Long Awaited HVCRE Rule Clarifies Capital Treatment of Certain Real Estate Loans

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On November 19, 2019, the federal banking agencies[1] issued a final rule (the “Final Rule”) that incorporates a new definition of an “HVCRE exposure” into the U.S. regulatory capital rules.[2] The new definition is substantially that of an “HVCRE ADC loan” from Section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted into law on May 24, 2018 (“Reform Act”).[3]

The Final Rule is scheduled to go into effect on April 1, 2020. Under the Final Rule, as under the Reform Act, loans originated prior to January 1, 2015 are excluded from characterization as an HVCRE exposure. For loans originated after January 1, 2015 and before April 1, 2020, banking organizations have the option of maintaining their current capital treatment or reevaluating the loans under the revised HVCRE exposure definition.[4]

The Final Rule deviates from prior proposals in several key ways that are favorable to bank lenders, including the treatment of loans to acquire or develop residential condominiums and cooperatives and the use of borrowed funds under certain circumstances to meet the 15 percent contributed capital requirement for one of the available exemptions. These developments will be discussed below.

In addition, the preamble to the Final Rule (the “Preamble”) provides some clarity around certain interpretative issues of concern. Of significant practical importance is the linkage of certain terms to specific definitions and report items in the FFIEC Call Report instructions. Lastly, the Final Rule relies in certain critical respects on a banking institution’s underwriting criteria to determine whether a financing may be an HVCRE exposure.

The text of the HVCRE exposure definition in the Final Rule is attached in the Annex hereto for convenience of reference.

Background

The Final Rule represents the culmination of a long process of deliberation by the federal banking agencies and intervention by Congress.

As of January 1, 2015, the U.S. version of the Basel III risk-based capital rules required banks to assign a risk weight of 150 percent (rather than 100 percent, as is the case for most commercial loans) to acquisition, development, and construction (ADC) loans characterized as high-volatility commercial real estate (HVCRE) exposures. If an ADC loan is subject to the higher risk weight, the bank lender, in essence, is required to carry additional capital against the loan to maintain its risk-based ratios. Accordingly, it has been (and continues to be) critical for banks to identify with clarity whether an ADC loan is an HVCRE exposure. However, the HVCRE exposure definition under the existing rule left open a number of difficult interpretive issues. Some of these have been addressed over time by FAQs issued by the federal banking agencies, but not all to the satisfaction of bank lenders. In addition, there remained significant industry criticism over the characterization criteria for HVCRE exposures and the terms of available exemptions.

It came to Congress to address certain of these issues. With its enactment on May 24, 2018, the Reform Act narrowed and clarified the types of ADC loans subject to the 150 percent risk weight.[5] Under the Reform Act, to be subject to the 150 percent risk weight, HVCRE exposures must fall within a narrower class of ADC loans, defined as “HVCRE ADC loans.” Unless an HVCRE exposure meets the HVCRE ADC loan definition, it is subject to a 100 percent risk weight (unless it would carry another risk weight by reason of other circumstances, such as being in default).

On September 18, 2018, the federal banking agencies jointly issued a notice of proposed rulemaking to revise the definition of an “HVCRE exposure” to conform to the definition of an “HVCRE ADC loan” in the Reform Act (the “Initial NPR”).[6] The preamble accompanying the Initial NPR also requested comment on a number of interpretive issues. Then, on July 12, 2019, the federal banking agencies released a second related notice of proposed rulemaking proposing that certain loans that finance land improvements but do not finance the construction of residential homes on the land should be treated as HVCRE exposures (the “Land Development NPR”).[7] The Final Rule addresses both the Initial NPR and the Land Development NPR.

While the text of the Reform Act’s amendments applies only to depository institutions, the Final Rule, like the Initial NPR, also applies the revised HVCRE exposure definition to bank holding companies, savings and loan holding companies, and intermediate holding companies of foreign banking organizations.

