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  • Connecticut amends its Money Transmission Act

    State Issues

    On June 6, Connecticut enacted HB 5211 (the “Act”), amending laws regulating virtual currency and money transmission. The Act updated "permissible investment" to include additional forms of assets and clarified that “cash” will include demand deposits and cash equivalents, such as international wires in transit to the payee, transmission receivables funded by debit cards or credit cards, and AAA-rated mutual funds. The Act also stated that after October 1, 2024, the owning, operating, solicitation, marketing, advertising, or facilitation of virtual currency kiosks will be considered to “money transmission” business and thus will require persons to be state licensed as a money transmitter.

    Additionally, the Act will require money transmission licensees to maintain a detailed accounting plan on winding down operations, as well as meet certain conditions to terminate a licensee’s businesses. Furthermore, the Act will require licensees to communicate third party disclosure information to consumers, as well as provide a physical receipt for transactions to senders. The Act also expanded the banking commissioner’s authority to adopt forms and orders governing digital assets to expressly include nonfungible tokens.

    State Issues Money Service / Money Transmitters Connecticut State Legislation Consumer Protection Cryptocurrency

  • Connecticut amends its Money Transmission Act

    State Issues

    On June 6, Connecticut enacted HB 5211 (the “Act”), amending laws regulating virtual currency and money transmission. The Act updated "permissible investment" to include additional forms of assets and clarified that “cash” will include demand deposits and cash equivalents, such as international wires in transit to the payee, transmission receivables funded by debit cards or credit cards, and AAA-rated mutual funds. The Act also stated that after October 1, the owning, operating, solicitation, marketing, advertising, or facilitation of virtual currency kiosks will be considered to “money transmission” business and thus will require persons to be state licensed as a money transmitter.

    Additionally, the Act will require money transmission licensees to maintain a detailed accounting plan on winding down operations, as well as meet certain conditions to terminate a licensee’s businesses. Furthermore, the Act will require licensees to communicate third party disclosure information to consumers, as well as provide a physical receipt for transactions to senders. The Act also expanded the banking commissioner’s authority to adopt forms and orders governing digital assets to expressly include nonfungible tokens. 

    State Issues State Legislation Money Service / Money Transmitters Cryptocurrency Consumer Protection

  • New York Attorney General sues crypto companies, alleging billion-dollar pyramid scheme targeting immigrant communities

    State Issues

    On June 6, New York Attorney General Letitia James announced legal actions against two companies (with the same founders) for allegedly participating in illegal pyramid schemes. The complaint alleged these schemes defrauded hundreds of thousands of investors, including more than 11,000 New Yorkers, out of more than a billion dollars in crypto-assets. The AG alleged that the companies’ activities specifically preyed upon immigrant communities, notably New Yorkers of Haitian descent, using prayer groups and digital communication channels like social media to make false promises of high returns.

    According to the complaint, one of the companies offered fraudulent returns from mining cryptocurrency, but never delivered on the promised profits and bonuses, eventually collapsing in 2019. The complaint then alleged the promoters of the collapsed company founded a new company that also promised high returns and bonuses.  According to the complaint, from 2019 to 2023, investors deposited more than $1 billion worth of cryptocurrency into the new company, yet a minuscule fraction (less than $26 million) was actually used for trading on the company’s platform before its collapse in May 2023.

    The Attorney General’s legal action will seek a permanent ban on the company and the associated individuals from conducting any securities or commodities business within New York and disgorgement and damages for the victims.

    State Issues State Attorney General Cryptocurrency Fraud Martin Act New York

  • Colorado tightens regulations related to debt settlement and collection practices

    State Issues

    On June 6, the Governor of Colorado signed into law HB 1380 (the “Act”) which revised the state’s consumer protection laws related to debt collection, credit services organizations, and debt management service providers. Key provisions of the law included:

    • Debt collectors must now include their name and the original creditor’s name in legal actions against consumers and possess full authority to settle the debt.
    • Credit services organizations will be required to provide the state administrator with essential business information (including name and address) and pay an annual notification fee.
    • The state administrator can issue cease-and-desist orders and impose penalties of up to $1,500 per violation of the Code.
    • Debt-management service providers cannot provide their services to consumers unless they have prepared a debt management plan for the individual that, among other things, lists all the creditors that the service provider expects to participate, and not to participate, in the plan, as well as those that it expects to participate but will not grant concessions to the consumer.
    • Providing the state administrator the ability to adopt rules regarding debt settlement service fees by March 1, 2025, provided the rules do not “unduly limit consumer access to debt management services programs based on available state and national data.”

    The Act’s amendments will go into effect 91 days following final adjournment of the General Assembly, subject to approval by Colorado voters if a referendum would be filed.

    State Issues Colorado Debt Collection State Legislation Consumer Finance

  • Connecticut amends provisions of its Emergency Mortgage Assistance Payment program

    State Issues

    On May 28, the Governor of Connecticut signed SB 283 (the “Act”) into law, introducing amendments to the Connecticut Housing Finance Authority’s (CHFA) Emergency Mortgage Assistance Payment (EMAP) program. This law will extend benefits to homeowners who are in foreclosure and forbearance. Under the new legislation, homeowners must enter into a repayment agreement directly with the CHFA, which will now receive the monthly payments previously made to the loan originator.

