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Treasury Department clarifies “Essential Critical Infrastructure Workforce” for the financial sector
On March 22, the Treasury Department issued a memorandum stating that the financial services sector is a “Critical Infrastructure Sector” pursuant to the Department of Homeland Security’s Cybersecurity and Infrastructure Security (CISA) March 19 guidance. The memorandum provides that the Essential Critical Infrastructure Workforce for the financial services sector includes workers who are needed to: (i) process and maintain systems for processing financial transactions and services (e.g., payment, clearing and settlement services, wholesale funding, insurance services, and capital markets); (ii) provide consumer access to banking and lending services, such as ATMs and movement of currency (e.g., armored cash carriers); and (iii) support financial institutions (e.g., staffing data and security operations centers). It also includes key third party providers who deliver core services.
On March 24, the Secretary of the Treasury Department, Steven Mnuchin released an additional statement addressing essential financial services workers, expressing strong support for the Department of Homeland Security’s CISA guidance.
CFPB extends comment period for proposed rulemaking on time-barred debt disclosures; CFPB and FTC release 2019 FDCPA report
On March 20, the CFPB announced it was extending the comment period on its Supplemental Notice of Proposed Rulemaking related to time-barred debt disclosures (covered by a Buckley Special Alert) for an additional 30 days. Given the challenges created by Covid-19, the comment period will now end June 5.
The same day, the CFPB and FTC released their annual report to Congress on the administration of the FDCPA, which highlights the 2019 efforts of the agencies. Under a memorandum of understanding, the agencies are provided joint FDCPA enforcement responsibility and may share supervisory and consumer complaint information, as well as collaborate on education efforts. Among other things, the report provides general demographic and economic data about consumer debt and the debt collection industry, and highlights enforcement actions, education efforts, and supervisory findings. The report also notes that the CFPB handled roughly 75,000 complaints filed by consumers about first- and third-party debt collectors in 2019, down from the 81,500 it received in 2018, and engaged in five public enforcement actions arising from alleged FDCPA violations. Judgments resulting from these actions yielded nearly $50 million in consumer redress and $11.2 million in civil money penalties.
With respect to the FTC, the report states that in 2019 the agency obtained approximately $25 million in judgments and permanently banned 23 companies and individuals that engaged in serious and repeated violations of law from working in the debt collection industry. The report also highlights the FTC’s comment letter on the Bureau’s May 2019 Notice of Proposed Rulemaking to implement the FDCPA and to address other debt collection issues, in which the agency stated that it “has long advocated for amendments and clarifications to existing laws to account for changes in the debt collection marketplace and consumer technology” (covered by InfoBytes here).
Washington Department of Financial Institutions issues notice concerning signature and notary requirements
On March 20, the Washington Department of Financial Institutions issued a notice concerning signature requirements on applications and notice filings required during the Covid-19 outbreak. The notice provides that the Securities Division requires all franchise filings to be made electronically through its online electronic filing system, and will not require “wet” signatures on filings. Where a signature is required, copies (including PDF copies) of signed documents are sufficient. Additionally, the Securities Division is waiving any notary requirements during the Covid-19 outbreak.
Washington Department of Financial Institutions urges servicers to support mortgagors
On March 20, the Washington Department of Financial Institutions issued guidance to Washington State regulated and exempt residential mortgage loan servicers regarding support for borrowers impacted by Covid-19. The guidance urges servicers to support adversely impacted mortgagors by, among other things, forbearing mortgage payments for 90 days from their due dates, refraining from reporting late payments to credit rating agencies for 90 days, offering mortgagors an additional 90-day grace period to complete loan modifications, waving late payment fees and online payment fees for 90 days, postponing foreclosures for 90 days, and proactively reaching out to mortgagors to explain the assistance being offered to mortgagors. Such services are also required to ensure that mortgagors do not experience a disruptions of services if the servicer closes its offices. The guidance notes that reasonable and prudent efforts to assist mortgagers will not be subject to examiner criticism.
Federal Reserve Board establishes new program to support flow of credit
On March 20, the Federal Reserve Board expanded its financial support programs of support through creating of the Money Market Mutual Fund Liquidity Facility (MMLF). Under this program, the Federal Reserve Bank of Boston will be able to make loans to eligible financial institutions, to be secured by certain assets purchased from single state and other tax-exempt municipal money market mutual funds. The Federal Reserve Board also provided a term sheet that includes additional detail on the MMLF, and an FAQ page to answer questions relating on the Money Market Mutual Fund Liquidity Facility (MMLF). The FAQs answer questions relating to the purpose and design of the program, borrower information (e.g., borrower eligibility, required borrowing documents), collateral requirements, loan terms (e.g., loan rates, maturity date), and accounting and regulatory implications, among others.
OCC issues bulletin on use of electronic methods for submission of licensing filings
On March 20, the OCC issued Bulletin 2020-20, which strongly recommends the use of electronic methods for submitting licensing filings to the OCC during the Covid-19 pandemic through either through the Central Application Tracking System (CATS) or through the agency’s secure email system. The bulletin notes that submission of a licensing filing in paper form may result in delays in the processing.
NCUA issues letter to federal credit unions regarding annual meeting flexibility
On March 20, the National Credit Union Administration (NCUA) issued a letter to federal credit unions permitting federal credit unions (by adoption by the board of directors of a bylaw) to hold annual meetings, and special member meetings for certain purposes, virtually and without an in-person quorum if certain conditions apply. The letter provides additional guidance to federal credit unions on the ability to revoke the bylaw amendment, the ability to postpone annual meetings, the ability to amend the date of its annual meeting, and the adjournment of a meeting for lack of a quorum.
Fannie Mae issues multifamily investor communication regarding Covid-19
On March 20, Fannie Mae published responses to frequently asked questions related to the impact of Covid-19 on Multifamily MBS and CRT programs. Among other things, the responses clarified that for loans granted forbearance due to Covid-19, Fannie Mae “will continue to advance principal and interest payments on the MBS for at least 120 days and may choose to advance for up to two years before being required to buy the mortgage loan out of the MBS trust.” With respect to the CRT program, Fannie Mae reiterated its commitment to take proactive loss mitigation measures to reduce the likelihood and severity of any losses for any loan that indicates an increased risk of default.
SBA creates website for federal disaster loans
On March 20, the Small Business Administration created a new website for businesses, private nonprofits, homeowners, and renters to apply for disaster loans in connection with Covid-19. The website identifies eligible disaster areas and provides links to apply online and check application status.
Texas regulator issues MLO work from home guidance
On March 20, the Texas Department of Savings and Mortgage Lending issued a notice temporarily suspending any requirement that a physical office be open to the public during posted normal business hours. In addition, the notice provided that licensed MLOs may work from home or another remote location, whether located in Texas or another state, even if the home or remote location is not a licensed branch. However, MLOs are still subject to certain data security requirements and are prohibited from permitting consumers into the MLO’s home.