositories to compile data on global swaps transactions providing international regulators with essential information necessary in the event of a future crisis. Yet, a major flaw in Dodd-Frank imposed indemnification obligations on overseas regulators in order to share this critical information, which has been preventing international data sharing for swaps transactions. As a result, seven years after the financial crisis, regulators still do not have full transparency into global counterparty credit exposure that Dodd-Frank was designed to provide.”

Section 86001 of the FAST Act addresses this by eliminating the indemnification requirement and replacing it with a requirement that a written agreement be obtained which requires compliance with certain statutory confidentiality obligations.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

The CFTC issued an Order filing and simultaneously settling charges against Arya Motazedi for engaging in fraudulent transactions in the New York Mercantile Exchange’s (NYMEX) RBOB Gasoline Physical futures contract and CL Light Sweet Crude Oil futures contract involving two personal accounts he owned or controlled and a company account he traded for his former employer.

Among other things, the Order alleges that Motazedi accomplished his fraud by misappropriating non-public, confidential, and material information. According to the CFTC, Motazedi and his employer shared a relationship of trust and confidence that gave rise to a duty of confidentiality. In addition, the CFTC alleges that his employer’s internal policies prohibited the misuse of proprietary or confidential information, and prohibited employees from engaging in personal transactions involving energy contracts and other personal transactions that created an actual or potential conflict of interest. Based on his position as a gasoline futures trader, Motazedi routinely had access to material non-public information concerning the times, volume, and prices at which his employer intended to trade energy commodity futures for its proprietary account. The CFTC further found Motazedi breached his duties to his employer by using this information to trade in personal trading accounts and by failing to disclose such trading to his employer.

Motazedi did not consent to the use of the Order or the findings or conclusions in the Order by any other party in any other proceeding.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

Many public companies include a description of Section 162(m) of the Internal Revenue Code in their proxy statements without distinguishing the application of 162(m) between various categories of issuers such as accelerated filers and smaller reporting companies.

Section 162(m)(1) of the Code provides that for any publicly held corporation no deduction shall be allowed for applicable employee remuneration with respect to any “covered employee” to the extent that the amount of such remuneration for the taxable year exceeds $1 million.  When describing and applying Section 162(m), many public companies have relied on IRS Notice  2007-49.  That Notice provides that the term “covered employee” for purposes of Section 162(m) does not include those individuals for whom disclosure is required under the Exchange Act by reason of the individual being the taxpayer’s principal financial officer, or PFO (most of the world other than the SEC refers to PFOs as Chief Financial Officers or CFOs).

However the IRS has informally revised its guidance in this Chief Counsel Advice dated August 24, 2015 and released October 23, 2015.  In the CCA the IRS notes that SEC reporting is different for smaller reporting companies as they are permitted to rely on Item 402(m) of Regulation S-K.  The SEC disclosure rules for smaller reporting companies do not require disclosure of compensation of an officer by reason of the individual serving as PFO. Instead, the disclosure rules require disclosure of compensation for the PFO of a smaller reporting company only if the PFO is one of the two most highly compensated executive officers other than the PEO [Principal Executive Officer or more commonly referred to as Chief Executive Officer] who were serving as executive officers at the end of the year.  Therefore the IRS concludes that the PFO of a smaller reporting company is a covered employee if the PFO is one of the two most highly compensated executive officers other than the PEO who were serving as executive officers at the end of the year.

It’s possible that the new informal IRS guidance could be construed to include emerging growth companies as well since those issuers are also permitted to rely on Item 402(m).

Issuers that are not smaller reporting companies or emerging growth companies may want to make clear that the description of Section 162(m) included in their proxy statement does not include the application of Section 162(m) for those issuers entitled to rely in Item 402(m).  Obviously, smaller reporting companies and possibly emerging growth companies will want to consider tailoring their description of Rule 162(m) to the CCA as well as considering the substantive implications of the CCA.

