Real Estate Law Blog

Will Freddie and Fannie Survive?

Consider this discussion of the uncertain future of Freddie and Fannie.

TCEQ Increases Scrutiny of Barnett Shale Operations

On December 17, 2009, in response to increasing citizen complaints, the Texas Commission on Environmental Quality ("TCEQ") announced a new enforcement program targeting oil and gas activities in the Barnett Shale. The new program requires that complaints regarding oil and gas activities in the Barnett Shall be given "immediate response" priority and investigated by the agency within 12 hours. TCEQ staff responding to a complaint are instructed to use appropriate equipment during investigations, including infra-red cameras and air sampling using summa canisters. In the event of a violation, companies will be given two days to take corrective actions to resolve the situation. If TCEQ documents any unsafe or hazardous conditions, the agency will require immediate responsive action.

The TCEQ memorandum describing the enforcement program can be viewed by clicking here. For more information, feel free to contact T&K attorneys Jim Morriss or Christopher Smith.

This information is relevant to companies who have active shale gas operations in Texas and may be of interest to companies owning real estate within the Barnett Shale. 

Did the Fed Misunderstand?

Interesting Washington Post piece about the Fed's approach to regulation in the period leading up to the recent banking crisis.

House Passes Financial Rules Overhaul

The U.S. House of Representatives today passed The Wall Street Reform and Consumer Protection Act (H.R. 4173) on a 223-202 vote. According to a press release from the House Committee on Financial Services, the legislation is intended to "address the myriad causes - from predatory lending to unregulated derivatives - that led to last year's meltdown." In close to 1300 pages, the Act:

• creates a new Consumer Financial Protection Agency "solely devoted to protecting Americans from unfair and abusive financial products and services"
• creates a council of regulators tasked with identifying financial institutions whose failure would have devastating effects on the economy, which institutions would be subject to special oversight and regulation
• empowers regulators to ban "inappropriate or imrudently risky" executive compensation practices
• incorporates the anti-predatory lending bill passed by the House earlier in 2009
• requires registration of hedge funds
• regulates derivatives
• strengthens the SEC's regulatory powers

The U.S. Senate is at work on its own legislation addressing the same issues. The full text of H.R. 4173 is available by clicking here.

Extent of CRE Lenders' Losses Still Unknown

One writer at TheStreet.com recently commented on the comparative status of residential loan losses and commercial real estate losses (see post). According to this piece, the worst may be over as far as lender loss in the former, but we won't know the extent of losses in the latter for some time to come, since many of the major lenders have only posted around 50% of their CRE-related losses for this year.

IRS to Launch Sweep of Employers' Payroll Practices

The Internal Revenue Service has announced that it is launching a major audit initiative targeting underpayment of employment taxes by U.S. companies. Over the course of the three-year initiative, the agency will randomly select 6,000 employers for in-depth audits of their employment tax payments and practices. Armed with the data gathered from those audits, the IRS will adopt a new enforcement strategy designed to ferret out those employers most likely to run afoul of the employment tax rules. Thompson & Knight has prepared a Client Alert that identifies the steps employers should take now to prepare themselves for the potential knock of the IRS at their payroll department’s door. The information in this alert is relevant to all U.S. companies that have workers in the United States.

To view the alert, please click here. 

Difference of Opinion

Click here to read an interesting, brief discussion of the difference of opinion between Treasury Secretary Timothy Geithner and Goldman Sachs executives regarding whether GS (and other major institutions) could have survived the crisis of the last year without government intervention. Query how comfortable we all are with a government official evaluating executive bonuses at a private-sector business as "irresponsibly high" -- what does that mean?