1045-00007 · Client 1045 · Correspondence/SEC

letter-to-sec-production-protocol.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

425 Lexington Avenue, 30th Floor New York, New York 10017

Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

October 20, 2023

VIA ELECTRONIC MAIL AND HAND DELIVERY

Andrea Felton, Esq. Senior Staff Attorney Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549

Christopher Yuen, Esq. Staff Attorney Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549

Re: In the Matter of Belmont Ridge Bank National Association File No. HO-14287 SEC Subpoena No. HO-14287-001 (Documents), issued October 15, 2023 Formal Order of Investigation No. EN-2023-0947, issued October 12, 2023

Dear Ms. Felton and Mr. Yuen:

I. Introduction and Purpose

Calderwood & Harkness LLP represents Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced investigation by the Division of Enforcement (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission"). This representation encompasses all matters arising from Formal Order of Investigation No. EN-2023-0947, issued October 12, 2023 (the "Formal Order"), and the document subpoena designated Subpoena No. HO-14287-001 (the "Subpoena"), issued to BRB on October 15, 2023. Our firm's engagement and matter reference number for this representation is SC-MAT-2023-4172.

The purpose of this letter is to set forth, for the Staff's review and comment, BRB's proposed search methodology, document custodian list, date range, keyword search terms, production format, and rolling production schedule for its compliance with the Subpoena. In addition, this letter presents BRB's request for confidential treatment of certain proprietary and competitively sensitive materials that are anticipated to be responsive to the Subpoena, as well as BRB's proposed privilege log format and the Bank's position regarding the bank-examination privilege.

The following Calderwood & Harkness attorneys are authorized to communicate with the Staff on behalf of BRB in connection with this investigation and should be included in all correspondence and communications:

• Victoria Chambers, Partner (Responsible Partner and Primary Contact)

• Howard Quinn, Partner (Billing Partner)

• Jasmine Thornton, Associate (Lead Associate)

• Liam Donahue, Associate (Working Associate)

BRB reaffirms the cooperation posture set forth in its initial response letter dated September 29, 2023, in which BRB expressed its commitment to working with the Staff in a transparent, good-faith manner throughout this investigation. BRB intends to produce all non-privileged, responsive documents in its possession, custody, or control on a schedule designed to facilitate the Staff's efficient review.

The proposals contained in this letter reflect and incorporate the productive meet-and-confer discussions between undersigned counsel and the Staff that took place on October 16, 2023 and October 18, 2023. We are grateful for the Staff's constructive engagement during those discussions and believe that the framework set forth below reflects a shared understanding of the scope and logistics of BRB's production. To the extent the Staff has additional comments or requests regarding any aspect of this protocol, BRB welcomes further dialogue.

II. Proposed Document Custodians

Based on the specifications set forth in the Subpoena and BRB's assessment of the individuals most likely to possess documents and communications responsive to the Subpoena's categories of requested materials, BRB proposes the following seven custodians for its initial document collection:

1. Marcus R. Ellingham — Chief Executive Officer, Belmont Ridge Bank National Association. Mr. Ellingham has served as CEO since 2018 and, in that capacity, has oversight of all Bank operations, including the BridgeFin division. He is a signatory to BRB's periodic reports filed with the Commission and participates in the Bank's quarterly earnings calls and investor communications.

2. Patricia "Trish" Navarrete — Chief Financial Officer, Belmont Ridge Bank National Association. Ms. Navarrete is the senior executive responsible for the Bank's financial reporting, including the determination and disclosure of the allowance for credit losses ("ACL"), the adoption and implementation of the current expected credit loss ("CECL") methodology under ASC 326, and the preparation of BRB's Forms 10-K and 10-Q. She is a co-signatory to BRB's periodic reports.

3. Derek Sung — General Counsel and Chief Legal Officer, Belmont Ridge Bank National Association. Mr. Sung oversees BRB's legal department, including regulatory compliance, corporate governance, and the coordination of outside counsel engagements. Mr. Sung has been involved in communications with both Calderwood & Harkness and BRB's regular securities reporting counsel regarding the matters under investigation. Documents collected from Mr. Sung's files are expected to include a significant volume of privileged communications; such documents will be withheld or redacted and logged as described in Sections IV.C and VIII below.

4. Annette Kowalski — Chief Risk Officer, Belmont Ridge Bank National Association. Ms. Kowalski is responsible for BRB's enterprise risk management function, including oversight of credit risk, model risk, and portfolio risk across all lending divisions. She chairs BRB's internal Model Risk Governance Committee and has oversight responsibility for the validation and ongoing monitoring of the BridgeFin underwriting model.

5. Raymond Hu — Chief Accounting Officer, Belmont Ridge Bank National Association. Mr. Hu oversees BRB's accounting operations, including the preparation of ACL calculations, the application of qualitative overlays and Q-factors, the maintenance of CECL model governance documentation, and the coordination with BRB's independent external auditor, Whitfield Keane LLP ("WK"), on audit and review engagements.

6. Naveen Chakravarti — Senior Vice President and Division Head, BridgeFin Division, Belmont Ridge Bank National Association. Mr. Chakravarti leads the BridgeFin division, which is not a separate legal entity but rather an internal operating division of BRB. BridgeFin operates BRB's digital lending platform, which utilizes a proprietary AI-driven underwriting model. Mr. Chakravarti has direct management responsibility for loan origination, credit quality monitoring, vintage cohort performance tracking, and portfolio analytics within BridgeFin. His custodial collection will include materials from BridgeFin-specific shared drives, databases, and internal communication platforms.

7. Gwendolyn Prescott — Audit Committee Chair (Independent Director), Belmont Ridge Bank National Association. Ms. Prescott's custodial collection will be limited to Audit Committee materials, including committee meeting minutes, presentations, and related correspondence, to the extent such materials relate to the ACL, CECL implementation, BridgeFin disclosures, or communications with BRB's independent external auditor. BRB does not propose to collect Ms. Prescott's personal communications or materials unrelated to her service on the Audit Committee.

BRB notes that, with respect to Custodian No. 6, the BridgeFin division operates within BRB's corporate infrastructure and does not maintain a separate legal existence, separate books and records for SEC reporting purposes, or separate governance structures apart from the Bank. Accordingly, all BridgeFin-related documents are BRB documents and will be collected and produced as part of BRB's production.

BRB offers to include additional custodians as the Staff may reasonably request following its review of the initial productions. Any request for additional custodians would be subject to further meet-and-confer discussions to ensure the proportionality and relevance of the expanded collection.

In addition, BRB notes that its regular securities reporting counsel, Caldwell Pratt & Stein LLP ("CPS"), whose lead partner is Martin Caldwell (51 West 52nd Street, 24th Floor, New York, NY 10019), prepared and reviewed the Forms 10-K and 10-Q at issue in this investigation. Documents in CPS's possession that are responsive to the Subpoena will be collected and produced by BRB, with CPS's full cooperation, subject to applicable privileges including attorney-client privilege and attorney work-product protection. BRB will coordinate with CPS to ensure that all non-privileged, responsive materials held by CPS are included in BRB's production and that privileged materials are appropriately logged.

III. Proposed Date Range

BRB proposes to collect and search for responsive documents dated or created within the period of January 1, 2021 through October 15, 2023 (the date the Subpoena was issued). This date range was selected to provide comprehensive coverage of the relevant time period while remaining proportional to the scope of the Staff's inquiry, for the following reasons:

• The proposed start date of January 1, 2021 captures the period beginning one full fiscal year prior to BRB's fiscal year ended December 31, 2022 ("FY 2022"), which is the principal reporting period at issue. This ensures that documents reflecting the analytical inputs, assumptions, and credit-quality data underlying the FY 2022 ACL are fully captured, including year-over-year comparative analyses and trend data.

• The proposed date range encompasses the preparation, review, and filing of the following BRB periodic reports: (a) BRB's FY 2022 Annual Report on Form 10-K, filed with the Commission on February 28, 2023; (b) BRB's Quarterly Report on Form 10-Q for Q1 2023 (quarter ended March 31, 2023), filed on May 10, 2023; and (c) BRB's Quarterly Report on Form 10-Q for Q2 2023 (quarter ended June 30, 2023), filed on August 9, 2023.

• The date range captures BridgeFin portfolio credit-quality data from 2021 onward, which is relevant given that the Staff's inquiry includes BridgeFin loan vintage cohorts originated after Q2 2021. Loan-level performance data, delinquency tracking, charge-off analytics, and re-aging records for these vintage cohorts will be included in the production.

• BRB adopted CECL (ASC 326, Financial Instruments — Credit Losses) effective January 1, 2020. The proposed date range captures the second and third full years of CECL implementation, which is the period during which BRB's CECL model matured and was calibrated with actual post-adoption performance data. Documents reflecting model calibration, validation, qualitative overlay adjustments, and governance processes during this period are expected to be highly relevant.

