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On June 29, California Governor, Gavin Newsom, signed SB 74, Budget Act of 2020 (and accompanying budget summary), which allocates $10.2 million in 2020-21 growing to $19.3 million in 2022-23 to the Department of Business Oversight, contingent on the enactment of the California Consumer Financial Protection Law (Law). As previously covered by a Buckley Special Alert (which details an earlier version of the proposal), the Law was originally proposed as a trailer bill to the state’s budget, but was not finalized by lawmakers prior to the June 15th budget deadline. In this version, the proposed budget and Law would: (i) revamp and rename the state’s Department of Business Oversight (DBO) to the Department of Financial Protection and Innovation (DFPI); (ii) establish an Office of Financial Technology Innovation to study emerging technologies in the financial industry; (iii) expand the DFPI’s authority to protect consumers from predatory practices by, among other things, prohibiting unlawful, unfair, deceptive, or abusive acts (consistent with Section 17200); and (iv) foster the responsible development of new financial products. California lawmakers now have until August 31 (end of session) to finalize “the statutory framework needed to implement the [Law].”
Notably, on August 6, the Assembly is holding a hearing to discuss the proposal and is seeking public feedback. Written comments should be submitted to BudgetSub6@asm.ca.gov prior to the hearing date.
Alaska governor announces temporary suspension of state regulations as part of Covid-19 emergency measures
On April 10, Alaska Governor Mike Dunleavy announced a temporary suspension of certain state fees, statutes, and regulations through May 11, including those imposed by the Department of Commerce. Governor Dunleavy cited his aim for the temporary suspension as exploring ways to “lessen the burden of state government on Alaska’s families and businesses…” during the Covid-19 crisis.
On March 30, pursuant to the Commissioner Order issued on the same day, the Minnesota Commerce Department issued Regulatory Guidance 20-14E to vehicle protection product warrantor registrants. The guidance provides temporary, emergency relief to vehicle protection product warrantors with respect to March and April registration renewals under Minn. Stat. § 59C.04. Renewal deadlines for registered vehicle protection product warrantors whose registration will expire during April or May, are extended up to 45 days from the prescribed due date.
On March 30, the Minnesota Commerce Department issued Regulatory Guidance 20-14D to service contract provider registrants. The guidance provides temporary, emergency relief with respect to March and April registration renewals related to service contract providers under Minn. Stat. § 59B.03. Renewal deadlines for registered service contract providers whose registration will expire during April or May, are extended up to 45 days from the prescribed due date.
On March 30, pursuant to a Commissioner Order issued on the same day, the Minnesota Commerce Department issued Regulatory Guidance 20-11 regarding notary requirement waivers. In light of the disruption caused by Covid-19, the guidance waives notarization requirements for franchises pursuant to Minn. R. Chapter 2860.9920 and 2860.9930 for new applications, amendments, and annual reports filed through June 30, 2020.
On March 25, the Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payments and online payments for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrowers to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.
On March 24, the Indiana governor issued a Stay at Home Order, for all residents except for those leaving their homes or residences for essential activities, essential governmental functions, or to participate in essential business and operations. Essential business and operations include financial and insurance institutions.
On March 24, the Indiana secretary of state, Securities Division, issued a Compliance Alert to all licensed loan brokers and collection agencies. The Division encouraged licensees to instruct their employees to work from home and refrain from any in-person meetings whenever possible, and noted that relevant state laws do not prevent individuals of licensed entities from working from their personal residences. The alert also noted that the commissioner would not consider a temporary arrangement where an employee works from home during the COVID-19 outbreak to require licensure as a branch office—provided certain conditions were met—including for proper handling of personal information.
On March 23, the Massachusetts governor ordered all businesses providing non-essential services to close their brick and mortar premises as of noon on March 24 and not to re-open until April 7. The order was accompanied by a list of essential services that included financial services. The Massachusetts Division of Banks confirmed via a notice that all entities chartered and licensed by the Division are considered essential services exempt from the governor’s emergency order.
Massachusetts temporarily waives requirements for certain residential property inspections prior to sale
On March 20, the Massachusetts governor ordered that the inspections for smoke alarms and carbon monoxide detectors required by state law in connection with residential property sales may be deferred, provided that (1) the buyer agrees to take responsibility for equipping the property with the requisite alarms and detectors; and (2) the inspection is conducted within 90 days after the state of emergency for the Covid-19 outbreak is lifted.
- Jonice Gray Tucker to discuss “How the new administration sets the tone for 2021” at the American Conference Institute Legal, Regulatory and Compliance Forum on Fintech & Emerging Payment Systems
- Sherry-Maria Safchuk to discuss UDAAP in consumer finance at an American Bar Association webinar
- Jeffrey P. Naimon to discuss "What to expect: The new administration and regulatory changes" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Steven R. vonBerg to discuss "LO comp challenges" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss “The False Claims Act today” at the Federal Bar Association Qui Tam Section Roundtable