    The Act will modify the criteria for financial hardship eligibility, remove utility and heating expenses from the total housing expense calculation, and grant the CHFA authority to factor in equity in determining a homeowner’s ability to repay timely. Additionally, the CHFA will provide greater flexibility regarding the repayment agreement terms, along with several other amendments. The Act’s provisions will go into effect on October 1.

    State Issues State Legislation Mortgages Connecticut

  • Georgia bans CBDCs for government use

    State Issues

    Recently, Georgia enacted HB 1053 (the “Act”) which will prohibit government agencies from engaging with central bank digital currencies (CBDCs). Specifically, the legislation will prevent state government agencies from accepting CBDCs as a form of payment or from participating in any pilot programs involving CBDCs. Georgia representatives banned CBDCs within government operations citing potential “privacy and security concerns” for individuals and businesses, called them an “unacceptable expansion” of federal authority, and were concerned that a CBDC could disrupt the current banking systems and “diminish” community bank and credit unions’ roles in the financial system. The ban will go into effect on July 1.

    State Issues State Legislation Georgia CBDC Privacy Digital Currency Central Bank Digital Currency

  • New Jersey proposes disparate impact discrimination rule

    State Issues

    On June 3, New Jersey Attorney General, Matthew Platkin, and the state’s Division on Civil Rights announced a proposed rule that described and clarified prohibitions against disparate impact discrimination under the New Jersey Law Against Discrimination (LAD), including employment, housing, places of public accommodation, credit, and contracting. The proposed rule provided examples of policies and practices that may result in a disparate impact on members of a protected class under the LAD.

    The proposed rule aimed to clarify that the LAD outlawed practices or policies that have an adverse impact on members of a protected class, regardless of whether there was intent to discriminate. Such practices or policies were only permissible if they were necessary to attain an important and legitimate non-discriminatory goal and there was no alternative method that was less discriminatory and equally effective in achieving that goal. The rule would codify largely the existing legal standard and burdens of proof used in New Jersey and Federal courts when reviewing claims of disparate impact discrimination pursuant to the LAD for determining whether a practice or policy was discriminatory unlawfully, along with the framework used in evaluating claims of disparate impact. Comments on the proposed rule must be received by August 2.

    State Issues New Jersey State Attorney General Discrimination

  • Colorado extends its money transmitter regulations

    State Issues

    On June 3, Colorado enacted HB 1328, (the “Act”), which will extend the state’s regulation of money transmitters until September 2030. The law had previously been scheduled to sunset on September 1. The Act will implement the recommendations of the Department of Regulatory Agencies, as specified in the Department's sunset review of the regulation of money transmitters. Specifically, the Act will (i) authorize the State Banking Board to suspend a money transmitter’s license and issue cease and desist orders; (ii) expand the requirement to furnish surety bond coverage to include all money transmission, rather than any exchange; (iii) increase the maximum penalty for failure to allow an examination from $100 to $1,000 per day the refusal continues and for failure to report up to $750 per day; and (iv) expand the licensing exemption to cover out-of-state banks. The Act will go into effect 90 days following the adjournment of the General Assembly, assuming a referendum petition will not be filed. 

    State Issues State Legislation Colorado Money Service / Money Transmitters Licensing Fintech Enforcement

  • Michigan requires annual reporting on payday lending from director

    State Issues

    On May 22, Michigan enacted HB 4343 (the “Act”) to include new reporting requirements regarding payday lending for the director or the Michigan Department of Insurance and Financial Services (the Department). By October 31 of each year, from 2025 to 2031, the director of the Department must submit a report to the relevant senate and house committees tasked with the oversight of banking and financial services issues. The report must cover various aspects of the payday lending business in the state, including the number of licensed providers, program fees received by the Department, and local and statewide statistics on provider locations, transaction volumes and amounts, and customer usage patterns. The Act will require the Department to include the names and addresses of all licensees, the number of complaints filed against both licensees and non-licensees arising from transactions conducted in the state, and any additional information deemed relevant by the director. According to the Act, the purpose of this reporting will be to enforce and regulate the payday lending industry. The Act will go into effect after the 91st day after the final adjournment of the 2024 regular session.

    State Issues Michigan Payday Lending State Legislation

  • NYDFS issues loss mitigation guidance for property insurance

    State Issues

    On May 23, NYDFS issued Insurance Circular Letter No. 3 (2024) which encouraged all insurers – authorized to write property/casualty insurance in New York – to offer loss mitigation tools and services to the insured for free or at a reduced fee. Insurers are encouraged to offer devices like smart water monitors and provide discounts for the installation of loss prevention systems, such as smoke alarms and sprinkler systems. Additionally, the letter reminded insurers of their obligation to provide an actuarially appropriate reduction in rates for the installation of hurricane/storm shutters and hurricane-resistant windows and doors. It opined that any such tools or services offered by an insurer that are $25 or less in market value need not be specified in the insurance policy, while those exceeding $25 must be. This initiative, the letter stated, will aim to create a more affordable and resilient insurance market.

    State Issues NYDFS New York Loss Mitigation Insurance

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