BRB is prepared to discuss with the Staff any request to narrow or expand the proposed date range. BRB notes that expanding the date range to include the first year of CECL adoption (2020) may be considered if the Staff determines that pre-2021 CECL implementation decisions are material to its inquiry, though BRB believes the proposed range is sufficient for purposes of the current investigation.

IV. Proposed Search Terms and Methodology

A. Electronic Data Collection

BRB will collect electronic documents from the following data sources for each of the proposed custodians:

• Email accounts: Each custodian's Strathmore Data Systems / Outlook email account, including all mailbox folders (Inbox, Sent Items, Deleted Items, Drafts, and any user-created folders), as maintained on BRB's email servers and archival systems.

• Local and network drives: Files stored on each custodian's local hard drive (where applicable) and on BRB's shared network drives to which the custodian has access and to which the custodian has saved or authored responsive materials.

• Aldermere Systems sites: Documents stored on BRB's internal collaboration sites, including the sites maintained by the Finance department, the Risk Management department, the BridgeFin division, the Legal department, and the Audit Committee.

• Enterprise document management system: BRB utilizes an enterprise document management system (Stonefield Systems) for the storage and management of certain financial reporting, legal, and compliance documents. Responsive documents from this system will be collected and included in the production.

With respect to Custodian No. 6, Naveen Chakravarti, the collection will additionally include BridgeFin division-specific shared drives and internal databases, including the BridgeFin Portfolio Analytics Database, the BridgeFin Loan Origination System data repository, and the BridgeFin Credit Quality Dashboard data exports. These sources are expected to contain credit-quality reports, vintage cohort performance data, delinquency and charge-off records, re-aging and loan modification tracking records, and underwriting model documentation.

Hard-copy documents in the possession of relevant custodians will be identified, collected, and scanned at a resolution sufficient to produce legible TIFF images. Scanned hard-copy documents will be processed with optical character recognition ("OCR") technology and incorporated into the electronic production set. BRB's initial assessment is that the volume of hard-copy documents is limited, as BRB's financial reporting, risk management, and lending operations are predominantly conducted electronically.

B. Keyword Search Terms

BRB proposes the following keyword search terms, which were developed in consultation with the Staff during the meet-and-confer discussions held on October 16 and October 18, 2023. These terms are designed to identify documents responsive to the Subpoena's categories of requested materials while minimizing the capture of clearly non-responsive materials:

1. "BridgeFin" OR "Bridge Fin"

2. "allowance for credit loss*" OR "ACL"

3. "CECL" OR "ASC 326" OR "current expected credit loss*"

4. "loan loss provision" OR "provision for credit loss"

5. "charge-off" OR "chargeoff" OR "net charge-off"

6. "delinquenc" OR "past due" OR "90 day" OR "90+ day*"

7. "re-ag" OR "reag" OR "loan modification" OR "modified loan" OR "troubled debt restructur"

8. "vintage" OR "cohort" OR "vintage cohort"

9. "underwriting model" OR "credit model" OR "AI model" OR "scoring model"

10. "10-K" OR "10-Q" OR "annual report" OR "quarterly report" — applied in combination with any of the ACL-related or BridgeFin-related terms listed above (i.e., Boolean connector requiring co-occurrence within the same document)

11. "qualitative overlay" OR "qualitative adjustment" OR "Q-factor"

12. "Whitfield Keane" OR "WK" OR "Lorraine Dupont" — designed to capture audit-related communications with BRB's independent external auditor, Whitfield Keane LLP, and the engagement partner, Lorraine Dupont

13. "OCC" OR "examination" OR "CAMELS" — limited to documents in which these terms appear in the context of ACL-related matters; BRB will apply contextual filtering during the responsiveness review to exclude hits that relate solely to non-ACL OCC examination topics

The asterisk () denotes a wildcard/stemming operator that will capture variations of the root term (e.g., "delinquenc" will capture "delinquency," "delinquencies," "delinquent," etc.).

The search terms will be applied to the collected data sets using industry-standard e-discovery processing software. Standard de-duplication will be performed across custodians to eliminate exact duplicate documents (based on MD5 hash values), with the custodian of the "master" copy identified and all other custodians who possessed the duplicate listed in the metadata. De-NISTing — the removal of system-generated files identified in the National Institute of Standards and Technology's National Software Reference Library — will be performed to exclude operating system files, application executables, and other system-level files that are not substantive documents.

All documents identified through keyword search hits will be reviewed for responsiveness before production. BRB will not produce documents that are clearly non-responsive notwithstanding a keyword hit (e.g., a document that contains the acronym "ACL" in reference to an anterior cruciate ligament, or a passing reference to a "quarterly report" in a context unrelated to BRB's SEC filings). Family groups, including parent emails and their attachments, will be kept intact; where an attachment is responsive, the parent email and all sibling attachments will be produced together.

BRB reserves the right to propose supplemental or revised search terms as the production progresses and as additional information becomes available regarding the scope of the Staff's inquiry. BRB also welcomes the Staff's input on additional search terms at any time.

C. Privilege Review Methodology

All potentially responsive documents identified through the search process described above will be subject to a two-pass privilege review protocol:

First-Pass Review. An initial responsiveness and privilege review will be conducted by trained contract attorneys under the direct supervision of Calderwood & Harkness LLP. These reviewers will be trained on BRB's organizational structure, the nature of the investigation, the applicable privilege categories, and the criteria for responsiveness. First-pass reviewers will code documents for responsiveness, privilege, and confidentiality designations.

Second-Pass Review. Documents identified during first-pass review as potentially privileged, partially privileged (requiring redaction), or presenting complex privilege issues will be escalated to Calderwood & Harkness attorneys — specifically, Jasmine Thornton and Liam Donahue, under the supervision of Victoria Chambers — for final privilege determinations. All privilege calls will be made by Calderwood & Harkness attorneys, not by contract reviewers.

The privilege categories applicable to this production are as follows:

• Attorney-client privilege: Confidential communications between BRB personnel and BRB's attorneys (including Calderwood & Harkness LLP, Caldwell Pratt & Stein LLP, and BRB's in-house legal department under Derek Sung) made for the purpose of seeking or providing legal advice.

• Attorney work-product doctrine: Documents prepared by or at the direction of BRB's attorneys in anticipation of litigation or in connection with the provision of legal services, reflecting attorneys' mental impressions, conclusions, opinions, or legal theories.

• Bank-examination privilege: Confidential communications between BRB and its primary federal banking regulator, the Office of the Comptroller of the Currency ("OCC"), and OCC examination reports and related materials. This privilege is discussed in greater detail in Section IX below.

Documents withheld in their entirety on privilege grounds will be identified on a privilege log as described in Section VIII below. Documents produced with redactions on privilege grounds will be produced with clearly marked redaction boxes indicating the basis for each redaction.

With respect to the risk of inadvertent disclosure of privileged materials, BRB respectfully proposes that the parties enter into a clawback protocol consistent with Federal Rule of Evidence 502(d) and the Division of Enforcement's established practices. Specifically, BRB proposes that any inadvertent production of documents or information protected by the attorney-client privilege, the work-product doctrine, or the bank-examination privilege shall not constitute a waiver of any such privilege or protection, whether as to the specific documents or information produced or as to any other documents or information relating to the same subject matter. Upon notification by BRB that privileged documents have been inadvertently produced, the Staff would promptly return, sequester, or destroy such documents and would not use them in any proceedings. BRB requests the Staff's agreement to this protocol, and, if appropriate, BRB is prepared to seek a court order under Federal Rule of Evidence 502(d) to formalize the non-waiver protections.

V. Proposed Production Format

A. Document Format

BRB proposes to produce documents in the following format, which is consistent with the Commission's standard production specifications and with the format discussed during the meet-and-confer sessions:

Image Format. Documents will be produced in single-page TIFF image format (.tif) at a resolution of 300 dpi, in black and white. Where documents contain color content material to their meaning (e.g., color-coded charts, graphs, or presentations), color TIFF or JPEG images will be produced. Extracted text files will accompany each TIFF image; where extracted text is unavailable or unreliable (e.g., for scanned hard-copy documents), OCR-generated text will be provided.

Load Files. Each production will include standard load files in the following formats: (a) Ashgrove Technologies .dat file (delimited data file containing metadata and coding fields); (b) Opticon .opt file (image cross-reference file linking Bates numbers to TIFF images); and (c) Harborline Services Inc. .lfp file (image load file). The delimiter characters used in the .dat file will be: comma (,) as the field separator; quote (") as the text qualifier; and newline as the record separator, consistent with Ashgrove Technologies default settings.

