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  • Washington governor extends suspension of consumer garnishment

    State Issues

    On November 20, the Washington governor issued a proclamation extending a previous moratorium on garnishment for consumer debts until the earlier of December 7, 2020 or the termination of Washington’s Covid-19 State of Emergency. See here, here and here for previous coverage. The suspension applies to garnishment of consumer bank accounts, wages and income to satisfy consumer debt judgments. 

    State Issues Covid-19 Washington Supervision Consumer Finance Debt Collection

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  • Maryland AG obtains $2.6 million in student debt relief

    State Issues

    On November 16, the Maryland attorney general announced that it obtained over $2.6 million in debt relief from a third-party debt buyer for approximately 1,200 former students of a defunct Maryland-based for-profit college. In its press release, the AG alleged that the for-profit college offered “low-quality programs at a price significantly higher than comparable programs at Maryland’s public institutions.” According to the AG, due to the college’s high tuition, students had little choice but to take out loans issued by the college itself. After the college permanently closed, a court-appointed receiver sold the rights to collect the loans to a third-party debt buyer. The AG took the position that, because the college abruptly closed and failed to provide its students with the services promised, the loans should have been canceled rather than sold. To resolve the dispute, the AG and the third-party debt buyer entered into a settlement. Under the terms of the settlement, the third-party debt buyer agreed to cease collection on any of the outstanding loans and to refund approximately 75 percent of the payments collected from the students after it bought the loan portfolio. Furthermore, the debt buyer agreed to remove trade lines relating to the loans from the student’s credit reports.

    State Issues State Attorney General Debt Relief Student Lending Debt Buyer

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  • New York requires clear and conspicuous consumer notice prior to auto-renewal of contracts

    State Issues

    On November 11, the New York governor signed S01475, which requires clear and conspicuous consumer notice and consent prior to an auto-renewal of any contract of any term for any subsequent term. Specifically, the act provides that a business will be deemed to have engaged in unlawful practices if it (i) fails to present the renewal offer terms or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled; (ii) charges a consumer’s credit or debit card, or uses a third party to charge a consumer’s account, without first obtaining a consumer’s affirmative consent to the auto-renewal of a contract; (iii) fails to provide an acknowledgement to the consumer that includes the auto-renewal terms and cancellation policy; or (iv) fails to provide a disclosure following the offer of a free gift or service that allows the consumer to cancel before paying for the goods or services. Among other things, the act also provides that consumers who accept an auto-renewal “shall be allowed to terminate the automatic renewal or continuous service exclusively online.” The act further stipulates that a “knowing violation” will be punishable by a civil penalty of not more than $500 for a single violation and not more than $1,000 for multiple violations as a result of a single act or incident. The act also outlines exempt entities, which include entities regulated by NYDFS, and “banks, bank holding companies, or the subsidiary or affiliate of either, or credit unions or other financial institutions, licensed under state or federal law.” The act will take effect 90 days after it was signed.

    State Issues State Legislation Consumer Finance Contracts

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  • Texas Office of Consumer Credit updates guidance urging property tax lenders to work with borrowers

    State Issues

    On November 16, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging property tax lenders to work with consumers during the Covid-19 crisis (previously discussed herehere, and here) Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through December 31, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Licensing Repossession ESIGN

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  • Texas Office of Consumer Credit updates guidance urging credit access businesses to work with borrowers

    State Issues

    On November 16, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging credit access businesses to work with consumers during the Covid-19 crisis (previously covered hereherehere, and here). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through December 31, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Licensing

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  • Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers

    State Issues

    On November 16, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging motor vehicle sales finance licensees to work with consumers during the Covid-19 crisis (previously covered hereherehereherehere, and here). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through December 31, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Auto Finance Licensing

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  • Texas Office of Consumer Credit updates guidance for regulated lenders

    State Issues

    On November 16, the Texas Office of the Consumer Credit Commissioner issued updated guidance (previously covered here,  herehere, and here) for regulated lenders relating to the Covid-19 crisis. The guidance: (1) encourages lenders to work with consumers, including by working out modifications to assist with payments, and reviewing policies for fees, late charges, delinquency practices, and repossessions, among other things; (2) reminds lenders of legal requirements for using electronic signatures; and (3) permits lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions.  The guidance is in effect through December 31, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit

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  • Illinois governor suspends consumer garnishment and wage deductions

    State Issues

    On November 13, the Illinois governor re-issued over 30 previous Covid-related executive orders that had previously been suspended. Of note, Executive Order 2020-55, which suspended portions of the Illinois Code of Civil procedure permitting service of a garnishment summons, wage deduction summons or a citation to discover assets on a consumer debtor, was reissued in its entirety and extended through December 12, 2020.

    State Issues Covid-19 Illinois Consumer Finance Debt Collection

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  • New York requires financial institutions to provide written notice prior to charging account inactivity fees

    State Issues

    On November 11, the New York governor signed S4188, which requires financial institutions to provide written notice to an account holder 30 days prior to charging any fee based on account inactivity. The provision applies to financial institutions as well as mortgage brokers, mortgage bankers, or other investment entities, “whether headquartered within or outside the state.” E-mail notifications will also satisfy the written notice requirement. The act will take effect 90 days after it was signed.

    State Issues State Legislation Consumer Finance Fees

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  • Rhode Island Division of Banking issues guidance on workplace practices to mitigate spread of Covid-19

    State Issues

    On November 6, the Rhode Island Department of Business Regulation, Division of Banking issued Banking Bulletin 2020-6 announcing certain standards for personnel and office operations that it encourages financial institutions to implement to mitigate further spread of Covid-19. These standards include, among others, guidelines for employee mask-wearing and congregation, and arrangement of office furniture to encourage social distancing.

    State Issues Covid-19 Rhode Island Financial Institutions Bank Regulatory

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