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Massachusetts AG sues auto lender for deceptive loans
On August 31, the Massachusetts attorney general announced an action against a national auto lender for allegedly making unfair and deceptive auto loans and engaging in unfair debt collection practices. According to the complaint, since 2013, the auto lender allegedly made “high-risk high-interest subprime” loans to Massachusetts borrowers who the lender “knew or should have known were unable to repay their loans,” in violation of the Massachusetts Consumer Protection Act. Additionally, the attorney general asserts that consumers were subject to “hidden finance charges,” which resulted in consumers’ actual interest rates being higher than the state’s usury ceiling of 21 percent. Moreover, the lender’s collection employees allegedly “harassed” consumers in default by calling them “as often as eight times a day,” when state law limits collection calls to no more than two calls per week, sent improper repossession notices, and failed to use the correct fair market value when calculating deficiency amounts. Lastly, the attorney general argues that the lender used “false or misleading statements” concerning the characteristics of the loans packaged and securitized to investors.
The attorney general is seeking a permanent injunction, restitution, and civil penalties.
Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers
On August 20, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging motor vehicle sales finance licensees to work with consumers during the Covid-19 crisis (previously covered here, here, here, and here). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, waive certain charges, and suspend repossessions. The guidance also reminds licensees of legal requirements for using electronic signatures, and continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through September 30, 2020, unless withdrawn or revised.
Louisiana Office of Financial Institutions extends emergency declarations to non-depository entities
On July 24, the Louisiana Office of Financial Institutions extended emergency declarations for residential mortgage lenders, check cashers, bond for deed escrow agents and repossession agents, brokers and lenders licensed under the Louisiana Consumer Credit Law and Deferred Presentment and Small Loan Act, and pawnbrokers. The orders were previously covered here. Such entities are granted the authority to temporarily close licensed locations within Louisiana or to temporarily close and/or relocate to another location within the state. Mortgage loan originators are permitted to work from home, whether located in Louisiana or another state, even if the home is not registered with the LOFI. The declarations also provide instructions for notifying the LOFI of a temporary location change. The declarations will remain in effect as long as there is a public health emergency relating to Covid-19, or until rescinded or replaced.
Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers
On July 17, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging motor vehicle sales finance licensees to work with consumers during the Covid-19 crisis (previously covered here, here, and here). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, waive certain charges, and suspend repossessions. The guidance also reminds licensees of legal requirements for using electronic signatures, and continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through August 31, 2020, unless withdrawn or revised.
Texas Office of the Consumer Credit Commissioner extends regulated lender advisory
On July 17, the Texas Office of the Consumer Credit Commissioner updated its Regulated Lender Advisory Bulletin on coronavirus emergency measures, previously covered here. The guidance: (1) encourages lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosures of real property, among other things; (2) reminds lenders of legal requirements for using electronic signatures; and (3) continues to permit lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions. The guidance is in effect through August 31, 2020, unless withdrawn or revised.
Texas Office of Consumer Credit updates guidance for regulated lenders
On June 12, the Texas Office of the Consumer Credit Commissioner issued updated guidance for regulated lenders navigating the Covid-19 crisis. The guidance: (1) addresses the June 1 due date for filing annual reports; (2) encourages lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosure of real property, among other things; (3) reminds lenders of legal requirements for using electronic signatures; and (4) permits lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions. The guidance is in effect through July 31, 2020, unless withdrawn or revised
Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers
On June 12, the Texas Office of the Consumer Credit Commissioner issued an updated advisory bulletin urging motor vehicle sales finance licenses to work with consumers during the Covid-19 crisis (previously covered here and here). Among other measures, the regulator urged licensees to increase consumer communication, work out modifications, waive certain charges, and suspend repossessions. The guidance is in effect through July 31, 2020, unless withdrawn or revised
Louisiana Office of Financial Institutions updates non-depository emergency declarations
On June 5, the Louisiana Office of Financial Institutions updated its non-depository 2020 Covid-19 emergency declarations to extend earlier guidance regarding closure of licensed locations and temporary location changes for residential mortgage lenders, brokers and originators, check cashers, lenders or brokers licensed pursuant to the Louisiana Consumer Credit Law and the Louisiana Deferred Presentment and Small Loan Act, pawnbrokers, and repossession agents and bond for deed escrow agents. The original emergency declarations were previously covered here, here, here, here, here, here, and here. The declarations extend the guidance until June 26, 2020, unless terminated sooner.
North Carolina Attorney General announces joint relief effort for North Carolinians facing Covid-19 financial hardship
On June 4, the North Carolina attorney general announced the Carolina Relief Plan, a voluntary agreement whereby participating financial institutions will offer certain financial relief to customers facing Covid-19 financial hardships. Relief includes, among other things, allowing eligible customers to request a forbearance on residential mortgage payments not otherwise covered by the CARES Act, assistance for payment extensions of auto loan accounts, and relief from monthly maintenance fees, overdraft fees, and CD early withdrawal penalties. Under the agreement, any participating financial institution also must: (1) offer to place a moratorium on residential mortgage foreclosures and consumer auto repossessions through at least June 30, 2020; (2) refrain from reporting loans subject to Covid-19 accommodations; and (3) inform customers about the assistance they are being offered and of the heightened risk of scams. One financial institution has signed onto the relief plan as of the time of the announcement.
South Carolina regulator issues interim guidance to businesses regarding payment or performance deferrals and modifications
On June 1, the South Carolina Department of Consumer Affairs issued interim guidance regarding business activities during Covid-19, including payment or performance deferrals and modifications. The department strongly encourages persons and entities engaging in consumer credit transactions or other activities governed by the South Carolina Consumer Protection Code and subject to the department’s oversight to work with borrowers during the Covid-19 crisis and to “be practical, flexible, and empathetic.” The department also encourages businesses to adopt a number of measures related to modifications, workout strategies, waiving late fees, deferment charges, NSF fees, and certain ACH withdrawals, suspending charging off accounts, and suspending repossessions of collateral and foreclosure of real property. The interim guidance also addresses escrow accounts and electronic signatures, and sets forth additional resources for businesses and consumers.