Bates Numbering. All produced documents will bear sequential Bates numbering, beginning at BRB-SEC-000001 and continuing sequentially through all productions. Bates numbers will be stamped on the lower-right corner of each page image. The Bates prefix "BRB-SEC-" will be used consistently across all productions in this matter.

Metadata. The following metadata fields will be extracted and produced for all documents, to the extent available:

Native File Productions. For certain document types where TIFF imaging would not adequately preserve data integrity or usability, BRB will produce documents in their native electronic format. This category includes, but is not limited to: (a) Ashbury Holdings Excel spreadsheets and workbooks containing formulas, pivot tables, macros, or multiple worksheets relevant to ACL calculations, vintage cohort analyses, or credit-quality reporting; (b) Ridgeway Data Systems databases or other structured data repositories; and (c) any other files for which the Staff specifically requests native production. Native files will be Bates-stamped via a placeholder TIFF image (a single-page TIFF containing the Bates number and the notation "Document Produced in Native Format") and will be linked to their corresponding load file entries.

Redactions. Documents produced with redactions will include clearly visible redaction boxes (opaque black or white boxes overlaying the redacted content) with a notation identifying the basis for each redaction. The following redaction basis designations will be used: "Attorney-Client Privilege," "Work Product," "Bank-Examination Privilege," "Privilege — Attorney-Client / Work Product" (for dual-basis redactions), or other specific designations as applicable. The unredacted portions of redacted documents will be fully legible.

B. Production Media

Productions will be delivered to the Staff via one of the following methods, as directed by the Staff:

• Secure FTP upload: BRB will upload production files to the SEC's designated electronic production portal using secure file transfer protocol, in accordance with the Commission's technical specifications for electronic productions.

• Encrypted external media: Where directed by the Staff or where file sizes exceed practical upload limits, BRB will deliver productions on encrypted external hard drives or USB media, shipped via secure courier to the Staff's designated delivery address.

Each production will be accompanied by a cover letter identifying the following information: (a) the production number (e.g., Production 1, Production 2, etc.); (b) the Bates range included in the production; (c) a custodian-by-custodian breakdown of the documents produced, including document counts and page counts; (d) a summary of document types included; (e) the cumulative privilege log or updates thereto; and (f) any notes regarding issues encountered during processing or production.

VI. Proposed Production Schedule — Rolling Productions

BRB proposes to make its document production on a rolling basis in approximately six tranches, commencing on or about November 1, 2023 and concluding by approximately March 1, 2024. This schedule has been designed to prioritize the production of materials most central to the Staff's inquiry — particularly ACL calculation working papers, BridgeFin credit-quality data, and CECL model documentation — in the earliest tranches, while allowing adequate time for the collection, processing, review, and production of the full scope of responsive materials.

The proposed schedule is as follows:

Production 1 — On or about November 1, 2023

Priority custodians: Patricia "Trish" Navarrete (CFO), Raymond Hu (Chief Accounting Officer), and Naveen Chakravarti (SVP & Division Head, BridgeFin Division). This initial production will focus on ACL calculation working papers, BridgeFin credit-quality reports and vintage cohort performance data, CECL model documentation (including model specifications, assumptions, and governance materials), and supporting schedules for the ACL as reported in BRB's FY 2022 Form 10-K and Q1 and Q2 2023 Forms 10-Q.

Production 2 — On or about December 15, 2023

Additional custodians: Marcus R. Ellingham (CEO), Derek Sung (General Counsel), and Annette Kowalski (Chief Risk Officer). This production will include executive-level communications regarding ACL determinations, BridgeFin portfolio performance, and SEC reporting matters. Audit Committee materials from Gwendolyn Prescott's custodial collection will also be included in this tranche, to the extent they relate to ACL, CECL, and BridgeFin disclosures.

Production 3 — On or about January 8, 2024

Communications with Whitfield Keane LLP, BRB's independent external auditor, to the extent such communications are non-privileged and responsive. This tranche will include audit workpaper requests and responses, management representation letters, audit committee presentations prepared by or in coordination with WK, and related audit-engagement correspondence. Internal credit review memoranda prepared by BRB's credit risk and internal audit functions will also be included.

Production 4 — On or about February 1, 2024

BridgeFin underwriting model documentation and governance materials, including model specifications, AI/ML algorithm parameters, training data descriptions, risk-weight calibrations, scoring rubrics, model validation reports, and model risk management committee minutes. This production will be subject to the confidential treatment request set forth in Section VII below. Re-aging and loan modification records, including loan-level data reflecting re-aging events, troubled debt restructurings, and modified loan terms within the BridgeFin portfolio, will also be included in this tranche.

Production 5 — On or about February 15, 2024

Supplemental collections and gap-fill productions. This tranche is reserved for documents identified through supplemental keyword searches, additional custodian collections (if requested by the Staff and agreed upon through further meet-and-confer discussions), and any materials identified as responsive during the privilege review of earlier tranches that were not captured in the initial collections.

Production 6 — On or about March 1, 2024

Final production, including any remaining responsive documents, and the completed cumulative privilege log. BRB will provide a certification of completeness with this final production, confirming that BRB has conducted a reasonable and diligent search for responsive materials and that all non-privileged, responsive documents have been produced.

BRB will endeavor to meet the dates set forth above but reserves the right to adjust individual production dates as may be necessary given the volume and complexity of responsive documents, unforeseen processing or review challenges, or other circumstances beyond BRB's reasonable control. BRB will provide advance notice to the Staff of any anticipated delays and will work cooperatively with the Staff to minimize any impact on the investigation's timeline.

BRB further notes that this production schedule has been designed to accommodate the possibility that the Staff may issue testimony subpoenas for individual witnesses during the pendency of the document production. BRB will prioritize the production of documents relevant to any scheduled testimony to ensure that both the Staff and the witness have the benefit of the relevant documentary record in advance of any testimonial proceedings.

VII. Request for Confidential Treatment of Proprietary Materials

A. Nature of Proprietary Materials

BRB's BridgeFin division utilizes a proprietary AI-driven underwriting model and credit-scoring algorithm (collectively, the "BridgeFin Model") that represents significant trade secrets and competitively sensitive intellectual property of the Bank. The BridgeFin Model was developed in-house by BRB's data science and credit analytics teams over a period of approximately three years, at a cost exceeding $47 million in development and ongoing refinement expenses, and constitutes a core competitive asset of BRB's digital lending business.

The BridgeFin digital lending platform was launched in Q3 2020 and has experienced rapid growth. As of December 31, 2022, the BridgeFin loan portfolio had an outstanding balance of approximately $4.1 billion, having originated approximately $2.87 billion in new loans during FY 2022. The BridgeFin Model is central to BRB's competitive position in the digital lending market, as it enables the Bank to assess creditworthiness and price risk in real time using advanced machine learning techniques that are not employed by BRB's principal competitors. The disclosure of the BridgeFin Model's specifications, parameters, or methodology to competitors or the public would cause substantial and irreparable competitive harm to BRB.

Documents responsive to the Subpoena that fall within the scope of this confidential treatment request include, but are not limited to:

• Detailed BridgeFin Model specifications, including architecture descriptions, feature engineering methodologies, and algorithmic logic;

• Training data parameters, including data source descriptions, variable definitions, and data preprocessing protocols;

• Risk-weight calibrations and calibration methodologies;

• Proprietary credit-scoring rubrics and scoring thresholds;

• Model validation reports, including backtesting results, sensitivity analyses, and champion-challenger testing outputs;

• BRB's internal vintage-cohort loss-rate models, including proprietary assumptions, regression coefficients, and forward-looking economic scenario weightings;

• Qualitative overlay frameworks and Q-factor calculation methodologies used in BRB's ACL determination process; and

• CECL model governance documentation, including model risk management policies, approval protocols, and ongoing monitoring frameworks.

B. Legal Basis for Confidential Treatment

BRB's request for confidential treatment is made pursuant to the following legal authorities:

17 C.F.R. § 200.83 — SEC Rules of Practice. Section 200.83 establishes the procedure by which persons submitting information to the Commission may request confidential treatment of such information. BRB intends to submit a formal application for confidential treatment under this rule concurrently with the production containing the proprietary materials identified above.

Freedom of Information Act, Exemption 4 (5 U.S.C. § 552(b)(4)). FOIA Exemption 4 protects from public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." The BridgeFin Model specifications, algorithm parameters, credit-scoring rubrics, and related technical documentation constitute trade secrets within the meaning of Exemption 4, as they derive independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use. The materials are also confidential commercial information, as BRB customarily guards them from public disclosure and their release would cause substantial competitive harm.

