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On August 25, the Illinois governor signed into law HB 0806, which amends the Illinois Real Estate Appraiser Licensing Act (the Act), among other things, to include provisions regarding that all applicants and licensees under the Act shall provide a valid address and email address to the Department of Financial and Professional Regulation and creates provisions regarding: (i) inactive licenses; (ii) citations; and (iii) illegal discrimination. Specifically, the bill changes provisions concerning license necessity, use of title, and exemptions stating that, “[i]t is unlawful for any person, including any entity, to act or assume to act as a home inspector, to engage in the business of home inspection, to develop a home inspection report, to practice as a home inspector, or to advertise or hold oneself out to be a home inspector without a home inspector license issued under this Act.” The bill also changes provisions regarding applications for a(n) (i) state certified general real estate appraiser, (ii) state certified residential real estate appraiser, and (iii) associate real estate trainee appraiser, in addition to the duration of application and renewal of license, among other things. This bill is effective January 1, 2022, except for the provisions amending the Regulatory Sunset Act.
On September 2, New York’s Governor Hochul extended the moratorium on Covid-19-related residential and commercial evictions until January 15, 2022. According to the announcement, “all protections of the Tenant Safe Harbor Act for residential tenants who are suffering financial hardship as a result of the pandemic will remain in place, along with new protections on commercial evictions.” For our previous coverage regarding the eviction moratorium, see here.
The new law also: (i) creates a $25 million fund to provide legal services to tenants facing eviction proceedings and to aid them in maintaining housing stability in areas of New York where there is not access to free legal assistance for such services; and (ii) establishes a $250 million Supplemental Emergency Rental Assistance program to serve additional households and to better support landlords
On August 20, the New York governor signed S1465, which requires New York-chartered banks to either process checks in the order they are received or from the smallest to largest dollar amount for each business day’s transactions in order to help curb overdraft fees. The act also provides that while banks may dishonor checks for insufficient funds, they must make payments on any subsequent smaller transactions that may be covered by funds in the account. Under current law, if a check is presented that exceeds the available funds, the check is dishonored, as are all subsequent checks received by the bank, even if the account has sufficient funds to honor one or more of the smaller, subsequent checks. Banks are also required to disclose in writing to consumers the order in which checks are drawn at the time an account is opened and before any change is made to such policy. The act takes effect January 1.
On August 13, the Illinois governor signed SB 1561, which amends the Illinois Human Rights Act to include provisions regarding third-party loan modification service providers. According to the bill, it is a civil rights violation for a third-party loan modification service provider because of unlawful discrimination, familial status, or an arrest record, to (i) refuse to engage in loan modification services or to discriminate in making such services available; or (ii) alter the terms, conditions, or privileges of such services. The bill also clarifies that a third-party loan modification service provider is a person or entity, licensed or unlicensed, that “provides assistance or services to a loan borrower to obtain a modification to a term of an existing real estate loan or to obtain foreclosure relief,” but does not include lenders, brokers or appraisers of mortgage loans, or the servicers, subsidiaries, affiliates, or agents of the lender. Among other things, the bill provides that, in relation to real estate transactions, the failure of the Department to notify a complainant or respondent in writing for not completing an investigation on the allegations set forth in a charge within 100 days shall not deprive the Department of jurisdiction over the charge. This bill is effective January 1, 2022.
On August 6, the California Department of Financial Protection and Innovation (DFPI) issued a notice of proposed rulemaking (NPRM) to amend certain codes under the California Code of Regulations and to implement the Pilot Program for Increased Access to Responsible Small Dollar Loans (Pilot Program). The Pilot Program is administered by DFPI and established under the California Financing Law (covered by a Buckley Special Alert here). According to DFPI, the proposed regulations implement SB 235, “which authorizes a finder, defined as an entity that brings together a licensed lender and prospective borrower to negotiate a contract, to perform additional services on behalf of a lender,” and AB 237 “which, among other things, increases the upper dollar limit for a permissible Pilot Program loan from $2,500 to $7,500 and requires participating lenders to conduct reasonable background checks on finders.” The proposal would amend regulations of DFPI’s Pilot Program by, among other things: (i) revising general information and instructions to forms; (ii) increasing the upper limit from $2,500 to $7,500 on the amount of a permissible loan; (iii) “requir[ing] Pilot Program applicants to submit the policies and procedures they must maintain to address customer complaints and respond to questions raised by loan applicants and borrowers, including questions about finders”; (iv) permitting finders to disburse funds on behalf of lenders, collecting loan payments from borrowers, and issuing notices and disclosures to borrowers or perspective borrowers; and (v) removing a provision that prohibits finders from discussing marketing materials or loan documents with a borrower or prospective borrower.
