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Recently, California’s Department of Financial Protection and Innovation (DFPI) released new opinion letters covering aspects of the Money Transmission Act (MTA) related to Bitcoin automated teller machines (ATMs). Each of the three letters (available here, here, and here), which contain slightly different fact patterns, explain that the Bitcoin ATMs described by the applicant companies are not subject to licensure under the MTA because they are not considered to be engaging in the business of money transmission. In each instance, the transaction would only be between the consumer using the kiosk and the company, the transaction would be completed instantly, and no third parties would be involved in the transmission of the Bitcoin to the customer’s virtual wallets. DFPI reminded each company that while it was not a subject of their inquiry, if they choose to offer virtual currency other than Bitcoin, they may have obligations under California’s broker-dealer laws to the extent that any of those virtual currencies are securities.
On September 15, the New Jersey Department of Banking and Insurance (Department) began accepting applications for the NJ Student Loan Servicer license through the NMLS. The license is governed by the Student Loan Servicing Act, which was enacted in July 2019, and establishes the Office of the Student Loan Ombudsman within the Department and provides licensing requirements for student loan servicers (covered by InfoBytes here). A recently released bulletin by the Department describes the process for licensing and details persons exempt from the licensing requirements, including federal or state chartered banks, savings banks, savings and loan associations, and credit unions, as well as their wholly owned subsidiaries. The Bulletin notes that all non-exempt student loan servicers must submit all requirements for a license by December 31 and may continue to operate in New Jersey while their applications are pending.
On April 23 and 21, nine states announced a multi-state initiative to provide student loan relief options for borrowers with privately held student loans not covered by the CARES Act. California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, and Washington outlined within their announcements specific measures for borrowers with commercially-owned Federal Family Education Loan Program loans and borrowers with private student loans who are struggling to make payments due to the Covid-19 pandemic. The announcements also noted that Virginia is participating in the initiative as well. These relief options, offered in conjunction with the listed private student loan servicers, include (i) a minimum 90-days of forbearance relief; (ii) a waiver of late fees; (iii) no negative credit reporting; (iv) a 90-day moratorium on collection lawsuits; and (v) enrollment in applicable borrower assistance programs, such as income-based repayment. The states cautioned that enrollment in these relief options is not automatic, and recommended borrowers contact their student loan servicer to see what options best suit their needs.
In addition, California, Colorado, Connecticut, New Jersey, Vermont, and Washington recommended that regulated student loan servicers with limited ability to take these actions due to investor restrictions or contractual obligations “should instead proactively work with loan holders whenever possible to relax those restrictions or obligations.”
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.
On March 30, the Texas Department of Banking, in conjunction with the Independent Bankers Association of Texas and the Texas Bankers Association, issued a set of recommendations for banks to consider as they develop business continuity plans during the Covid-19 crisis. The guidance specifically notes that the recommendations do not constitute required action.
Illinois Department of Financial and Professional Regulation issues notice to title insurance licensees and registered agents
On March 30, the Illinois Department of Financial and Professional Regulation (Department) issued a notice encouraging title insurance licensees and registered agents to provide the Department with advance notice of any changes to their usual business practices. If a registered agent application has been submitted, it will be processed as quickly as possible.
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, Colorado’s Division of Banks and Division of Financial Services distributed a document consolidating Covid-19 related guidance regarding inspections and appraisals from the Appraisal Standards Board, Fannie Mae, Freddie Mac, and the FDIC. Taken together, the agencies have issued guidance indicating that they will accept external-only or desktop inspections and appraisals in light of risks of conducting interior inspections during the Covid-19 outbreak.
On March 25, the Securities and Business Investments Division of the State of Connecticut Department of Banking issued interim guidance permitting paperless regulatory filings in light of the Covid-19 pandemic. The interim guidance permits and “highly encourage[s]” securities registration, exemption and covered security filers, as well as business opportunity registration filers, to submit regulatory filings and payments electronically. The Division also waived certain manual signature and notarization requirements.
On March 25, the Nebraska Department of Banking and Finance (Department) announced it will temporarily halt all regular examinations unless the examination is critical to safety and soundness, consumer protection, or is necessary to address an urgent or immediate need. If the Department already has a majority of the requested information, the institution may elect to move forward with the Department’s examination. The Department will reassess this approach on April 24 or when the emergency has ended, whichever is sooner.
- Hank Asbill to discuss "The federal fraud sentencing guidelines: It's time to stop the madness" at a New York Criminal Bar Association webinar
- Buckley Webcast: From there to here – Anticipating comparative redlining claims
- Daniel P Stipano to moderate "Digital identity: The next gen of CIP" at the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference
- Buckley Webcast: New sheriff in town – AML and sanctions under the new administration
- Tim Lange to discuss "Impact of Covid-19 on your business" at the California Mortgage Bankers Association Legal Issues & Regulatory Compliance Conference