Section 21(a) of the Securities Exchange Act of 1934. Section 21(a) imposes upon the Commission an obligation to maintain the confidentiality of information obtained in the course of its investigations. BRB respectfully requests that the Staff honor this obligation with particular care with respect to the proprietary materials identified in this section.

BRB's proprietary underwriting models and credit algorithms are not publicly available. They are maintained as confidential trade secrets within BRB's organization, subject to strict access controls and confidentiality protections, and are shared only with BRB personnel on a need-to-know basis. Their disclosure, whether to competitors, the public, or other parties, would provide competitors with detailed insight into BRB's proprietary credit-assessment methodology and would cause substantial, quantifiable competitive harm to BRB's digital lending business.

C. Specific Request

In light of the foregoing, BRB respectfully requests the following:

1. That all documents containing proprietary BridgeFin underwriting model specifications, AI/ML algorithm parameters, credit-scoring rubrics, training data parameters, risk-weight calibrations, and related technical documentation be designated "CONFIDENTIAL — PROPRIETARY BUSINESS INFORMATION" and be subject to restricted access within the Division of Enforcement. BRB requests that access to such materials be limited to Staff members directly assigned to this investigation and their supervisors.

2. That such materials not be shared with other divisions, offices, or bureaus of the Commission, or with any third party (including other governmental agencies), without prior written notice to BRB and a reasonable opportunity for BRB to seek a protective order from the appropriate tribunal. BRB acknowledges that the Commission's inter-agency information-sharing obligations may require disclosure in certain limited circumstances, and BRB requests that advance notice be provided to BRB before any such disclosure to the extent permitted by applicable law and Commission policy.

3. BRB will clearly mark all confidential documents with a "CONFIDENTIAL" designation stamp applied to each page of the document in addition to the standard Bates numbering. This marking will enable the Staff to readily identify materials subject to the confidential treatment request and to apply the appropriate access restrictions.

4. BRB will submit a formal application for confidential treatment under 17 C.F.R. § 200.83 concurrently with the production containing the proprietary materials described above. Based on the current production schedule, BRB anticipates that the formal application will be submitted in connection with Production 4, on or about February 1, 2024. The formal application will identify the specific documents and Bates ranges for which confidential treatment is sought and will provide a detailed justification for the request, including a description of the competitive harm that would result from disclosure.

VIII. Privilege Log Format

BRB will maintain and produce a cumulative privilege log on a rolling basis, updated with each production. The privilege log will be provided in both Ashbury Holdings Excel (.xlsx) format and PDF format to facilitate the Staff's review.

The privilege log will include the following fields for each withheld or redacted document:

BRB anticipates that the privilege log will be substantial in scope given the volume of communications between BRB personnel and counsel — both Calderwood & Harkness LLP (in connection with the current investigation and related advice) and Caldwell Pratt & Stein LLP (in connection with the preparation and review of BRB's periodic reports and SEC filings) — as well as communications related to OCC examinations and bank-examination materials. BRB will make every effort to provide detailed and informative log entries that enable the Staff to assess the privilege assertions without disclosing privileged content.

To the extent the Staff identifies privilege log entries that it wishes to discuss or challenge, BRB is prepared to engage in good-faith discussions regarding any specific privilege assertions and to provide additional information as appropriate to resolve any disputes.

IX. Bank-Examination Privilege

BRB notes that certain documents responsive to the Subpoena may be subject to the bank-examination privilege, which protects from disclosure confidential communications between a regulated financial institution and its primary federal banking regulator, as well as examination reports, supervisory correspondence, and related materials prepared by or for the regulator in connection with the examination and supervision process.

BRB is a national banking association chartered by the Office of the Comptroller of the Currency under OCC Charter No. 24891. BRB holds a satisfactory composite CAMELS rating (2 composite) as of the most recent examination cycle completed in September 2023. As a nationally chartered bank, BRB is subject to the OCC's primary supervisory and examination authority, and the OCC's examination and supervisory files include materials relating to, among other things, BRB's credit risk management practices, ACL adequacy, model risk management, and the BridgeFin portfolio.

Consistent with established precedent recognizing the bank-examination privilege — including In re Subpoena Served Upon the Comptroller of the Currency, 967 F.2d 630 (D.C. Cir. 1992), and related authority — and consistent with inter-agency protocols between the Commission and the federal banking regulators, BRB will log bank-examination privileged documents on its privilege log and will not produce them absent a specific request from the Staff and a reasonable opportunity for BRB to confer with the OCC regarding any potential waiver of the privilege. BRB recognizes that the bank-examination privilege belongs to the regulator rather than the regulated institution, and BRB will defer to the OCC's position regarding whether waiver is appropriate in any particular instance.

BRB understands that the SEC and the OCC maintain information-sharing agreements that may facilitate the Staff's access to bank-examination materials through inter-agency channels. BRB is prepared to cooperate in facilitating any such inter-agency requests to the extent consistent with the OCC's policies and applicable law.

X. Cooperation and Further Discussions

BRB remains committed to full and transparent cooperation with the Staff's investigation. BRB views the proposals set forth in this letter as a framework intended to facilitate an efficient and orderly document production, and BRB welcomes further meet-and-confer sessions with the Staff to refine any aspect of the production protocol, including the custodian list, search terms, date range, production format, production schedule, privilege review methodology, or confidentiality request.

BRB respectfully requests that the Staff direct all questions, correspondence, and communications regarding the document production and the investigation generally to the following primary contacts at Calderwood & Harkness LLP:

Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4127

Email: vchambers@calderwoodharkness.com

Jasmine Thornton Associate Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4293

Email: jthornton@calderwoodharkness.com

BRB is available to meet with the Staff at any time to discuss the proposals in this letter and to address any questions or concerns the Staff may have.

XI. Reservation of Rights

BRB expressly reserves all rights, privileges, and defenses available to it under applicable law, regulation, and rule, including but not limited to:

• The attorney-client privilege;

• The attorney work-product doctrine;

• The bank-examination privilege;

• Any and all other applicable privileges, immunities, or protections recognized under federal or state law; and

• All rights and defenses under the United States Constitution, the Securities Exchange Act of 1934, the rules and regulations of the Commission, and applicable procedural and evidentiary rules.

Nothing in this letter, in BRB's production of documents, or in any communication between BRB's counsel and the Staff shall be deemed a waiver of any right, privilege, or defense, whether as to the specific documents produced, the subject matter of those documents, or any other matter. BRB's production of documents is made in response to compulsory process issued by the Commission pursuant to its investigative authority, and such production does not constitute an admission of any fact, any wrongdoing, or any violation of law by BRB, its officers, directors, employees, or affiliates.

We appreciate the Staff's time and attention in reviewing the proposals contained in this letter. BRB is committed to a constructive working relationship with the Staff and to the prompt and complete production of responsive documents in this matter. We are available to discuss any aspect of this letter at the Staff's earliest convenience and can be reached at the contact information set forth above.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers Partner

425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4127

Email: vchambers@calderwoodharkness.com

Engagement/Matter No.: SC-MAT-2023-4172

cc (via electronic mail):

Gregory Bonham, Assistant Director, Financial Fraud Unit, Division of Enforcement, U.S. Securities and Exchange Commission

Renata Moss, Branch Chief, Division of Enforcement, U.S. Securities and Exchange Commission

Diane Milosevic, Staff Accountant, Division of Enforcement, U.S. Securities and Exchange Commission

Derek Sung, General Counsel, Belmont Ridge Bank National Association (via separate cover, privileged and confidential)

Field Name	Description
Custodian	Name of the custodian from whose files the document was collected
Author	Author of the document (for non-email documents)
Date Created	Date the document was originally created
Date Modified	Date the document was last modified
Date Sent	Date sent (for email documents)
From	Sender (for email documents)
To	Recipient(s) (for email documents)
CC	Carbon copy recipient(s) (for email documents)
BCC	Blind carbon copy recipient(s) (for email documents)
Subject	Subject line (for email documents) or title (for non-email documents)
File Name	Original file name
File Extension	Original file extension
File Path	Original file path from the source collection
MD5 Hash	MD5 hash value for de-duplication and authentication purposes
Log Field	Description
Bates Begin	Beginning Bates number of the withheld document (or the Bates number of the redacted document)
Bates End	Ending Bates number of the withheld document
Date	Date of the document (date sent for emails; date created for other documents)
Author / From	Author of the document or sender of the email
Recipient / To	Recipient(s) of the document or email
CC	Carbon copy recipient(s), if applicable
Document Type	Type of document (e.g., email, memorandum, presentation, spreadsheet, letter)
Description	Brief, non-privileged description of the document's general subject matter
Privilege Basis	Applicable privilege(s) asserted (Attorney-Client, Work Product, Bank-Examination, or combination thereof)