On July 27, the Oregon governor signed SB 485, which outlines licensing provisions for student loan servicers and implements consumer protections for borrowers. Among other things, the act requires, subject to certain exemptions, persons servicing student loans to obtain a license from the Oregon Department of Consumer and Business Services (DCBS). Should the director reasonably believe that a person subject to the act’s provisions is “engaging in or is about to engage in an act or practice that constitutes servicing a student loan in this state without first obtaining a license” the director may order the person to cease and desist, affirmatively perform the act, or may apply to an Oregon circuit court to enjoin the person from engaging in such act or practice. Additionally, the act outlines requirements related to, among other things, (i) licensing applications, including that the director may require applicants to submit applications to the Nationwide Multistate Licensing System instead of, or in addition to, submitting the application to the director; (ii) licensing renewals, reinstatements, and surrenders; (iii) a licensee’s principal place of business; (iv) liquidity standards; and (v) branch closures, relocations, or the opening of new locations. Under the act, the director is also granted general supervisory authority over each licensee in the state, examination authority, and the ability to participate in multistate examinations scheduled and conducted by the Conference of State Bank Supervisors or the CFPB. The director may also investigate borrower complaints and servicers’ policies and procedures, may impose civil penalties for violations of the act’s provisions, and may promulgate rules and take any other actions necessary to undertake and exercise the duties and powers conferred on the position. The act also outlines provisions related to servicing obligations, prohibits student loan servicers from engaging in fraudulent, deceptive, and dishonest activities, and creates a student loan ombudsperson at DCBS to handle complaints against student loan servicers and educate borrowers about loan repayment options. The act took effect on its passage.
On July 7, the Connecticut governor signed SB 848, which, among other things, amends certain mortgage licensing provisions in the state’s banking statutes. Amendments include defining “residential mortgage loan” to include a “shared appreciation agreement” which is defined as “a nonrecourse obligation in which an advance sum of monetary value is extended to a consumer, as a lump sum or otherwise, in exchange for an equity interest in a dwelling, residential real estate or a future obligation to repay a sum upon the occurrence of an event, including, but not limited to, the transfer of ownership, repayment maturity date, death of the consumer or as outlined and explicitly agreed to within said agreement.” Amendments also include defining an “out-of-state mortgage loan originator” as “an individual who maintains a unique identifier through the system and holds a valid mortgage loan originator license issued pursuant to the laws of any state other than this state.” Additionally, effective October 1, all individuals must “obtain a mortgage loan originator license prior to conducting such business unless such individual does not engage directly in the activities of a mortgage loan originator or conducts such business pursuant to the temporary authority provided in subsection (e).”
New Subsection (e) provides that individuals employed by a person licensed as a mortgage lender, mortgage correspondent lender, or mortgage broker in the state will be granted temporary authority to act as a mortgage loan originator in the state for the certain period of time, provided the individual meets certain specified criteria, including that the individual has not had a loan originator licensing application denied, has not had a loan originator license revoked or suspended, has not been subject to, or served with, a cease and desist order in any governmental jurisdiction or by the CFPB, has not been convicted of a misdemeanor or felony that would preclude licensure in this state, and was registered in the system as a registered loan originator during the one-year period immediately preceding the date on which the individual submitted an application and supporting materials. Temporary licenses will remain effective until a determination is made on the status of a permanent license, and temporarily licensed individuals will “be subject to the laws of this state to the same extent as if the individual is licensed as a mortgage loan originator in this state.” The amendments are effective October 1.
On July 7, the Connecticut governor signed SB 890, which requires student loan servicers of federal student loans to register with the Department of Banking commissioner and comply with various state requirements and consumer protection mandates. The act now requires, subject to certain exemptions, entities servicing federal student loans (directly or indirectly) to obtain a license from the commissioner. Private student loan servicers are also still required to obtain licenses from the commissioner, and no licensee or registrant will be permitted to use any name other than its legal name or a fictitious name approved by the commissioner. Among other things, the act’s amendments provide new definitions and outline servicer duties, responsibilities, and prohibitions. Additionally, the amendments grant the commissioner the authority to impose civil penalties for violations of the act’s provisions after providing notice and an opportunity for hearing, and permits the commissioner to “suspend, revoke or refuse to renew any registration filed pursuant to section 3 of this act if any fact or condition exists which, if it had existed at the time of filing for registration, would have precluded eligibility for such registration.” The amendments took effect July 1.