Hat tip to Broc Romanek for pointing out the new IRS guidance on The Advisor’s Blog.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

On December 3, 2015, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against subprime credit reporting company Clarity Services, Inc. (Clarity), and its owner, Timothy Ranney (Ranney), for allegedly violating the Fair Credit Reporting Act (FCRA).

Clarity, a Florida-based credit reporting company with operations throughout the United States,  purchases consumer credit reports from other consumer credit reporting companies, adds additional information to them, and sells them to financial services providers.

The FCRA permits access to consumer credit reports only for a “permissible purpose,” such as a lender making an underwriting decision.  The CFPB’s alleges that Clarity and Ranney violated the FCRA by

  • obtaining approximately 190,000 consumer credit reports from consumer credit reporting agencies—without a permissible purpose—for use in marketing for clients, which resulted in consumer credit files wrongly reflecting a permissible inquiry by a lender; and
  • failing to properly investigate consumer disputes and impermissibly pre-conditioning investigations on receipt of documents from consumers.

Clarity, Ranney, and the CFPB entered into a Stipulation and Consent to the Issuance of a Consent Order, whereby Clarity and Ranney consented to the CFPB entering an administrative Consent Order against them in order to resolve the alleged FCRA violations.  Although Clarity and Ranney consented to the order, they neither admitted nor denied the allegations contained therein.  The Consent Order requires Clarity and Ranney to

  • stop illegal credit reporting practices, including pulling consumer reports and selling them to third-parties who lack a permissible purpose;
  • improve policies and procedures, including employee training, to ensure users of consumer credit reports have a permissible purpose;
  • improve policies and procedures, including employee training, to ensure full investigations are conducted when they are notified of consumer disputes, including disputes regarding unauthorized access to credit reports; and
  • pay an $8 million civil penalty.

You can view the CFPB Consent Order here: http://files.consumerfinance.gov/f/201512_cfpb_consent-order_clarity-services-inc-timothy-ranney.pdf.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at zane.gilmer@stinson.com or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

The Fixing America’s Surface Transportation Act, or FAST Act, is really a transportation bill but has provisions meant to simplify securities laws and capital raising measures.  President Obama signed the FAST Act on December 4, 2015.  Our summary is below.

Section 71001:  Road shows may now begin 15 days after a confidential submission of an IPO registration statement has been made public, instead of 21 days.

Section 71002: An issuer that was an emerging growth company at the time it submitted a confidential registration statement or publicly filed an initial registration but ceases to be an emerging growth company continues to be treated as an emerging market growth company through the earlier of the date on which the issuer consummates its IPO pursuant to the registration statement or the end of the 1-year period beginning on the date the company ceases to be an emerging growth company.

Section 71003: For emerging growth companies:

  • The SEC is directed to revise Forms S-1 and F-1 not later than 30 days after the enactment of the FAST Act so that prior to an IPO the issuer may omit financial information at the time of filing if the information will not be required at the time of the offering and prior to the distribution of a preliminary prospectus all financial information is included.
  • Issuers filing Forms S-1 and F-1 30 days after the enactment of the Fast Act may omit information referred to in the preceding bullet point subject to including required information in the preliminary prospectus.

Section 72001:  Not later than the end of the 180-day period beginning on the date of the enactment of the FAST Act, the SEC must issue regulations to permit issuers to submit a summary page on Form 10–K if each item on the summary page includes a cross-reference to the material contained in the Form 10–K.

Section 72002:   Not later than the end of the 180-day period beginning on the date of the enactment of the FAST Act, the SEC must take all such actions to revise Regulation S–K:

  • to further scale or eliminate requirements of Regulation S–K, in order to reduce the burden on emerging growth companies, accelerated filers, smaller reporting companies, and other smaller issuers, while still providing all material information to investors;
  • to eliminate provisions of Regulation S–K, required for all issuers, that are duplicative, overlapping, outdated, or unnecessary; and
  • for which the Commission determines that no further study under Section 72203 of the FAST Act is necessary to determine the efficacy of such revisions to Regulation S–K.