CALDERWOOD & HARKNESS LLP Attorneys at Law
425 Lexington Avenue, 30th Floor New York, New York 10017
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
October 20, 2023
VIA ELECTRONIC MAIL AND HAND DELIVERY
Andrea Felton, Esq. Senior Staff Attorney Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549
Christopher Yuen, Esq. Staff Attorney Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549
Re: In the Matter of Belmont Ridge Bank National Association File No. HO-14287 SEC Subpoena No. HO-14287-001 (Documents), issued October 15, 2023 Formal Order of Investigation No. EN-2023-0947, issued October 12, 2023
Dear Ms. Felton and Mr. Yuen:
I. Introduction and Purpose
Calderwood & Harkness LLP represents Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced investigation by the Division of Enforcement (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission"). This representation encompasses all matters arising from Formal Order of Investigation No. EN-2023-0947, issued October 12, 2023 (the "Formal Order"), and the document subpoena designated Subpoena No. HO-14287-001 (the "Subpoena"), issued to BRB on October 15, 2023. Our firm's engagement and matter reference number for this representation is SC-MAT-2023-4172.
The purpose of this letter is to set forth, for the Staff's review and comment, BRB's proposed search methodology, document custodian list, date range, keyword search terms, production format, and rolling production schedule for its compliance with the Subpoena. In addition, this letter presents BRB's request for confidential treatment of certain proprietary and competitively sensitive materials that are anticipated to be responsive to the Subpoena, as well as BRB's proposed privilege log format and the Bank's position regarding the bank-examination privilege.
The following Calderwood & Harkness attorneys are authorized to communicate with the Staff on behalf of BRB in connection with this investigation and should be included in all correspondence and communications:
• Victoria Chambers, Partner (Responsible Partner and Primary Contact)
• Howard Quinn, Partner (Billing Partner)
• Jasmine Thornton, Associate (Lead Associate)
• Liam Donahue, Associate (Working Associate)
BRB reaffirms the cooperation posture set forth in its initial response letter dated September 29, 2023, in which BRB expressed its commitment to working with the Staff in a transparent, good-faith manner throughout this investigation. BRB intends to produce all non-privileged, responsive documents in its possession, custody, or control on a schedule designed to facilitate the Staff's efficient review.
The proposals contained in this letter reflect and incorporate the productive meet-and-confer discussions between undersigned counsel and the Staff that took place on October 16, 2023 and October 18, 2023. We are grateful for the Staff's constructive engagement during those discussions and believe that the framework set forth below reflects a shared understanding of the scope and logistics of BRB's production. To the extent the Staff has additional comments or requests regarding any aspect of this protocol, BRB welcomes further dialogue.
II. Proposed Document Custodians
Based on the specifications set forth in the Subpoena and BRB's assessment of the individuals most likely to possess documents and communications responsive to the Subpoena's categories of requested materials, BRB proposes the following seven custodians for its initial document collection:
1. Marcus R. Ellingham — Chief Executive Officer, Belmont Ridge Bank National Association. Mr. Ellingham has served as CEO since 2018 and, in that capacity, has oversight of all Bank operations, including the BridgeFin division. He is a signatory to BRB's periodic reports filed with the Commission and participates in the Bank's quarterly earnings calls and investor communications.
2. Patricia "Trish" Navarrete — Chief Financial Officer, Belmont Ridge Bank National Association. Ms. Navarrete is the senior executive responsible for the Bank's financial reporting, including the determination and disclosure of the allowance for credit losses ("ACL"), the adoption and implementation of the current expected credit loss ("CECL") methodology under ASC 326, and the preparation of BRB's Forms 10-K and 10-Q. She is a co-signatory to BRB's periodic reports.
3. Derek Sung — General Counsel and Chief Legal Officer, Belmont Ridge Bank National Association. Mr. Sung oversees BRB's legal department, including regulatory compliance, corporate governance, and the coordination of outside counsel engagements. Mr. Sung has been involved in communications with both Calderwood & Harkness and BRB's regular securities reporting counsel regarding the matters under investigation. Documents collected from Mr. Sung's files are expected to include a significant volume of privileged communications; such documents will be withheld or redacted and logged as described in Sections IV.C and VIII below.
4. Annette Kowalski — Chief Risk Officer, Belmont Ridge Bank National Association. Ms. Kowalski is responsible for BRB's enterprise risk management function, including oversight of credit risk, model risk, and portfolio risk across all lending divisions. She chairs BRB's internal Model Risk Governance Committee and has oversight responsibility for the validation and ongoing monitoring of the BridgeFin underwriting model.
5. Raymond Hu — Chief Accounting Officer, Belmont Ridge Bank National Association. Mr. Hu oversees BRB's accounting operations, including the preparation of ACL calculations, the application of qualitative overlays and Q-factors, the maintenance of CECL model governance documentation, and the coordination with BRB's independent external auditor, Whitfield Keane LLP ("WK"), on audit and review engagements.
6. Naveen Chakravarti — Senior Vice President and Division Head, BridgeFin Division, Belmont Ridge Bank National Association. Mr. Chakravarti leads the BridgeFin division, which is not a separate legal entity but rather an internal operating division of BRB. BridgeFin operates BRB's digital lending platform, which utilizes a proprietary AI-driven underwriting model. Mr. Chakravarti has direct management responsibility for loan origination, credit quality monitoring, vintage cohort performance tracking, and portfolio analytics within BridgeFin. His custodial collection will include materials from BridgeFin-specific shared drives, databases, and internal communication platforms.
7. Gwendolyn Prescott — Audit Committee Chair (Independent Director), Belmont Ridge Bank National Association. Ms. Prescott's custodial collection will be limited to Audit Committee materials, including committee meeting minutes, presentations, and related correspondence, to the extent such materials relate to the ACL, CECL implementation, BridgeFin disclosures, or communications with BRB's independent external auditor. BRB does not propose to collect Ms. Prescott's personal communications or materials unrelated to her service on the Audit Committee.
BRB notes that, with respect to Custodian No. 6, the BridgeFin division operates within BRB's corporate infrastructure and does not maintain a separate legal existence, separate books and records for SEC reporting purposes, or separate governance structures apart from the Bank. Accordingly, all BridgeFin-related documents are BRB documents and will be collected and produced as part of BRB's production.
BRB offers to include additional custodians as the Staff may reasonably request following its review of the initial productions. Any request for additional custodians would be subject to further meet-and-confer discussions to ensure the proportionality and relevance of the expanded collection.
In addition, BRB notes that its regular securities reporting counsel, Caldwell Pratt & Stein LLP ("CPS"), whose lead partner is Martin Caldwell (51 West 52nd Street, 24th Floor, New York, NY 10019), prepared and reviewed the Forms 10-K and 10-Q at issue in this investigation. Documents in CPS's possession that are responsive to the Subpoena will be collected and produced by BRB, with CPS's full cooperation, subject to applicable privileges including attorney-client privilege and attorney work-product protection. BRB will coordinate with CPS to ensure that all non-privileged, responsive materials held by CPS are included in BRB's production and that privileged materials are appropriately logged.
III. Proposed Date Range
BRB proposes to collect and search for responsive documents dated or created within the period of January 1, 2021 through October 15, 2023 (the date the Subpoena was issued). This date range was selected to provide comprehensive coverage of the relevant time period while remaining proportional to the scope of the Staff's inquiry, for the following reasons:
• The proposed start date of January 1, 2021 captures the period beginning one full fiscal year prior to BRB's fiscal year ended December 31, 2022 ("FY 2022"), which is the principal reporting period at issue. This ensures that documents reflecting the analytical inputs, assumptions, and credit-quality data underlying the FY 2022 ACL are fully captured, including year-over-year comparative analyses and trend data.
• The proposed date range encompasses the preparation, review, and filing of the following BRB periodic reports: (a) BRB's FY 2022 Annual Report on Form 10-K, filed with the Commission on February 28, 2023; (b) BRB's Quarterly Report on Form 10-Q for Q1 2023 (quarter ended March 31, 2023), filed on May 10, 2023; and (c) BRB's Quarterly Report on Form 10-Q for Q2 2023 (quarter ended June 30, 2023), filed on August 9, 2023.
• The date range captures BridgeFin portfolio credit-quality data from 2021 onward, which is relevant given that the Staff's inquiry includes BridgeFin loan vintage cohorts originated after Q2 2021. Loan-level performance data, delinquency tracking, charge-off analytics, and re-aging records for these vintage cohorts will be included in the production.
• BRB adopted CECL (ASC 326, Financial Instruments — Credit Losses) effective January 1, 2020. The proposed date range captures the second and third full years of CECL implementation, which is the period during which BRB's CECL model matured and was calibrated with actual post-adoption performance data. Documents reflecting model calibration, validation, qualitative overlay adjustments, and governance processes during this period are expected to be highly relevant.
BRB is prepared to discuss with the Staff any request to narrow or expand the proposed date range. BRB notes that expanding the date range to include the first year of CECL adoption (2020) may be considered if the Staff determines that pre-2021 CECL implementation decisions are material to its inquiry, though BRB believes the proposed range is sufficient for purposes of the current investigation.