Core Definition of an HVCRE exposure

Prior to the Final Rule, an HVCRE exposure was defined by regulation as a “credit facility that, prior to conversion to permanent financing, finances or has financed the acquisition, development, or construction (ADC) of real property” unless one of the enumerated exemptions applies.[8] Consistent with the Reform Act, the Final Rule amends this definition to include, subject to exemptions, a credit facility secured by land or improved property that, prior to being reclassified as a non-HVCRE exposure:

  • Primarily finances, has financed, or refinanced the acquisition, development, or construction of real property;
  • Has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and
  • Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facilities.

The revised definition clarifies certain interpretive uncertainties that arose under the prior definition.

Secured by real estate

Under the new definition, a credit must be secured by real estate in order to be an HVCRE exposure. This removes the uncertainty as to whether an unsecured ADC loan is subject to the higher capital requirements. The term “credit facility secured by land or improved real property” should be interpreted in a manner consistent with the current definition of a “loan secured by real estate” in the Glossary of the Call Report and FR Y-9C instructions.[9] This means, among other things, that the real estate collateral securing the loan must be greater than 50 percent of the principal amount of the loan.

Primarily finances the ADC of real property

To be an HVCRE exposure under the Final Rule, the credit must “primarily” finance the ADC of real property. In this respect (and contrary to the original regulation[10]), the Final Rule takes an all-or-nothing approach. If a majority of the loan proceeds are used for purposes that would qualify the credit as an HVCRE exposure, the entire credit would be an HVCRE exposure. If not, the entire credit would not be an HVCRE exposure.

Repayment must depend on future income or sales proceeds from, or refinancing of, the real property. Permanent financing is exempt from characterization as an HVCRE exposure.

To be an HVCRE exposure under the Final Rule, the credit must depend upon future income or future sales proceeds (or refinancing) for repayment. In effect, this requirement should exempt ADC financing if the cash flow generated by the real property is sufficient to support the debt service and expenses of the real property in accordance with the banking organization’s applicable loan underwriting criteria for permanent financings.

The corollary to this principle is contained in the exemption from the HVCRE exposure definition for permanent financing. As in the Reform Act, the Final Rule creates two specific exemptions for permanent financing. The exemptions would apply to financing for either: (i) the acquisition or refinance of existing income-producing property secured by a mortgage on the property; or (ii) improvements to existing income-producing improved real property secured by a mortgage on the property. In both cases, the exemption applies only if the cash flow generated by the real property is sufficient to support the debt service and expenses of the real property in accordance with the banking organization’s applicable loan underwriting criteria for permanent financings

Under the principles discussed above, ADC loans for owner-occupied property should not generally be characterized as HVCRE exposures under the Final Rule because they are generally not dependent on future income or future sales proceeds from, or refinancing of, the financed real property. Instead, such loans are generally underwritten based on the ongoing operations and activities conducted by the property’s owner. The Preamble refers to a Call Report item to help further clarify this category of loans. Loans reported as “Loans secured by nonfarm residential properties” in item 1.e of Schedules RC-C, Part I and HC-C of the Call Report and FR Y-9C, are generally not HVCRE exposures “because such loans are not dependent upon future income or sales proceeds from, or refinancing of, the real property being financed for repayment.”[11]

The Call Report Instructions for this reporting item are as follows:[12]

“Loans secured by owner-occupied nonfarm nonresidential properties” are those nonfarm nonresidential property loans for which the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or an affiliate of the party, who owns the property. Thus, for loans secured by owner-occupied nonfarm nonresidential properties, the primary source of repayment is not derived from third party, nonaffiliated, rental income associated with the property (i.e., any such rental income is less than 50 percent of the source of repayment) or the proceeds of the sale, refinancing, or permanent financing of the property. Include loans secured by hospitals, golf courses, recreational facilities, and car washes unless the property is owned by an investor who leases the property to the operator who, in turn, is not related to or affiliated with the investor (in which case, the loan should be reported in Schedule RC-C, part I, item 1.e.(2), below). Also include loans secured by churches unless the property is owned by an investor who leases the property to the congregation (in which case, the loan should be reported in Schedule RC-C, part I, item 1.e.(2), below).”

