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Special Alert: Buckley launches Covid-19 News & Resources page
Covid-19 and its impact on the global economy is presenting new questions and challenges for financial services companies at an unprecedented pace. Federal, state, and local governments and industry groups are working quickly to issue new guidance in response. Buckley LLP has created a Covid-19 news and resources page that summarizes and catalogs this guidance on an ongoing basis.
We encourage you to bookmark this page as a one-stop resource. We will also continue to share updates on key developments in our weekly InfoBytes newsletter. As always, please get in touch with your usual contacts at Buckley for advice on how to modify business practices to respond to changing regulatory requirements and consumer circumstances.
Proposed CARES Act allows fintechs to make federally backed small business loans
On March 18, Senator Mitch McConnell (R-KY) proposed relief legislation which, among other things, would temporarily allow fintechs to offer “small business interruption loans” for as long as the Covid-19 national emergency is in effect. The “CARES Act” or Corornavirus Aid, Relief and Economic Security Act, would provide nearly $300 trillion in additional funds to the SBA in order to provide emergency government-backed loans. Under the proposal, small businesses eligible for the SBA Section 7(a) loans with 500 or fewer employees, could use the loans to fund, such things as (i) paid sick, medical, or family leave; (ii) group health care benefits; (iii) employee salaries; (iv) mortgage payments; and (v) utilities. In addition, the proposal provides for loan deferment for a year and loan forgiveness for loans used to cover payroll expenses.
Nevada orders all non-essential businesses to close; certain court activity suspended
On March 18, the Nevada Department of Business and Industry, Financial Institutions Division, ordered all non-essential businesses to close for 30 days as a proactive measure to fight the spread of Covid-19. Effective March 17, the Las Vegas Justice Court suspended issuing Defaults on all civil actions, suspended issuing orders for the examination of a judgment debtor, and suspended the issuance of any Writ of Execution. Any property garnished or attached after March 17, 2020, must be released back to the judgment debtor. The statement also states that a collection agency is deemed a non-essential business at this time. Accordingly, the Nevada Financial Institutions Division recommends to all collection agencies holding a license or registration under Nevada Revised Statutes Chapter 649 to close for 30 days, unless otherwise modified or withdrawn by the Nevada governor.
Arizona attorney general requests financial assistance for Arizona consumers
On March 19, Arizona’s attorney general issued a request for financial and lending institutions to provide temporary relief to their Arizona customers. The governor’s requests for institutions included taking the following actions for at least 90 days: (ii) forbearing or deferring payments on mortgages, automobile loans, and consumer loans; (ii) postponing foreclosures and evictions; (iii) ceasing automobile repossessions; (iv) waiving late fees and default interest for late payments; and (v) halting negative credit reporting.
Oregon releases guidance for credit unions during Covid-19
Oregon’s Division of Financial Regulation communicated with credit union CEOs regarding operational adjustments due to Covid-19. Among other things, the state requests notice if credit unions temporarily close branches, decide to offer special programs, or make public statements about their response to Covid-19. The letter also notes that examinations will continue to be conducted offsite.
New Jersey issues Bulletin No. 20-05 to encourage institutions to meet the financial needs of consumers affected by Covid-19
On March 19, the Commissioner of the Department of Banking and Insurance (Department) signed Bulletin No. 20-05 to encourage institutions to meet the financial needs of consumers affected by Covid-19. The Department also reminded institutions to provide prompt notice to the Department regarding changes to operating hours of branch locations. The Department also requested all notices, inquiries, correspondence, and applications be submitted electronically by e-mail to the appropriate contacts.
New Jersey issues Bulletin No. 20-04 to address the disruption resulting from Covid-19
On March 19, the Commissioner of the Department of Banking and Insurance (Department) signed Bulletin No. 20-04 encouraging regulated entities and individuals to take the following actions, consistent with safe and sound banking practices: (i) relaxing due dates for loan payments (of all types, including mortgage, commercial, student, and other consumer loans); (ii) extending grace periods; (iii) modifying terms on existing loans; (iv) easing credit card limits; (v) extending new credit; (vi) waiving late fees and other fees; (vii) allowing customers to defer or skip payments; and (viii) delaying the submission of delinquency notices to credit bureaus.
New Jersey issues bulletin permitting licensees to work from home due to Covid-19
On March 19, the Commissioner of the Department of Banking and Insurance (Department) signed Bulletin No. 20-06 setting forth the Department’s no-action position regarding licensure for certain branch office locations due to individuals temporarily working from home as a result of Covid-19. Licensees must submit a list of all individuals working from home, a certification that the individuals are working from home due to Covid-19, and a certification that the locations will maintain certain data security and privacy protections. The no-action position is effective through April 30. In addition, the Department requested prompt notice for any changes to the operating hours of branch locations.
Massachusetts DOB instructs licensees on temporary branch closures
On March 19, the Massachusetts Division of Banks issued guidance to licensees for temporary closures necessitated by Covid-19. Licensees are encouraged to provide alternative service options to customers when feasible and notify customers about closures and alternatives as soon as practicable. In addition, licensees should notify the Division of any closures, business disruptions or other significant Covid-19-related developments, including significant staff or liquidity shortages or issues with funding closed loans to consumers.
Wisconsin Department of Financial Institutions issues guidance to payday lenders
On March 18, the Wisconsin Department of Financial Institutions (DFI) announced the issuance of emergency guidance on character and fitness requirements for all payday and licensed lenders doing business in Wisconsin. The DFI cautions payday and licensed lenders that increasing interest rates, fees, or any costs of borrowing in response to the Covid-19 crisis may result in license suspension or revocation. The emergency guidance also encourages the reduction of rates and fees “as low as operational expenses and sound lending practices allow.”