IV. Proposed Search Terms and Methodology
A. Electronic Data Collection
BRB will collect electronic documents from the following data sources for each of the proposed custodians:
• Email accounts: Each custodian's Strathmore Data Systems / Outlook email account, including all mailbox folders (Inbox, Sent Items, Deleted Items, Drafts, and any user-created folders), as maintained on BRB's email servers and archival systems.
• Local and network drives: Files stored on each custodian's local hard drive (where applicable) and on BRB's shared network drives to which the custodian has access and to which the custodian has saved or authored responsive materials.
• Aldermere Systems sites: Documents stored on BRB's internal collaboration sites, including the sites maintained by the Finance department, the Risk Management department, the BridgeFin division, the Legal department, and the Audit Committee.
• Enterprise document management system: BRB utilizes an enterprise document management system (Stonefield Systems) for the storage and management of certain financial reporting, legal, and compliance documents. Responsive documents from this system will be collected and included in the production.
With respect to Custodian No. 6, Naveen Chakravarti, the collection will additionally include BridgeFin division-specific shared drives and internal databases, including the BridgeFin Portfolio Analytics Database, the BridgeFin Loan Origination System data repository, and the BridgeFin Credit Quality Dashboard data exports. These sources are expected to contain credit-quality reports, vintage cohort performance data, delinquency and charge-off records, re-aging and loan modification tracking records, and underwriting model documentation.
Hard-copy documents in the possession of relevant custodians will be identified, collected, and scanned at a resolution sufficient to produce legible TIFF images. Scanned hard-copy documents will be processed with optical character recognition ("OCR") technology and incorporated into the electronic production set. BRB's initial assessment is that the volume of hard-copy documents is limited, as BRB's financial reporting, risk management, and lending operations are predominantly conducted electronically.
B. Keyword Search Terms
BRB proposes the following keyword search terms, which were developed in consultation with the Staff during the meet-and-confer discussions held on October 16 and October 18, 2023. These terms are designed to identify documents responsive to the Subpoena's categories of requested materials while minimizing the capture of clearly non-responsive materials:
1. "BridgeFin" OR "Bridge Fin"
2. "allowance for credit loss*" OR "ACL"
3. "CECL" OR "ASC 326" OR "current expected credit loss*"
4. "loan loss provision" OR "provision for credit loss"
5. "charge-off" OR "chargeoff" OR "net charge-off"
6. "delinquenc" OR "past due" OR "90 day" OR "90+ day*"
7. "re-ag" OR "reag" OR "loan modification" OR "modified loan" OR "troubled debt restructur"
8. "vintage" OR "cohort" OR "vintage cohort"
9. "underwriting model" OR "credit model" OR "AI model" OR "scoring model"
10. "10-K" OR "10-Q" OR "annual report" OR "quarterly report" — applied in combination with any of the ACL-related or BridgeFin-related terms listed above (i.e., Boolean connector requiring co-occurrence within the same document)
11. "qualitative overlay" OR "qualitative adjustment" OR "Q-factor"
12. "Whitfield Keane" OR "WK" OR "Lorraine Dupont" — designed to capture audit-related communications with BRB's independent external auditor, Whitfield Keane LLP, and the engagement partner, Lorraine Dupont
13. "OCC" OR "examination" OR "CAMELS" — limited to documents in which these terms appear in the context of ACL-related matters; BRB will apply contextual filtering during the responsiveness review to exclude hits that relate solely to non-ACL OCC examination topics
The asterisk () denotes a wildcard/stemming operator that will capture variations of the root term (e.g., "delinquenc" will capture "delinquency," "delinquencies," "delinquent," etc.).
The search terms will be applied to the collected data sets using industry-standard e-discovery processing software. Standard de-duplication will be performed across custodians to eliminate exact duplicate documents (based on MD5 hash values), with the custodian of the "master" copy identified and all other custodians who possessed the duplicate listed in the metadata. De-NISTing — the removal of system-generated files identified in the National Institute of Standards and Technology's National Software Reference Library — will be performed to exclude operating system files, application executables, and other system-level files that are not substantive documents.
All documents identified through keyword search hits will be reviewed for responsiveness before production. BRB will not produce documents that are clearly non-responsive notwithstanding a keyword hit (e.g., a document that contains the acronym "ACL" in reference to an anterior cruciate ligament, or a passing reference to a "quarterly report" in a context unrelated to BRB's SEC filings). Family groups, including parent emails and their attachments, will be kept intact; where an attachment is responsive, the parent email and all sibling attachments will be produced together.
BRB reserves the right to propose supplemental or revised search terms as the production progresses and as additional information becomes available regarding the scope of the Staff's inquiry. BRB also welcomes the Staff's input on additional search terms at any time.
C. Privilege Review Methodology
All potentially responsive documents identified through the search process described above will be subject to a two-pass privilege review protocol:
First-Pass Review. An initial responsiveness and privilege review will be conducted by trained contract attorneys under the direct supervision of Calderwood & Harkness LLP. These reviewers will be trained on BRB's organizational structure, the nature of the investigation, the applicable privilege categories, and the criteria for responsiveness. First-pass reviewers will code documents for responsiveness, privilege, and confidentiality designations.
Second-Pass Review. Documents identified during first-pass review as potentially privileged, partially privileged (requiring redaction), or presenting complex privilege issues will be escalated to Calderwood & Harkness attorneys — specifically, Jasmine Thornton and Liam Donahue, under the supervision of Victoria Chambers — for final privilege determinations. All privilege calls will be made by Calderwood & Harkness attorneys, not by contract reviewers.
The privilege categories applicable to this production are as follows:
• Attorney-client privilege: Confidential communications between BRB personnel and BRB's attorneys (including Calderwood & Harkness LLP, Caldwell Pratt & Stein LLP, and BRB's in-house legal department under Derek Sung) made for the purpose of seeking or providing legal advice.
• Attorney work-product doctrine: Documents prepared by or at the direction of BRB's attorneys in anticipation of litigation or in connection with the provision of legal services, reflecting attorneys' mental impressions, conclusions, opinions, or legal theories.
• Bank-examination privilege: Confidential communications between BRB and its primary federal banking regulator, the Office of the Comptroller of the Currency ("OCC"), and OCC examination reports and related materials. This privilege is discussed in greater detail in Section IX below.
Documents withheld in their entirety on privilege grounds will be identified on a privilege log as described in Section VIII below. Documents produced with redactions on privilege grounds will be produced with clearly marked redaction boxes indicating the basis for each redaction.
With respect to the risk of inadvertent disclosure of privileged materials, BRB respectfully proposes that the parties enter into a clawback protocol consistent with Federal Rule of Evidence 502(d) and the Division of Enforcement's established practices. Specifically, BRB proposes that any inadvertent production of documents or information protected by the attorney-client privilege, the work-product doctrine, or the bank-examination privilege shall not constitute a waiver of any such privilege or protection, whether as to the specific documents or information produced or as to any other documents or information relating to the same subject matter. Upon notification by BRB that privileged documents have been inadvertently produced, the Staff would promptly return, sequester, or destroy such documents and would not use them in any proceedings. BRB requests the Staff's agreement to this protocol, and, if appropriate, BRB is prepared to seek a court order under Federal Rule of Evidence 502(d) to formalize the non-waiver protections.
V. Proposed Production Format
A. Document Format
BRB proposes to produce documents in the following format, which is consistent with the Commission's standard production specifications and with the format discussed during the meet-and-confer sessions:
Image Format. Documents will be produced in single-page TIFF image format (.tif) at a resolution of 300 dpi, in black and white. Where documents contain color content material to their meaning (e.g., color-coded charts, graphs, or presentations), color TIFF or JPEG images will be produced. Extracted text files will accompany each TIFF image; where extracted text is unavailable or unreliable (e.g., for scanned hard-copy documents), OCR-generated text will be provided.
Load Files. Each production will include standard load files in the following formats: (a) Ashgrove Technologies .dat file (delimited data file containing metadata and coding fields); (b) Opticon .opt file (image cross-reference file linking Bates numbers to TIFF images); and (c) Harborline Services Inc. .lfp file (image load file). The delimiter characters used in the .dat file will be: comma (,) as the field separator; quote (") as the text qualifier; and newline as the record separator, consistent with Ashgrove Technologies default settings.
Bates Numbering. All produced documents will bear sequential Bates numbering, beginning at BRB-SEC-000001 and continuing sequentially through all productions. Bates numbers will be stamped on the lower-right corner of each page image. The Bates prefix "BRB-SEC-" will be used consistently across all productions in this matter.
Metadata. The following metadata fields will be extracted and produced for all documents, to the extent available:
Native File Productions. For certain document types where TIFF imaging would not adequately preserve data integrity or usability, BRB will produce documents in their native electronic format. This category includes, but is not limited to: (a) Ashbury Holdings Excel spreadsheets and workbooks containing formulas, pivot tables, macros, or multiple worksheets relevant to ACL calculations, vintage cohort analyses, or credit-quality reporting; (b) Ridgeway Data Systems databases or other structured data repositories; and (c) any other files for which the Staff specifically requests native production. Native files will be Bates-stamped via a placeholder TIFF image (a single-page TIFF containing the Bates number and the notation "Document Produced in Native Format") and will be linked to their corresponding load file entries.
Redactions. Documents produced with redactions will include clearly visible redaction boxes (opaque black or white boxes overlaying the redacted content) with a notation identifying the basis for each redaction. The following redaction basis designations will be used: "Attorney-Client Privilege," "Work Product," "Bank-Examination Privilege," "Privilege — Attorney-Client / Work Product" (for dual-basis redactions), or other specific designations as applicable. The unredacted portions of redacted documents will be fully legible.
B. Production Media
Productions will be delivered to the Staff via one of the following methods, as directed by the Staff:
• Secure FTP upload: BRB will upload production files to the SEC's designated electronic production portal using secure file transfer protocol, in accordance with the Commission's technical specifications for electronic productions.
• Encrypted external media: Where directed by the Staff or where file sizes exceed practical upload limits, BRB will deliver productions on encrypted external hard drives or USB media, shipped via secure courier to the Staff's designated delivery address.
Each production will be accompanied by a cover letter identifying the following information: (a) the production number (e.g., Production 1, Production 2, etc.); (b) the Bates range included in the production; (c) a custodian-by-custodian breakdown of the documents produced, including document counts and page counts; (d) a summary of document types included; (e) the cumulative privilege log or updates thereto; and (f) any notes regarding issues encountered during processing or production.
VI. Proposed Production Schedule — Rolling Productions
BRB proposes to make its document production on a rolling basis in approximately six tranches, commencing on or about November 1, 2023 and concluding by approximately March 1, 2024. This schedule has been designed to prioritize the production of materials most central to the Staff's inquiry — particularly ACL calculation working papers, BridgeFin credit-quality data, and CECL model documentation — in the earliest tranches, while allowing adequate time for the collection, processing, review, and production of the full scope of responsive materials.
The proposed schedule is as follows:
Production 1 — On or about November 1, 2023
Priority custodians: Patricia "Trish" Navarrete (CFO), Raymond Hu (Chief Accounting Officer), and Naveen Chakravarti (SVP & Division Head, BridgeFin Division). This initial production will focus on ACL calculation working papers, BridgeFin credit-quality reports and vintage cohort performance data, CECL model documentation (including model specifications, assumptions, and governance materials), and supporting schedules for the ACL as reported in BRB's FY 2022 Form 10-K and Q1 and Q2 2023 Forms 10-Q.
Production 2 — On or about December 15, 2023
Additional custodians: Marcus R. Ellingham (CEO), Derek Sung (General Counsel), and Annette Kowalski (Chief Risk Officer). This production will include executive-level communications regarding ACL determinations, BridgeFin portfolio performance, and SEC reporting matters. Audit Committee materials from Gwendolyn Prescott's custodial collection will also be included in this tranche, to the extent they relate to ACL, CECL, and BridgeFin disclosures.
Production 3 — On or about January 8, 2024
Communications with Whitfield Keane LLP, BRB's independent external auditor, to the extent such communications are non-privileged and responsive. This tranche will include audit workpaper requests and responses, management representation letters, audit committee presentations prepared by or in coordination with WK, and related audit-engagement correspondence. Internal credit review memoranda prepared by BRB's credit risk and internal audit functions will also be included.
Production 4 — On or about February 1, 2024
BridgeFin underwriting model documentation and governance materials, including model specifications, AI/ML algorithm parameters, training data descriptions, risk-weight calibrations, scoring rubrics, model validation reports, and model risk management committee minutes. This production will be subject to the confidential treatment request set forth in Section VII below. Re-aging and loan modification records, including loan-level data reflecting re-aging events, troubled debt restructurings, and modified loan terms within the BridgeFin portfolio, will also be included in this tranche.
Production 5 — On or about February 15, 2024
Supplemental collections and gap-fill productions. This tranche is reserved for documents identified through supplemental keyword searches, additional custodian collections (if requested by the Staff and agreed upon through further meet-and-confer discussions), and any materials identified as responsive during the privilege review of earlier tranches that were not captured in the initial collections.
Production 6 — On or about March 1, 2024
Final production, including any remaining responsive documents, and the completed cumulative privilege log. BRB will provide a certification of completeness with this final production, confirming that BRB has conducted a reasonable and diligent search for responsive materials and that all non-privileged, responsive documents have been produced.
BRB will endeavor to meet the dates set forth above but reserves the right to adjust individual production dates as may be necessary given the volume and complexity of responsive documents, unforeseen processing or review challenges, or other circumstances beyond BRB's reasonable control. BRB will provide advance notice to the Staff of any anticipated delays and will work cooperatively with the Staff to minimize any impact on the investigation's timeline.
BRB further notes that this production schedule has been designed to accommodate the possibility that the Staff may issue testimony subpoenas for individual witnesses during the pendency of the document production. BRB will prioritize the production of documents relevant to any scheduled testimony to ensure that both the Staff and the witness have the benefit of the relevant documentary record in advance of any testimonial proceedings.
VII. Request for Confidential Treatment of Proprietary Materials
A. Nature of Proprietary Materials
BRB's BridgeFin division utilizes a proprietary AI-driven underwriting model and credit-scoring algorithm (collectively, the "BridgeFin Model") that represents significant trade secrets and competitively sensitive intellectual property of the Bank. The BridgeFin Model was developed in-house by BRB's data science and credit analytics teams over a period of approximately three years, at a cost exceeding $47 million in development and ongoing refinement expenses, and constitutes a core competitive asset of BRB's digital lending business.
The BridgeFin digital lending platform was launched in Q3 2020 and has experienced rapid growth. As of December 31, 2022, the BridgeFin loan portfolio had an outstanding balance of approximately $4.1 billion, having originated approximately $2.87 billion in new loans during FY 2022. The BridgeFin Model is central to BRB's competitive position in the digital lending market, as it enables the Bank to assess creditworthiness and price risk in real time using advanced machine learning techniques that are not employed by BRB's principal competitors. The disclosure of the BridgeFin Model's specifications, parameters, or methodology to competitors or the public would cause substantial and irreparable competitive harm to BRB.
Documents responsive to the Subpoena that fall within the scope of this confidential treatment request include, but are not limited to:
• Detailed BridgeFin Model specifications, including architecture descriptions, feature engineering methodologies, and algorithmic logic;
• Training data parameters, including data source descriptions, variable definitions, and data preprocessing protocols;
• Risk-weight calibrations and calibration methodologies;
• Proprietary credit-scoring rubrics and scoring thresholds;
• Model validation reports, including backtesting results, sensitivity analyses, and champion-challenger testing outputs;
• BRB's internal vintage-cohort loss-rate models, including proprietary assumptions, regression coefficients, and forward-looking economic scenario weightings;
• Qualitative overlay frameworks and Q-factor calculation methodologies used in BRB's ACL determination process; and
• CECL model governance documentation, including model risk management policies, approval protocols, and ongoing monitoring frameworks.
B. Legal Basis for Confidential Treatment
BRB's request for confidential treatment is made pursuant to the following legal authorities:
17 C.F.R. § 200.83 — SEC Rules of Practice. Section 200.83 establishes the procedure by which persons submitting information to the Commission may request confidential treatment of such information. BRB intends to submit a formal application for confidential treatment under this rule concurrently with the production containing the proprietary materials identified above.
Freedom of Information Act, Exemption 4 (5 U.S.C. § 552(b)(4)). FOIA Exemption 4 protects from public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." The BridgeFin Model specifications, algorithm parameters, credit-scoring rubrics, and related technical documentation constitute trade secrets within the meaning of Exemption 4, as they derive independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use. The materials are also confidential commercial information, as BRB customarily guards them from public disclosure and their release would cause substantial competitive harm.
Section 21(a) of the Securities Exchange Act of 1934. Section 21(a) imposes upon the Commission an obligation to maintain the confidentiality of information obtained in the course of its investigations. BRB respectfully requests that the Staff honor this obligation with particular care with respect to the proprietary materials identified in this section.