Land loans not necessarily covered

Not all land loans will be HVCRE exposures and will avoid classification if they do not meet the three prongs of the definition described above. For example, loans secured by vacant land may not be classified as an HVCRE exposure if repayment is not dependent on future income produced from the property or on the future sale of the property and the loan was made in accordance with the banking organization’s loan underwriting standards for permanent financings.[13]

Exemptions

Under the Final Rule, an ADC loan may qualify for one of a number of exemptions, as described below.

One- to Four-Family Residential ADC Loans

The revised HVCRE exposure definition retains the exemption for credit facilities that finance the ADC of one- to four-family residential properties. Under the existing regulation and in the preamble to the Initial NPR, a credit exposure would fall within this exemption if it met the definition of a one- to four-family residential property in the interagency real estate lending standards (“Lending Standards”).[14] That definition includes “property containing fewer than five individual dwelling units, including manufactured homes permanently affixed to the underlying property (when deemed to be real property under state law).” Notably, the Lending Standards consider condominium and cooperatives to be multi-family construction (not one- to four-family residential property). Accordingly, under the Initial NPR, credit facilities financing the construction of residential condominiums or cooperatives with five or more units would not qualify for the one- to four-family exemption.

In response to critical comments on this issue, the Final Rule aligns the one- to four-family exemption with the definition of one- to four-family residential property loans set forth in the Call Report and FR Y-9C, rather than the definition in the Lending Standards. As a result, construction loans for single-family dwelling units, duplex units, and town houses will qualify for the exemption. Condominium and cooperative construction loans (even if involving five or more units) will qualify if repayment of the loan comes from the sale of individual units.[15]

A loan that finances the construction of one- to four-family residential structures and also finances land development activities and/or land acquisition in connection with the residential project would qualify for the exemption. This is consistent with the reporting requirements on the Call Report and FR Y-9C.[16] However, the exemption will not be available for credit facilities used solely to finance land development activities, like the laying of sewers, water pipes, and similar improvements to land. In addition, loans used solely to acquire undeveloped land will not qualify for the exemption regardless of how the land is zoned.[17]

Community Development Exemption

The Final Rule carries forward from the existing regulation and the Reform Act credit facilities financing the ADC real property projects the primary purpose of which are “community development,” as such term is defined in the federal banking agencies’ Community Reinvestment Act regulations.[18]

Agricultural Land Exemption

The revised HVCRE exposure definition retains the exemption for “agricultural land.” As explained in the Preamble, “agricultural land” has the same meaning as the term “farmland” in the instructions to the Call Report and FR Y-9C.[19]The existing regulation had no specific definition for the term “agricultural land”.

The LTV/Capital Contribution Exemption

The Final Rule’s HVCRE exposure definition (as with the HVCRE ADC loan definition in the Reform Act) exempts ADC loans that finance commercial real estate projects that (i) meet applicable maximum LTV ratios; (ii) for which the borrower has contributed capital of at least 15 percent of the real estate’s appraised “as-completed” value to the project; (iii) for which the borrower contributed the minimum amount of capital prior to the advancement of funds (other than a nominal amount to secure a lien); and (iv) the 15 percent minimum capital contributed to the project is contractually required to remain in the project until the HVCRE exposure has been reclassified as a non-HVCRE exposure. To meet the contributed capital requirement, borrowers may contribute cash, unencumbered readily marketable assets, development expenses paid out-of-pocket, or contributed real property or improvements.

