On March 27, 2021, President Joseph R. Biden, Jr. signed the COVID-19 Bankruptcy Relief Extension Act of 2021 into law, extending certain bankruptcy provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which were originally set to expire on March 27, 2021. The new legislation extends the affected provisions through March 27, 2022.
The provisions, described in more detail below, provide small business and individual debtors with expanded access to bankruptcy relief. The extended provisions include:
Practice Point: Notably, the increased debt limit for small business Chapter 11 filings has proven popular by expanding access to the relatively new, debtor-friendly provisions created under Subchapter V. This extension of the sunset period for the increased debt limit ensures that more businesses that may have tried to ride out the worst of the COVID-19 disruptions may still be able to take advantage of the debtor-friendly provisions under Subchapter V for another year.
Please contact David S. Musgrave for any questions concerning these topics.
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Last year, we reported on the long-awaited guidance from the Consumer Financial Protection Bureau (CFPB) on how the bureau would address the Dodd-Frank Act’s prohibition on abusive acts and practices. The policy statement set forth the following three principles for enforcement based on the abusiveness standard:
Effective March 19, 2021, the CFPB has rescinded this policy statement. In its rescission statement, the CFPB asserts that the abusiveness policy did not clarify the abusive standard and, instead, afforded too much discretion for the CFPB. Moving forward, the CFPB intends to “exercise the full scope of its supervisory and enforcement authority to identify and remediate abusive acts and practices.”
Practice Point: Given the change in administration and the resignation of former CFPB Director Kathleen L. Kraninger, this policy reversal did not come as a surprise. The Biden Administration has signaled its intention to shift the CFPB’s focus to more robust enforcement activity and this policy rescission aligns with this shift. Companies can expect the CFPB to utilize the abusiveness standard more freely during the next phase of CFPB leadership.
Please contact Bryan M. Mull with any questions concerning this topic.
As we previously reported, Governor Lawrence Hogan, Jr. issued an executive order (December Order) on December 17, 2020, in which he directed the Maryland Department of Labor’s Commissioner of Financial Regulation (Commissioner) to reopen the notice of intent to foreclose online registry (NOI Registry) on February 1, 2021. Governor Hogan had previously ordered the closure of the NOI Registry, which effectively halted the initiation of new residential foreclosures in Maryland. In the December Order, Governor Hogan also granted the Commissioner with the authority to delay the reopening of the NOI Registry through further regulatory guidance. In February 2021, the Commissioner extended the reopening of the NOI Registry to April 1, 2021.
On March 29, 2021, the Commissioner issued amended guidance further extending the reopening of the NOI Registry to May 4, 2021. As we previously reported, several federal authorities had announced extensions of their own foreclosure moratoria through June 30, 2021.
Please contact Bryan M. Mull with any questions concerning the foreclosure restrictions and forbearance issues.
For additional information on the impact of the coronavirus, visit our information hub for a list of up-to-date content.