On June 29, the Colorado governor signed SB21-057, which expands the Colorado Student Loan Servicers Act by adding new provisions covering private lenders, creditors, and collection agencies connected to postsecondary non-federal student loans. The act adds “Part 2” to the Colorado Revised Statutes, which, among other things, provides new definitions and stipulates that on or after September 1, lenders may not offer or make a private education loan to a state resident without first registering with the administrator and then annually providing specific loan data and contact information. Additionally, the act (i) outlines cosigner disclosure requirements and specifies that private education lenders are required to grant a release to cosigners provided certain conditions are met; (ii) provides that if a cosigner dies, the lender will not attempt to collect against the cosigner’s estate except for payment default; (iii) expands disability discharge requirements so that a borrower or cosigner may be released from payment obligations if permanently disabled; (iv) requires lenders to provide additional disclosures related to loans that will be used to refinance an existing loan; (v) outlines prohibited conduct concerning unfair, deceptive, or abusive acts or practices, such as placing a loan into default or accelerating a loan while a borrower is seeking a loan modification or enrolling in a flexible repayment plan; (vi) discusses debt collection prerequisites; and (vii) allows borrowers to bring a private right of action, including a counterclaim, against a lender or collection agency to recover or obtain actual damages or $500 (whichever is greater), restitution, punitive damages, injunctive relief, credit report corrections, attorney fees and costs, among others. Additionally, if it is proven that a lender or a collection agency has provided false information, the court will award the borrower the greater of treble damages or $1,500. Moreover, a violation of Part 2 is defined as a deceptive trade practice. Lenders or collection agencies that fail to comply with the outlined provisions will be liable for, among other things, actual damages sustained by a borrower or cosigner, as well as a monetary award equal to three times the total amount collected from the borrower in violation of Part 2. The act takes effect immediately.
On July 13, the Connecticut governor signed SB 716 to provide additional protections for student loan borrowers and impose new requirements on student loan servicers. Among other things, the act requires servicers to provide certain information to borrowers and cosigners regarding their rights and responsibilities, including cosigner release eligibility and the cosigner release application process. The law also prohibits a student loan servicer from engaging in an abusive act or practice when servicing a student loan and expands the definition of “servicing” in state student loan servicer law. The law provides a list of exempt persons, which includes banks and credit unions and their wholly-owned subsidiaries. The act states it took effect July 1.
- Jonice Gray Tucker to discuss “Updates on Artificial Intelligence Regulations - the U.S. and EU” at the American Bar Association Busines Law Section Meeting
- Jonice Gray Tucker to discuss “Government investigations, and compliance 2021 trends” at the Corporate Counsel Women of Color Career Strategies Conference
- APPROVED Webcast: California debt collection license requirement: Overview and analysis
- Max Bonici to discuss “BSA/AML trends: What to expect with the implementation of the AML Act of 2020” at the American Bar Association Banking Law Fall Meeting
- Jeffrey P. Naimon to discuss “Regulators are gearing up: Are you ready?” at HousingWire Annual
- Amanda R. Lawrence and Elizabeth E. McGinn discuss “U.S. state privacy legislation – Are you compliant?” at the Privacy+Security Forum
- H Joshua Kotin to discuss “Modifications and exiting forbearance” at the National Association of Federal Credit Unions Regulatory Compliance Seminar
- Jonice Gray Tucker and Kari K. Hall to discuss “Consumer Protection Priorities in the Biden Administration and Beyond" at the SWABC and TBA 2021 Legal Conference
- Jonice Gray Tucker to discuss “Fintech trends” at the BIHC Network Elevating Black Excellence Regional Summit
- Jeffrey P. Naimon to discuss "Truth in lending” at the American Bar Association National Institute on Consumer Financial Services Basics
- John R. Coleman and Amanda R. Lawrence to discuss “Consumer financial services government enforcement actions – The CFPB and beyond” at the Government Investigations & Civil Litigation Institute Annual Meeting
- Jonice Gray Tucker to discuss "Consumer financial services" at the Practising Law Institute Banking Law Institute
- Jonice Gray Tucker to discuss “Regulators always ring twice: Responding to a government request” at ALM Legalweek