Section 72003:  Provides that:

  • Study: The SEC must carry out a study of the requirements contained in Regulation S–K which:
    • determines how best to modernize and simplify such requirements in a manner that reduces the costs and burdens on issuers while still providing all material information;
    • emphasizes a company by company approach that allows relevant and material information to be disseminated to investors without boilerplate language or static requirements while preserving completeness and comparability of information across registrants; and
    • evaluates methods of information delivery and presentation and explores methods for discouraging repetition and the disclosure of immaterial information.
  • Report: Not later than the end of the 360-day period beginning on the date of enactment of the FAST Act, the SEC must issue a report to Congress containing:
    • all findings and determinations made in carrying out the study referred to above;
    • specific and detailed recommendations on modernizing and simplifying the requirements in Regulation S–K in a manner that reduces the costs and burdens on companies while still providing all material information; and
    • specific and detailed recommendations on ways to improve the readability and navigability of disclosure documents and to discourage repetition and the disclosure of immaterial information.
  • Rulemaking: Not later than the end of the 360-day period beginning on the date that the report referred to above is issued to the Congress, the SEC must issue a proposed rule to implement the recommendations of the report referred to above.

Section 76001:  This Section provides an exemption for the resale of restricted securities by codifying the so called 4(1-1/2) exemption.  Among other things, the purchaser of the security must be an accredited investor and general solicitation may be not be used.  Where the issuer of the security is not a public company, the seller and purchaser must obtain from the issuer certain information, including the issuer’s most recent balance sheet and profit and loss statement for the preceding two fiscal years and in some cases interim periods.  The financial information must be prepared in accordance with generally accepted accounting principles and must be reasonably current.  Use of the exemption is also subject to certain bad actor disqualifications.  This Section also provides that securities sold under this Section are “covered securities” under Section 18(b)(4) of the Securities Act and are therefore exempt from state “blue sky” Regulation.

Section 84001:  Not later than 45 days after the date of the enactment of the FAST Act, the SEC must revise Form S–1 to permit a smaller reporting company to incorporate by reference in an S-1 registration statement documents that such company files with the SEC after the effective date of such registration.  As such, Form S-1’s used for resale shelf registrations will no longer need to be periodically updated by supplements and post-effective amendments.

We have included relevant portions of the FAST Act here (we eliminated a few hundred pages related to railroads, highways, public transportation, recreational boating safety and the like).

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

Part of the required audit committee report, set forth in Item 407(d)(3)(i)(B), has a tortured history.  As currently written, it requires the audit committee to state whether “The audit committee has discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.”

However AS No. 61 as adopted by PCAOB Rule 3200T was subsequently replaced by  PCAOB Auditing Standard No. 16.  AS No. 16 is titled “Communications with Audit Committees.”  Although the rule changed, the SEC never updated Item 407.  Practice became to refer to AS No. 16 in the audit committee report in the proxy statement.

Now the PCAOB has reorganized its auditing standards and the reorganization was approved by the SEC.  AS No. 16 is now codified as AS No. 1301.  Item 407 has again not yet been updated.

The reorganization is not effective until December 31, 2016.  So technically you wouldn’t have to update your audit committee report this year.  However, the PCAOB says “These reorganized standards can be used and referenced by auditors before the effective date.”  So it would be permissible to update your audit committee report this year, and have one less thing to worry about next year.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

Broc Romanek of TheCorporateCounel.net noted in this blog that “Recently, Nasdaq solicited comment on its shareholder approval rules. It’s a broad – and general – request since the rules haven’t changed much in the 25 years since they were adopted. Nothing specific is proposed – so this is sort of like a concept release.”