The Final Rule and the Preamble clarify certain policy and interpretive issues, as follows:

  • What counts as contributed capital?
    • Contributed real property or improvements. Contributed real property or improvements must be directly related to the project being financed.[20] In addition, consistent with the Reform Act, the value of any contributed real property is based on the appraised value of the real property, rather than the original cost of the property (as required under the existing rules).
    • Borrowed funds. Borrowed funds that the borrower obtains from another lender may count toward the capital contribution as long as borrowed funds are not derived from, related to, or encumber the project or any collateral that has been contributed to the project.[21]
    • Unencumbered readily marketable assets. “Unencumbered readily marketable assets” will be interpreted in a manner consistent with the Lending Standards. This means that readily marketable assets would include insured deposits, financial instruments, and bullion. Financial instruments and bullion must be promptly salable under ordinary circumstances at fair market value. Such assets must be given a haircut (discounted) by the lender consistent with its usual practice regarding making loans secured by such assets.[22]
  • Appraisal of “as-completed” value. The 15 percent capital contribution requirement is measured against the appraised, “as-completed” value of the real estate. However, there are two instances in which a different valuation method for purposes of this calculation will be accepted. First, where an “as-completed” value appraisal is not available, such as with respect to raw land without plans for near-term development, an “as-is” appraisal value may be used. Second, an evaluation, rather than an appraisal, will be permitted to determine the “as-completed” value of real estate where the appraisal regulations permit the use of evaluations in lieu of appraisals.[23]
    • Multi-phase projects. To determine whether the contributed capital meets the 15 percent minimum, the calculation of the “as-completed” value of real property should be conducted with respect to a “project.” As certain “projects” may be financed in multiple phases, an individual phase of a project may be viewed as a single project for purposes of calculating the 15 percent contributed capital requirement if the individual phase has its own appraised “as-completed” value or an appropriate evaluation.[24]
  • Distribution of Excess Capital. As under the Reform Act, the amount of contributed capital required to remain in the project is only the 15 percent minimum requirement. As a result, there is no restriction on distributing capital contributed in excess of the 15 percent requirement. This is not permitted under the existing rules.

Reclassification as a Non-HVCRE Exposure

Under the Final Rule (as under the Reform Act), an HVCRE exposure is eligible for reclassification as a non-HVCRE exposure upon: (i) the substantial completion of development or construction of the real property being financed by the credit facility; and (ii) the generation of cash flow by the real property sufficient to support debt service and expenses of the real property in accordance with the banking organization’s applicable underwriting criteria for permanent financings. Banking organizations may rely on their loan underwriting standards for permanent financings for purposes of reclassifying HVCRE exposures.[25]

Rescission of Prior Guidance

All HVCRE exposure-related FAQs will be rescinded as of the effective date of the Final Rule. In addition, at that time, the HVCRE exposure section of the Interagency Guidance on CRE Concentration Risk Management will no longer apply.[26]

Annex

Final Rule: HVCRE Exposure Definition [OCC version]

High volatility commercial real estate (HVCRE) exposure means:

(1) A credit facility secured by land or improved real property that, prior to being reclassified by the depository institution as a non-HVCRE exposure pursuant to paragraph (6) of this definition—

(i) Primarily finances, has financed, or refinances the acquisition, development, or construction of real property;

(ii) Has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and

(iii) Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facility;

(2) Does not include a credit facility financing—

(i) The acquisition, development, or construction of properties that are—

(A) One- to four-family residential properties. Credit facilities that do not finance the construction of one- to four-family residential structures, but instead solely finance improvements such as the laying of sewers, water pipes, and similar improvements to land, do not qualify for the one- to four-family residential properties exclusion;

(B) Real property that would qualify as an investment in community development; or

(C) Agricultural land;

(ii) The acquisition or refinance of existing income-producing real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the national bank’s or Federal savings association’s applicable loan underwriting criteria for permanent financings;

(iii) Improvements to existing income-producing improved real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the national bank’s or Federal savings association’s applicable loan underwriting criteria for permanent financings; or