BRB's proprietary underwriting models and credit algorithms are not publicly available. They are maintained as confidential trade secrets within BRB's organization, subject to strict access controls and confidentiality protections, and are shared only with BRB personnel on a need-to-know basis. Their disclosure, whether to competitors, the public, or other parties, would provide competitors with detailed insight into BRB's proprietary credit-assessment methodology and would cause substantial, quantifiable competitive harm to BRB's digital lending business.
C. Specific Request
In light of the foregoing, BRB respectfully requests the following:
1. That all documents containing proprietary BridgeFin underwriting model specifications, AI/ML algorithm parameters, credit-scoring rubrics, training data parameters, risk-weight calibrations, and related technical documentation be designated "CONFIDENTIAL — PROPRIETARY BUSINESS INFORMATION" and be subject to restricted access within the Division of Enforcement. BRB requests that access to such materials be limited to Staff members directly assigned to this investigation and their supervisors.
2. That such materials not be shared with other divisions, offices, or bureaus of the Commission, or with any third party (including other governmental agencies), without prior written notice to BRB and a reasonable opportunity for BRB to seek a protective order from the appropriate tribunal. BRB acknowledges that the Commission's inter-agency information-sharing obligations may require disclosure in certain limited circumstances, and BRB requests that advance notice be provided to BRB before any such disclosure to the extent permitted by applicable law and Commission policy.
3. BRB will clearly mark all confidential documents with a "CONFIDENTIAL" designation stamp applied to each page of the document in addition to the standard Bates numbering. This marking will enable the Staff to readily identify materials subject to the confidential treatment request and to apply the appropriate access restrictions.
4. BRB will submit a formal application for confidential treatment under 17 C.F.R. § 200.83 concurrently with the production containing the proprietary materials described above. Based on the current production schedule, BRB anticipates that the formal application will be submitted in connection with Production 4, on or about February 1, 2024. The formal application will identify the specific documents and Bates ranges for which confidential treatment is sought and will provide a detailed justification for the request, including a description of the competitive harm that would result from disclosure.
VIII. Privilege Log Format
BRB will maintain and produce a cumulative privilege log on a rolling basis, updated with each production. The privilege log will be provided in both Ashbury Holdings Excel (.xlsx) format and PDF format to facilitate the Staff's review.
The privilege log will include the following fields for each withheld or redacted document:
BRB anticipates that the privilege log will be substantial in scope given the volume of communications between BRB personnel and counsel — both Calderwood & Harkness LLP (in connection with the current investigation and related advice) and Caldwell Pratt & Stein LLP (in connection with the preparation and review of BRB's periodic reports and SEC filings) — as well as communications related to OCC examinations and bank-examination materials. BRB will make every effort to provide detailed and informative log entries that enable the Staff to assess the privilege assertions without disclosing privileged content.
To the extent the Staff identifies privilege log entries that it wishes to discuss or challenge, BRB is prepared to engage in good-faith discussions regarding any specific privilege assertions and to provide additional information as appropriate to resolve any disputes.
IX. Bank-Examination Privilege
BRB notes that certain documents responsive to the Subpoena may be subject to the bank-examination privilege, which protects from disclosure confidential communications between a regulated financial institution and its primary federal banking regulator, as well as examination reports, supervisory correspondence, and related materials prepared by or for the regulator in connection with the examination and supervision process.
BRB is a national banking association chartered by the Office of the Comptroller of the Currency under OCC Charter No. 24891. BRB holds a satisfactory composite CAMELS rating (2 composite) as of the most recent examination cycle completed in September 2023. As a nationally chartered bank, BRB is subject to the OCC's primary supervisory and examination authority, and the OCC's examination and supervisory files include materials relating to, among other things, BRB's credit risk management practices, ACL adequacy, model risk management, and the BridgeFin portfolio.
Consistent with established precedent recognizing the bank-examination privilege — including In re Subpoena Served Upon the Comptroller of the Currency, 967 F.2d 630 (D.C. Cir. 1992), and related authority — and consistent with inter-agency protocols between the Commission and the federal banking regulators, BRB will log bank-examination privileged documents on its privilege log and will not produce them absent a specific request from the Staff and a reasonable opportunity for BRB to confer with the OCC regarding any potential waiver of the privilege. BRB recognizes that the bank-examination privilege belongs to the regulator rather than the regulated institution, and BRB will defer to the OCC's position regarding whether waiver is appropriate in any particular instance.
BRB understands that the SEC and the OCC maintain information-sharing agreements that may facilitate the Staff's access to bank-examination materials through inter-agency channels. BRB is prepared to cooperate in facilitating any such inter-agency requests to the extent consistent with the OCC's policies and applicable law.
X. Cooperation and Further Discussions
BRB remains committed to full and transparent cooperation with the Staff's investigation. BRB views the proposals set forth in this letter as a framework intended to facilitate an efficient and orderly document production, and BRB welcomes further meet-and-confer sessions with the Staff to refine any aspect of the production protocol, including the custodian list, search terms, date range, production format, production schedule, privilege review methodology, or confidentiality request.
BRB respectfully requests that the Staff direct all questions, correspondence, and communications regarding the document production and the investigation generally to the following primary contacts at Calderwood & Harkness LLP:
Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4127
Email: vchambers@calderwoodharkness.com
Jasmine Thornton Associate Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4293
Email: jthornton@calderwoodharkness.com
BRB is available to meet with the Staff at any time to discuss the proposals in this letter and to address any questions or concerns the Staff may have.
XI. Reservation of Rights
BRB expressly reserves all rights, privileges, and defenses available to it under applicable law, regulation, and rule, including but not limited to:
• The attorney-client privilege;
• The attorney work-product doctrine;
• The bank-examination privilege;
• Any and all other applicable privileges, immunities, or protections recognized under federal or state law; and
• All rights and defenses under the United States Constitution, the Securities Exchange Act of 1934, the rules and regulations of the Commission, and applicable procedural and evidentiary rules.
Nothing in this letter, in BRB's production of documents, or in any communication between BRB's counsel and the Staff shall be deemed a waiver of any right, privilege, or defense, whether as to the specific documents produced, the subject matter of those documents, or any other matter. BRB's production of documents is made in response to compulsory process issued by the Commission pursuant to its investigative authority, and such production does not constitute an admission of any fact, any wrongdoing, or any violation of law by BRB, its officers, directors, employees, or affiliates.
We appreciate the Staff's time and attention in reviewing the proposals contained in this letter. BRB is committed to a constructive working relationship with the Staff and to the prompt and complete production of responsive documents in this matter. We are available to discuss any aspect of this letter at the Staff's earliest convenience and can be reached at the contact information set forth above.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner
425 Lexington Avenue, 30th Floor New York, New York 10017 Direct: (212) 558-4127
Email: vchambers@calderwoodharkness.com
Engagement/Matter No.: SC-MAT-2023-4172
cc (via electronic mail):
Gregory Bonham, Assistant Director, Financial Fraud Unit, Division of Enforcement, U.S. Securities and Exchange Commission
Renata Moss, Branch Chief, Division of Enforcement, U.S. Securities and Exchange Commission
Diane Milosevic, Staff Accountant, Division of Enforcement, U.S. Securities and Exchange Commission
Derek Sung, General Counsel, Belmont Ridge Bank National Association (via separate cover, privileged and confidential)
Field Name | Description
Custodian | Name of the custodian from whose files the document was collected
Author | Author of the document (for non-email documents)
Date Created | Date the document was originally created
Date Modified | Date the document was last modified
Date Sent | Date sent (for email documents)
From | Sender (for email documents)
To | Recipient(s) (for email documents)
CC | Carbon copy recipient(s) (for email documents)
BCC | Blind carbon copy recipient(s) (for email documents)
Subject | Subject line (for email documents) or title (for non-email documents)
File Name | Original file name
File Extension | Original file extension
File Path | Original file path from the source collection
MD5 Hash | MD5 hash value for de-duplication and authentication purposes
Log Field | Description
Bates Begin | Beginning Bates number of the withheld document (or the Bates number of the redacted document)
Bates End | Ending Bates number of the withheld document
Date | Date of the document (date sent for emails; date created for other documents)
Author / From | Author of the document or sender of the email
Recipient / To | Recipient(s) of the document or email
CC | Carbon copy recipient(s), if applicable
Document Type | Type of document (e.g., email, memorandum, presentation, spreadsheet, letter)
Description | Brief, non-privileged description of the document's general subject matter
Privilege Basis | Applicable privilege(s) asserted (Attorney-Client, Work Product, Bank-Examination, or combination thereof)

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