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In light of widespread interruptions created by the Covid-19 emergency, the Rhode Island Division of Banking extended the due date for debt collectors, small loan lenders, and debt management companies to submit 2020 Rhode Island Annual Reports to April 30, 2020. Extensions beyond that date will be considered on a case-by-case basis.
Oregon published a website that includes FAQs addressing Covid-19 insurance and financial services information for consumers. The website addresses questions regarding, among other things, making mortgage payments and addressing concerns about keeping money in checking or savings accounts during the Covid-19 outbreak. In addition, the responses to the FAQs indicate that the Division of Financial Regulation is encouraging its regulated lenders and financial service providers to take active measures to provide help to people and businesses affected by the pandemic, including offering loan forbearance plans, fee waivers, and other deferred payment options to their customers.
The Commissioner of the Oklahoma State Banking Department issued FAQs as a supplement to FAQs issued earlier by the FDIC. The FAQs address: (i) working with borrowers, and appropriately documenting the credit file; (ii) closing a lobby but maintaining drive through service; (iii) access to safe deposit boxes; (iv) conducting board meetings remotely, and (v) bank examinations.
Special Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to easily obtain temporary forbearances. The act also provides certain limited regulated relief for banks and credit unions.
This Special Alert summarizes the provisions providing relief to borrowers with federal student loans and the provisions of Title IV that dictate the manner in which servicers and collectors report borrowers to consumer reporting bureaus; provide forbearance, foreclosure, and eviction relief throughout the housing market; and provide limited regulatory relief to depository institutions.
Buckley issued a separate Special Alert on the Small Business Administration-related provisions contained in Title I of the act and will be covering separately the new Special Inspector General’s office created by the act, False Claims Act considerations, and other liability risks that we expect to arise.
On March 27, the CFPB’s Taskforce on Federal Consumer Financial Law issued a request for information (RFI) seeking input on consumer protection areas for the taskforce to focus its research and analysis, and requesting suggestions for “harmonizing, modernizing, and updating the federal consumer financial laws.” Specifically, the taskforce seeks information on “fair, transparent, and competitive” consumer financial service areas that are currently functioning well, as well as areas that may benefit from regulatory improvements to “facilitate competition and materially increase consumer welfare.” Areas of interest include: (i) automobile financing; (ii) consumer credit and reporting; (iii) debt collection and settlements; (iv) deposit accounts, electronic payments, money transfers, and prepaid cards; (v) mortgage origination and servicing; (vi) small-dollar lending; and (vii) student lending and servicing. Responses are due 60 days after the RFI is published in the Federal Register.
Illinois Department of Financial and Professional Regulation issues notice to consumer credit licensees
On March 30, the Illinois Department of Financial and Professional Regulation (Department) issued a notice to consumer credit licensees stating that it appreciates advance notice of any changes to the licensee’s usual business practices. Licensees are expected to “act responsively and proactively to address any consumer harm that may arise,” including through waiving defaults where a consumer is unable to make a payment as a result of the licensee’s business practices. New credit transactions originated during Covid-19 will be evaluated as part of the next examination cycle.
The Minnesota Commerce Department released a statement encouraging financial institutions to work with customers affected by Covid-19. In particular, the Department encourages institutions to take various actions, including: waiving fees such as ATM, overdraft, and late fees; increasing ATM daily cash withdrawal limits; easing restrictions on cashing checks; increasing credit card limits for creditworthy borrowers; offering payment accommodations like forbearances; and easing terms for new loans to affected borrowers. Separately, the Department affirmed that it will consider these circumstances when reviewing an institution’s financial condition, and in working with institutions that encounter difficulty meeting regulatory reporting requirements or filing requirements for financial statements.
On its website, the Nebraska Department of Banking and Finance (Department) published a Request for Proclamation to Authorize Office Closure form. If a financial institution decides to close any or all of its offices for an emergency, it must notify the Department. If the closure will last longer than 48 hours, the financial institution must receive Department approval. Financial institutions are instructed to submit the form to the Department via e-mail to the institution’s review examiner, and the Department will respond as soon as possible.
On March 27, Maryland’s Commissioner of Financial Regulation issued an industry advisory with guidance regarding consumer credit for borrowers impacted by Covid-19. The guidance warns licensees against using the health crisis as an opportunity to increase fees or interest rates and instructs them to keep applicants and clients informed of disruptions or delays in credit decisions or changes to times and methods of communication. The advisory also “strongly urges” licensees to takes steps to mitigate the health crisis by, among other things: waiving late fees and online and telephone payment fees; foregoing credit reporting or reporting payment information in a manner that minimizes negative impact on credit histories; offering modification, forbearance or other options to allow borrowers to reduce or defer payments; ensuring that borrowers are able to timely make inquiries and manage their accounts; reaching out to borrowers proactively to provide information on available assistance; and ensuring that all borrower-facing staff are fully informed regarding available assistance and proactive in informing borrowers. Licensees are reminded to comply with applicable Maryland law, including all fair lending requirements, and to retain appropriate documentation to support decisions regarding mitigation offers.
On March 27, the CFPB issued guidance on the student loan provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Pursuant to the Act, borrowers with federally held student loans will automatically have their loan principal and interest payments paused until September 30. Borrowers do not need to take any action to have their payments suspended and interest will not accrue during this period. The CFPB also provided additional guidance on the impact on privately held student loans and federal loans held by commercial lenders, and provided information to help borrowers avoid student loan debt relief scams.
- Hank Asbill to discuss "Critique of direct examination; Questions and answers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Hank Asbill to discuss "What judges want from trial lawyers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Benjamin W. Hutten to discuss "Understanding OFAC sanctions" at a NAFCU webinar
- Warren W. Traiger to discuss "Key takeaways from proposed CRA modernization" at the New York Bankers Association Technology, Compliance & Risk Management Forum
- Garylene D. Javier to discuss "Navigating workplace culture in 2020" at the DC Bar Conference