(iv) Commercial real property projects in which—

(A) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio as determined by the OCC;

(B) The borrower has contributed capital of at least 15 percent of the real property’s appraised, ‘as completed’ value to the project in the form of—

(1) Cash;

(2) Unencumbered readily marketable assets;

(3) Paid development expenses out-of-pocket; or

(4) Contributed real property or improvements; and

(C) The borrower contributed the minimum amount of capital described under paragraph (2)(iv)(B) of this definition before the national bank or Federal savings association advances funds (other than the advance of a nominal sum made in order to secure the national bank’s or Federal savings association’s lien against the real property) under the credit facility, and such minimum amount of capital contributed by the borrower is contractually required to remain in the project until the HVCRE exposure has been reclassified by the national bank or Federal savings association as a non-HVCRE exposure under paragraph (6) of this definition;

(3) Does not include any loan made prior to January 1, 2015; and

(4) Does not include a credit facility reclassified as a non-HVCRE exposure under paragraph (6) of this definition.

(5) Value of Contributed Real Property.—For the purposes of this HVCRE exposure definition, the value of any real property contributed by a borrower as a capital contribution shall be the appraised value of the property as determined under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. §3339), in connection with the extension of the credit facility or loan to such borrower.

(6) Reclassification as a Non-HVCRE exposure.—For purposes of this HVCRE exposure definition and with respect to a credit facility and a national bank or Federal savings association, a national bank or Federal savings association may reclassify an HVCRE exposure as a non HVCRE exposure upon—

(i) The substantial completion of the development or construction of the real property being financed by the credit facility; and

(ii) Cash flow being generated by the real property being sufficient to support the debt service and expenses of the real property, in accordance with the national bank’s or Federal savings association’s applicable loan underwriting criteria for permanent financings.

(7) For purposes of this definition, a [BANK] is not required to reclassify a credit facility that was originated on or after January 1, 2015 and prior to April 1, 2020.


[1] The term “federal banking agencies” refers, collectively, to the Board of Governors of the Federal Reserve System (“Federal Reserve”); the Office of the Comptroller of the Currency (OCC); and the Federal Deposit Insurance Corporation (FDIC).

[2] For a copy of the Final Rule, please see: https://www.fdic.gov/news/board/2019/2019-11-19-notice-sum-c-fr.pdf.

[3] Public Law No. 115-174, Section 214, available at: https://www.congress.gov/115/bills/s2155/BILLS-115s2155enr.pdf. For a summary of the provisions included within the Reform Act, please see our Client Alert, available at: https://www.mofo.com/resources/insights/180315-regulatory-reform-bill.html.

[4] See preamble to the Final Rule (“Preamble”) at 8. Citations to the Preamble are to the copy of the Final Rule released by the federal banking agencies but not published in the Federal Register. The Final Rule has yet to be published in the Federal Register as of the date of this Client Alert.

[5] For a discussion of the provisions of the Reform Act related to HVCRE exposures, please see our Client Alert, available at: https://www.mofo.com/resources/insights/180523-hvcre-clarification.html.

[6] For a copy of the Initial NPR, please see: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20180918a.htm. For a summary of the Initial NPR, please see our Client Alert, available at: https://www.mofo.com/resources/insights/180924-agencies-conform-hvcre-exposure.html.

[7] For a copy of the Land Development NPR, please see: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20190712a.htm. For a summary of the Land Development NPR, please see our Client Alert, available at: https://www.mofo.com/resources/insights/190715-federal-banking-agencies-new-hvcre.html.

[8] See 12 C.F.R. § 324.2 (FDIC); 12 C.F.R. § 217.2 (Board); 12 C.F.R. § 3.2 (OCC).

