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Virginia, North Dakota establish GAP waiver requirements
On March 21, the Virginia governor signed SB 1325, which provides a framework within which guaranteed asset protection (GAP) waivers may be offered in the state. Among other provisions, the act (i) clarifies that any cost to the borrower for the sale of a GAP waiver, in compliance with TILA, should not be considered a finance charge or interest; (ii) states that neither the extension of credit nor the sale or lease of a motor vehicle “may be conditioned upon the purchase of a GAP waiver;” (iii) requires creditors to comply with GAP waiver obligations; (iv) requires a GAP waiver to include disclosures regarding the cancellation of the GAP waiver during a free look period; and (v) establishes requirements and restrictions for GAP waiver cancellations, including refund provisions. The act also provides that GAP waivers are not insurance and are exempt from Virginia's licensing requirements. The act is effective July 1.
Separately, on March 20, the North Dakota governor signed HB 1181, which clarifies that GAP waivers effective on or after August 1 are not insurance and are exempt from the state’s insurance laws. Among other things, the act also (i) clarifies contractual liability coverage; (ii) outlines required disclosures that must be stipulated with the sale of a GAP waiver; and (iii) specifies GAP waiver cancellation conditions and refund provisions.
Three states amend appraisal management company requirements and definitions
On March 25, the Colorado governor signed SB 46, which amends the definition of an appraisal management companies (AMC) in sections of the Colorado Revised Statutes to align with the definition in federal law. The act, with the exception of section 3, takes effect immediately.
On March 19, the Arkansas governor signed SB 393, which amends the registration requirements for AMCs. Under the act, appraisers must hold a license in good standing in the state. Additionally, AMCs are required to (i) implement systems to verify independent appraisals; (ii) establish processes and controls to ensure engaged appraisers are qualified and independent of the transaction; and (iii) conduct appraisal management services in accordance with specified federal regulations in existence on January 1, 2019. The act takes effect 90 days after adjournment of the legislature.
Finally, on March 14, the North Dakota governor signed SB 2075, which amends the state’s code related to AMCs. The amendments clarify that “an individual who has had an appraiser license or certification in this state or in any other state refused, denied, canceled, revoked, or surrendered” may not own an AMC. The restriction also applies to entities owned by such individuals. The act takes effect on August 1.
North Dakota expands personal identifying information law
On March 20, the North Dakota governor signed SB 2262, which, among other things, amends the state’s law covering the unauthorized use of personal identifying information (PII). Specifically, the bill expands the definition of PII to include, (i) an individual’s payment card information; (ii) an individual’s biometric data; and (iii) any other information that can be used to access a person's financial records. Under the bill, an individual is guilty of an offense if the individual “obtains or attempts to obtain, transfers, records, or uses or attempts to use” any PII of another individual, living or deceased, to obtain anything of value without consent of the other individual. The bill is effective August 1.
Virginia allows institutions to refuse transactions if elder exploitation is suspected
On March 18, the Virginia Governor signed HB 1987, which authorizes staff of financial institutions to refuse a transaction, delay a transaction, or refuse to disburse transaction funds if the staff member (i) has a good faith belief that the transaction may involve the financial exploitation of an aged or incapacitated adult; or (ii) files a report or has knowledge that a report has been filed with the responsible local authority that states in good faith that the transaction may involve financial exploitation of an aged or incapacitated adult. Unless authorized by a court, the bill allows the continued refusal for up to 30 days after the date the transaction was initially requested. The financial institution and its staff are immune from civil or criminal liability under the bill, absent gross negligence or willful misconduct. The bill is effective July 1.
Virginia requires money transmitters to be licensed through NMLS
On March 19, the Virginia governor signed HB 2690, which requires money transmitters to be licensed through the National Multistate Licensing System and Registry (NMLS). The bill also (i) amends the definition of a “member” subject to the law’s requirements to include a person who owns or controls ten percent (previously it was five) of a limited liability company; (ii) allows for reports and other filings to be submitted to the Commissioner through the NMLS; and (iii) changes the due date for the annual licensing fee from September 1 to December 31. Additionally, on March 21, the governor signed HB 2251, which repeals provisions of the state’s mortgage licensing law related to the issuance of transitional mortgage loan originator licenses and replaces them with provisions granting temporary authority to act as a mortgage loan originator. Both bills are effective July 1.
Kentucky creates separate licenses for check cashing and deferred deposit service businesses
On March 19, the Kentucky governor signed S.B. 145, which establishes separate licenses for check cashing and deferred deposit service businesses. In addition, S.B. 145 creates a new section that allows the Department of Financial Institutions commissioner to (i) require license applications and certain other regulatory filings to also be filed with the State Regulatory Registry (Registry); (ii) report violations, enforcement actions, and other relevant information to the Registry; and (iii) access the Registry as “an agent for requesting information from and distributing information to the [DOJ] or other governmental agencies.” The act takes effect 90 days after adjournment of the legislature.
Virginia requires breach of personal information notification
On March 18, the Virginia governor signed HB 2396, which amends the Code of Virginia and requires an individual or entity owning or licensing computerized data that includes personal information to disclose all data breaches without “unreasonable delay” to the Virginia Attorney General and any affected Commonwealth residents. Under HB 2396, “personal information” is defined as “the first name or first initial and last name in combination with and linked to any one or more of the following data elements that relate to a resident of the Commonwealth, when the data elements are neither encrypted nor redacted.” The list of data elements was amended to add passport numbers and military identification numbers to the previous list, which included social security numbers, driver’s license numbers, and financial account numbers or credit/debit card numbers combined with codes or passwords that would grant access to a consumer’s financial account. The amendment is effective July 1.
Virginia provides certain debt management plan licensing exemptions
On March 8, the Virginia governor signed HB 2284, which amends Title 6.2 Chapter 20 of the Code of Virginia to exempt banks, savings institutions, credit unions, and individuals licensed to practice law in the state from the licensing requirements applicable to persons that provide debt management plans. Additionally, persons licensed under the amended chapter are not required to obtain a money transmitter license under Chapter 19, provided the “money transmission activities are limited to providing debt pooling and distribution services in accordance with [Chapter 20].” The amendment is effective July 1.
Virginia law allows financial institutions to share documents related to elder exploitation
On March 12, the Virginia governor signed HB 2225, which amends the state’s law relating to financial exploitation of adults, to provide that any financial institution staff who “suspects that an adult has been exploited financially” may now provide supporting information and records to the local department of social services, in addition to simply reporting the suspected exploitation as provided for under current law. The amendment is effective July 1.
North Dakota allows collection agencies to charge credit card fees to debtors
On March 6, the North Dakota governor signed HB 1204, which allows a collection agency to collect a transaction fee for processing a credit card payment. Under the amended law, a collection agency may collect, in addition to the principal amount of the claim, a transaction fee up to two and half percent for processing a credit card payment if: (i) the transaction fee is not otherwise prohibited under the law; (ii) a no-cost payment option is available to the debtor; and (iii) the no-cost payment option is disclosed to the debtor at the same time and in the same manner that the credit card information is taken. The law takes effect on August 1.