Some of the general requests for comments include:

  • Nasdaq Rule 5635(a) generally requires a listed company to obtain shareholder approval in connection with an acquisition if the potential issuance is equal to 20% of the number of shares of common stock or voting power outstanding, or, if insiders have an interest in the target entity, 5% of the number of shares of common stock or voting power outstanding.
  • It has been suggested that the 20% threshold is restrictive. Should Nasdaq consider changing the rule to allow companies to issue a higher percentage of total shares outstanding or voting power without shareholder approval in connection with an acquisition? Why or why not?
  • It has been suggested that given enhanced investor protection mechanisms and disclosure requirements surrounding related party transactions, the heightened shareholder approval rules governing insider interest in an acquisition are no longer necessary. Should Nasdaq consider changing the rule to allow companies to issue more than 5% of voting power or total shares outstanding without shareholder approval where insiders have an interest in the assets to be acquired? Why or why not?
  • Nasdaq Rule 5635(b) requires shareholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control. Is Nasdaq’s presumption that a change of control would occur when, as a result of the issuance, an investor or a group of investors would own, or have the right to acquire, 20% or more of the outstanding shares of common stock or of the voting power and such ownership or voting power would be the largest position an appropriate threshold for purposes of the shareholder approval rules? If not, please indicate the level of ownership or voting power that you believe would represent a change of control for purposes of determining if shareholder approval should be required and list any other factors that you believe should be considered.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

Annually we hold a Directors’ Institute and Proxy Season Workshop in Kansas City.  You can find the materials from our current seminar held on November 12, 2015 here.  Some of the topics covered include:

  • Audit Committee Update
    • COSO 2013 implementation
    • SEC comment letters
    • Accounting and auditing enforcement
    • SEC concept release
    • IFRS
    • Revenue recognition
    • Whistleblowers
  • Yates Memo and DOJ Targeting Officers and Directors
    • Background
    • Compliance and governance implications
    • Indemnification and insurance problems and solutions
  • Compensation Committee Update
    • Pay for performance and goal setting
    • Proposed pay for performance disclosure rules
    • Talent management
    • Pay ratio disclosure rules
    • Compensation clawback rules
    • Hedging disclosure rules
    • Compensation disclosure challenges
  • Nominating and Corporate Governance Committee Update
    • Political and lobbyist activity
    • Political contributions
    • Director evaluations
    • 2015 amendments to the DGCL
    • Proxy Access

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

The Federal Reserve Board approved a final rule specifying its procedures for emergency lending under Section 13(3) of the Federal Reserve Act.  Since the passage of the Dodd-Frank Act in 2010, the Board’s authority to engage in emergency lending has been limited to programs and facilities with “broad-based eligibility” that have been established with the approval of the Secretary of the Treasury.  The Dodd-Frank Act also prohibits lending to entities that are insolvent and imposes certain other limitations.  The rule provides greater clarity regarding the Board’s implementation of these and other statutory requirements.

The final rule incorporates a number of changes from the original proposal made in response to comments received on the proposal.  For example, the final rule defines “broad-based” to mean a program or facility that is not designed for the purpose of aiding any number of failing firms and in which at least five entities would be eligible to participate.  These additional limitations are consistent with and provide further support to the revisions made by the Dodd-Frank Act that a program should not be for the purpose of aiding specific companies to avoid bankruptcy or resolution.

The Dodd-Frank Act requires the Board to establish procedures that prohibit emergency lending to insolvent borrowers.  For this purpose, the final rule also broadens the definition of insolvency to cover borrowers who fail to pay undisputed debts as they become due during the 90 days prior to borrowing or who are determined by the Board or lending Reserve Bank to be insolvent.

Like the proposal, the final rule incorporates the requirement in the Dodd-Frank Act that all lending programs under 13(3) also be approved by the Secretary of the Treasury.  The Board must still find that “unusual and exigent circumstances” exist as a pre-condition to authorizing emergency credit programs.

The Board’s practice in extending emergency credit has been to set the relevant interest rate at a penalty rate designed to encourage borrowers to repay emergency credit as quickly as possible.  The final rule has been changed from the original proposal to incorporate this practice by requiring the interest rate for credit extended under section 13(3) be set at a level that is a premium to the market rate in normal circumstances, affords liquidity in unusual and exigent circumstances, and encourages repayment and discourages use of the program as circumstances normalize.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.