[9] Preamble at 12; see also Instructions for Preparation of Consolidated Reports of Condition and Income (FFIEC 031 and 041) (Sept 2019), available at: https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_201909_i.pdf [hereinafter, “Call Report Instructions”] at A-58 (defining the term “Loan Secured by Real Estate” as the following: “For purposes of these reports, a loan secured by real estate is a loan that, at origination, is secured wholly or substantially by a lien or liens on real property for which the lien or liens are central to the extension of the credit – that is, the borrower would not have been extended credit in the same amount or on terms as favorable without the lien or liens on real property. To be considered wholly or substantially secured by a lien or liens on real property, the estimated value of the real estate collateral at origination (after deducting any more senior liens held by others) must be greater than 50 percent of the principal amount of the loan at origination.”).

[10] Interagency FAQs on the Regulatory Capital Rule, (March 31, 2015), available at: https://www.fdic.gov/regulations/capital/capital/faq-hvcre.html [hereinafter, “FAQ”] at No. 13. FAQ No. 13 explains that the banking organization should consider the contribution of the commercial real estate portion of the project to the total “as completed” value of the project when determining the portion of the loan applicable to the property’s commercial real estate.

[11] Preamble at 13.

[12] See Call Report Instructions, Report Item 1.e.(1) of Schedule RC-C, Part I at RC‑C‑6b.

[13] Preamble at 14.

[14] See Interagency Guidelines for Real Estate Lending Policies. 12 C.F.R. Part 208, Subpart J, Appendix C (Federal Reserve); 12 C.F.R. Part 34, Subpart D, Appendix A (OCC); 12 C.F.R. Part 365, Subpart A, Appendix A (FDIC).

[15] Preamble at 17; see also Call Report Instructions, Report Item 1.a.(1) of Schedule RC-C, Part I at RC‑C‑5 (defining one- to four-family construction loans as follows: “‘1-4 family residential construction loans’ include:

  • Construction loans to developers secured by tracts of land on which 1-4 family residential properties, including townhouses, are being constructed.
  • Construction loans secured by individual parcels of land on which single 1-4 family residential properties are being constructed.
  • Construction loans secured by single-family dwelling units in detached or semidetached structures, including manufactured housing.
  • Construction loans secured by duplex units and townhouses, excluding garden apartment projects where the total number of units that will secure the permanent mortgage is greater than four.
  • Combination land and construction loans on 1-4 family residential properties, regardless of the current stage of construction or development.
  • Combination construction-permanent loans on 1-4 family residential properties until construction is completed or principal amortization payments begin, whichever comes first.
  • Loans secured by apartment buildings undergoing conversion to condominiums, regardless of the extent of planned construction or renovation, where repayment will come from sales of individual condominium dwelling units, which are 1-4 family residential properties.
  • Bridge loans to developers on 1-4 family residential properties where the buyer will not assume the same loan, even if construction is completed or principal amortization payments have begun.”

[16] Id.

[17] Preamble at 20. The Final Rule adds to the language of the Reform Act a specific exception to the one- to four-family exemption for such land development loans. Loans originated simultaneously, for example, a land acquisition loan and a one- to four-family construction loan, must be evaluated separately to determine whether each loan on its own qualifies for the exemption. Preamble at 22-23.

[18] Preamble at 24-25; see also 12 C.F.R. Part 24 (OCC); Part 345 (FDIC); Part 228 (Federal Reserve).

[19] Preamble at 26; see also Call Report Instructions, Report Item 1.b of Schedule RC-C, Part I at RC-C-5 (“Farmland includes all land known to be used or usable for agricultural purposes, such as crop and livestock production. Farmland includes grazing or pasture land, whether tillable or not and whether wooded or not.”).

[20] Preamble at 29.

[21] Id.

[22] Preamble at 29-30.

[23] Preamble at 30-31.

[24] Preamble at 31.

[25] Preamble at 31-32.

[26] See SR 07-1: Interagency Guidance on Concentrations in Commercial Real Estate (Jan. 4, 2007), available at: https://www.federalreserve.gov/boarddocs/srletters/2007/SR0701.htm.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.