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CFPB issues guidance to student loan borrowers on Covid-19 debt relief
On March 27, the CFPB issued guidance on the student loan provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Pursuant to the Act, borrowers with federally held student loans will automatically have their loan principal and interest payments paused until September 30. Borrowers do not need to take any action to have their payments suspended and interest will not accrue during this period. The CFPB also provided additional guidance on the impact on privately held student loans and federal loans held by commercial lenders, and provided information to help borrowers avoid student loan debt relief scams.
Federal agencies announce measures to encourage consumer and business lending
On March 27, the Federal Reserve Board (Fed), the FDIC and the OCC jointly announced two measures the agencies have put in place to “support lending to households and businesses” during the Covid-19 pandemic. First, effective immediately, the agencies will “[a]llow[] early adoption of a new methodology on how certain banking organizations are required to measure counterparty credit risk derivatives contracts.” Second, the agencies will “[p]rovid[e] an optional extension of the regulatory capital transition for the new credit loss accounting standard.”
The first measure deals with the Standardized Approach for Calculating the Exposure Amount of Derivative Contracts (SA-CCR), which had an effective date of April 1. Allowing early adoption for the quarter ending on March 31 may “improve current market liquidity and smooth disruptions” caused by the Covid-19 pandemic. Further, the interim final rule for Current Expected Credit Losses (CECL)—the second measure—was released to minimize the effect of the “CECL accounting standard [on] regulatory capital.” In addition to the transition period of three years already available, the interim final rule—Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances—provides up to two more years to “mitigate the estimated cumulative regulatory capital effects” of CECL. Comments on the interim final rule must be submitted by May 11. (See OCC News Release 2020-42 here and FDIC press release here.)
FDIC updates guidance on protecting banks and consumers
On March 27, the FDIC announced an update to guidance it issued on March 16 regarding “steps to protect banks and consumers and to continue operations.” Among the updates, the agency (i) extended telework for all FDIC employees from March 30 until at least April 12; (ii) expanded the period of time the agency will conduct “[s]upervisory and other FDIC activities” off-site through April 12; and (iii) encouraged institutions to communicate with their “Examiner-in-Charge or Regional Director” if they anticipate delays in responding to “normal supervisory requests.”
Michigan Secretary of State issues FAQs on available services during Covid-19 crisis
On March 26, the Michigan Secretary of State (SoS) issued FAQs detailing what SoS services are available during the Covid-19 crisis and how to access them. The FAQs provide responses to questions regarding office closures, driver’s licenses, state identification cards, and vehicle registrations.
Texas Office of Consumer Credit Commissioner issues bulletins regarding Covid-19 to regulated lenders, credit access businesses, tax lenders, and motor vehicle sales finance licensees
On March 26, the Texas Office of Consumer Credit Commissioner (OCCC) issued four bulletins directed at regulated lenders, credit access businesses, property tax lenders, and motor vehicle sales finance licensees in light of Covid-19. The bulletins urge these entities to work with borrowers during the crisis, including through taking the following measures:
- Increasing communication with borrowers regarding Covid-19.
- Working out modifications with borrowers to help ensure successful repayment, including deferred or partial payments, which would avoid delinquencies and negative credit reporting.
- Waiving certain fees or charges (e.g., late charges, additional finance charges, deferment charges, nonsufficient fund fees) during the disaster declaration.
- Suspending charging off accounts.
- Suspending repossession of vehicles, repossessions of collateral, foreclosure of real property, as applicable
The bulletins also provide guidance on the use of electronic signatures, which the bulletins note are generally allowed under Texas and federal law. The bulletins also provide that the OCCC will not take enforcement actions against regulated lenders, credit access businesses, property tax lenders, or motor vehicle sales finance licensees that conduct business activities from unlicensed locations, if conducted in accordance with certain data security, safe record keeping, and protection of personal information requirements set forth in the bulletins.
Minnesota Department of Commerce designates banks and credit unions as critical sectors
On March 26, the Minnesota Department of Commerce clarified that banks, credit unions, and other financial services entities within the state are designated as critical sectors and will remain open during the Covid-19 crisis. Kelly’s remarks followed an executive order from Governor Tim Walz, which officially labeled financial services entities as critical sectors.
Indiana posts statement regarding remote notary technology vendors
On March 26, the Indiana secretary of state posted a statement providing that there are currently no approved remote notary technology vendors. Individuals are encouraged to check the announcement regularly as the secretary of state is working on approving vendors.
Idaho Department of Finance issues memorandum to money transmitter licensees and applicants
On March 26, the Idaho Department of Finance issued a memorandum to Idaho money transmitter licensees and applicants regarding agency operations and communications due to Covid-19. The memorandum includes information on the Department’s teleworking arrangements and notes that routine examinations of registered entities and agents have been suspended. Registration staff continues to process licensing/registration applications through the CRD/IARD/NMLS systems and U.S. mail. In line with the NMLS Policy committee’s decisions and recommendations, the Department has also extended deadlines by 60 days for the filing of certain reports and statements.
Alabama governor issues proclamations addressing notary services and remote shareholder meetings
On March 26, the Alabama governor issued a proclamation permitting remote notarization through videoconferencing, provided that certain requirements are met. A subsequent proclamation, issued on April 2, extended permission for remote notarization to unsupervised, non-attorney notaries and added a record-keeping requirement for such notarizations. Additionally, the proclamation permits remote shareholder meetings pursuant to guidelines and procedures adopted by the corporation’s board of directors, provided that certain requirements are met.
Florida Office of Financial Regulation issues emergency order to extend financial statement deadlines
On March 26, the Commissioner of the Office of Financial Regulation issued an emergency order extending the filing deadlines for annual financial condition reports, financial statement filings, first quarter Call Reports or financial reports or first quarter capital equivalency, and asset maintenance reports for a period of 45 days unless extended by order. The guidance further provides that deadlines for internal audit completion and related reporting deadlines as well as annual and special meetings are suspended and tolled for a period of 45 days unless extended by order.