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Financial Services Law Insights and Observations


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  • Michigan regulator encourages financial institutions to avoid offsetting CARES Act stimulus payments

    State Issues

    On May 14, the Michigan Department of Insurance and Financial Services issued a bulletin “strongly” urging Michigan financial institutions not to access CARES Act stimulus payments to satisfy overdrafts or to exercise any right of offset against the funds without the agreement of the customer or member. The regulator also “strongly” urged financial institutions not to use CARES Act stimulus payments for ATM, late payment, overdraft, or other fees.

    State Issues Covid-19 Michigan CARES Act Bank Compliance ATM Overdraft

  • Colorado issues guidance to critical financial institutions

    State Issues

    On May 12, Colorado issued additional guidance to critical financial institutions during the Safer at Home for Public Health Order 20-28. The guidance clarifies that financial and professional institutions are considered “Critical Business/Critical Service” under the public health order. It also provides responses to frequently asked questions, including how to follow guidance at the city, county, and state level, whether banks and credit union branches are considered “Critical Retailers,” the requirements for monitoring employee health, and cleaning procedures at the financial institutions’ facilities.

    State Issues Covid-19 Colorado Bank Compliance Credit Union

  • OCC issues guidance about health-related changes to annual meetings

    Federal Issues

    On May 12, the Office of the Comptroller of the Currency issued guidance for national banks and federal savings associations that are considering changing the date, time, or location of their annual meetings as a result of stay-at-home orders or other health concerns. The OCC clarified that, for national banks, the requirement to hold an annual meeting is governed by state laws and the bank’s governing documents. OCC regulations require federal savings associations to hold annual meetings within 150 days after the end of the fiscal year and to incorporate the time frame for conducting the meeting into their bylaws. Although federal savings associations must receive OCC approval to amend their bylaws to incorporate a longer time frame, the OCC will deem such an amendment as approved and effective if it meets the conditions set out in the guidance. The OCC also strongly encourages all banks to use electronic methods for submitting licensing filings during the COVID-19 emergency.

    Federal Issues Covid-19 OCC Bank Compliance Licensing

  • Arkansas Insurance Department rescinds several Covid-19-related bulletins

    State Issues

    On May 11, the Arkansas Insurance Department issued a bulletin announcing the rescission of certain Covid-19 related bulletins issued under Executive Order 20-03. Among others, Bulletin 16-2020 regarding the suspension of title insurance audits and Bulletin 18-2020 regarding Covid-19 financial regulatory compliance, are suspended as of May 11, 2020.

    State Issues Covid-19 Arkansas Insurance Bank Compliance

  • Michigan regulator issues guidance for financial services sector to comply with stay at home orders

    State Issues

    On May 6, the director of Michigan’s Department of Insurance and Financial Services issued Bulletin 2020-23-BT/CF/CU to provide guidance to the financial services industry on compliance with the governor’s stay at home orders. The bulletin reiterates that work by the financial services sector should be done remotely to the fullest extent possible and businesses should take other mitigating measures for non-remote workers. It also clarifies that workers in the real estate industry, as opposed to mortgage companies, are not critical infrastructure workers, and should refer to guidance by the Michigan Department of Licensing and Regulatory Affairs.

    State Issues Covid-19 Michigan Bank Compliance Real Estate Mortgages

  • Federal Reserve issues guidance regarding flood insurance compliance

    Federal Issues

    On May 6, the Federal Reserve issued guidance to state member banks regarding flood insurance compliance in response to Covid-19. The guidance responds to a question regarding the extension of maturities/payments or balloon payments due to Covid-19 as well as a question about the impact of FEMA Bulletin W-20002 on force placement requirements under the Flood Disaster Protection Act and the implementing regulation.

    Federal Issues Covid-19 Federal Reserve Flood Insurance Bank Compliance Mortgages

  • Illinois Department of Financial and Professional Regulation issues guidance to credit unions regarding deferral of an appraisal or written estimate of market value

    State Issues

    On May 1, the Illinois Department of Financial and Professional Regulation issued guidance to credit unions regarding the deferral of an appraisal or written estimate of market value to allow credit unions to continue to extend loans to households and businesses during the Covid-19 crisis. The guidance notes that the National Credit Union Administration (NCUA) Board promulgated an interim final rule allowing a federal credit union to temporarily defer certain appraisals and written estimates of market value for up to 120 days after closing when other alternatives are not available and when the appraisal or evaluation would delay the closing of the transaction, and states its intention to promulgate a substantially similar rule. Until the rule has been promulgated and finalized, the department does not intend to take adverse supervisory or enforcement action against an Illinois state-chartered credit union for deferring the appraisal or written estimate of market value for appropriate transactions up to 120 days from the date of closing, subject to certain exceptions. The guidance provides additional requirements for credit unions to follow when seeking to take advantage of this exemption.

    State Issues Covid-19 Illinois Credit Union NCUA Appraisal Bank Compliance

  • OCC and Federal Reserve issue joint response to question regarding market risk capital rule

    Federal Issues

    On May 1, the OCC and the Federal Reserve Board issued a joint response to a public question about a capital implication under the market risk capital rule in light of current market conditions arising from the Covid-19 pandemic. The joint response notes that, in March and April of 2020, the agencies took supervisory action giving certain banks the option to apply the multiplication factor that applied as of December 31, 2019, rather than applying a higher multiplier based on the most recent exceptions.

    Federal Issues Covid-19 OCC Federal Reserve Bank Compliance

  • Illinois extends closure of nonessential businesses

    State Issues

    On April 30, the governor of Illinois issued an executive order that continues a previous stay at home order. The order requires nonessential businesses activities and operations to cease, with limited exceptions, such as operating exclusively through employees working at their own residences. Essential businesses may remain open, but are required to evaluate whether employees can work from home, and are required to comply with social distancing and other health-related requirements while operating. A wide range of financial institutions and their affiliates are considered essential businesses. The order took effect on March 1.

    State Issues Covid-19 Illinois Bank Compliance

  • NCUA issues additional guidance on working with borrowers impacted by Covid-19

    Federal Issues

    On April 30, the National Credit Union Administration issued guidance describing strategies for working with negatively impacted borrowers while taking measures to limit the negative financial impact of those strategies on the credit union and its ability to serve all members. The guidance describes strategies for providing new funds to borrowers, temporary loan modifications, and permanent loan modifications. It also states that credit unions should maintain policies to manage the risks of workout strategies, including clearly defined eligibility criteria, aggregate program limits, and controls to ensure workout actions are structured appropriately.

    Federal Issues Covid-19 NCUA Credit Union Bank Compliance


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