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Financial Services Law Insights and Observations

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  • Oklahoma regulator amends working from home guidance

    State Issues

    On June 30, the Oklahoma Department of Consumer Credit extended, for the third time, its interim guidance to regulated entities on working from home (see here, here, and here for previous coverage). The guidance sets forth data security standards that regulated entities must meet in order for the department to take no action with respect to employees conducting activities that would otherwise require licensure of their homes. The revised guidance also provides that the department will expedite and waive fees for change of address applications in the event that a licensed location is compromised by Covid-19 or is undergoing decontamination. The guidance was extended through September 30, 2020.

    State Issues Covid-19 Oklahoma Consumer Credit Privacy/Cyber Risk & Data Security Licensing

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  • FHA issues mortgagee letter extending guidance on employment reverification and appraisals

    Federal Issues

    On June 29, the FHA issued Mortgagee Letter 2020-20, which re-extends the effective date of Mortgagee Letter 2020-05, previously covered here and here. The re-extension of appraisal guidance in Mortgagee letter 2020-05 and of re-verification of employment guidance in Mortgagee Letter 2020-05 are effective immediately for cases closed on or before August 31, 2020.

    Federal Issues Covid-19 FHA Appraisal Mortgages

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  • FINRA updates guidance on fingerprinting requirements

    Federal Issues

    FINRA has updated its frequently asked questions guidance regarding relief from certain fingerprinting requirements (previously covered here). The guidance notes that, on June 27, the SEC extended its order providing temporary relief from fingerprinting requirements of the Securities Exchange Act Rule 17f-2 for FINRA members until a date to be specified in a public notice from SEC staff. Because FINRA already provided notification to the SEC in March on behalf of its members, their employees, and associated persons, such individuals may continue to rely on the commissioner’s order and FINRA’s notification. However, for an individual seeking registration pursuant to the submission of a Form U4, a FINRA member firm seeking to rely on temporary exemptive relief for registered persons must comply with FINRA’s guidance with respect to FINRA Rule 1010.

    Federal Issues Covid-19 FINRA Fintech SEC

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  • New York Department of Financial Services adopts emergency measure to provide relief to insureds

    State Issues

    On June 28, the New York Department of Financial Services adopted an emergency measure that amends the insurance regulations to provide relief to policyholders, contract holders, and insureds who can demonstrate financial hardship relating to the Covid-19 pandemic. Among other things, the emergency measure: (i) provides that premiums remitted by a creditor will be assumed to provide coverage under a credit life or credit unemployment insurance policy for insured debtors whose payments are not more than three months overdue; (ii) provides certain protections for insureds who do not make timely premium payments to certain insurance entities; and (iii) prohibits a premium finance agency from cancelling an insurance policy due to an insured’s failure to make a timely installment payment for a period of at least 90 days, if the insured can demonstrate financial hardship due to Covid-19, and subject to the safety and soundness of the premium finance agency. 

    State Issues Covid-19 New York NYDFS Insurance Consumer Credit

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  • VA issues lender guidance on Covid-19

    Federal Issues

    On June 30, the Department of Veterans Affairs issued Circular 26-20-25, which provides guidance on the impact of the CARES Act foreclosure protections on VA-guaranteed purchase and refinance transactions. The circular states that for purchase and cash-out refinance loans, the “VA will not consider a Veteran as an unsatisfactory credit risk, based solely upon the fact that the Veteran received some type of credit forbearance or experienced some type of deferred payment during the COVID-19 national emergency.” With regard to Interest Rate Reduction Refinance Loans (IRRRL), the Circular notes that the VA is waiving certain prior approval requirements for delinquent loans if (i) the lender is approved to close loans on an automatic basis; (ii) the loan being refinanced is under CARES Act forbearance protections; (iii) the borrower is no longer experiencing the financial hardship caused by the Covid-19 pandemic; and (iv) the borrower qualifies for other IRRRL credit standards. Moreover, the Circular details additional IRRRL considerations for lenders, including maximum loan amounts, loan seasoning, and valuation requirements. Lastly, the Circular encourages lenders to waive origination fees and consider discount points and premium pricing offsets for veterans impacted by the Covid-19 pandemic.

    Federal Issues Covid-19 CARES Act Department of Veterans Affairs Refinance IRRRL Foreclosure

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  • NYDFS discusses state CRA exams and Covid-19 considerations

    State Issues

    On June 30, NYDFS issued two industry letters aimed at reminding New York regulated banking institutions of their responsibilities under New York State’s Community Reinvestment Act (NYCRA) with respect to minority-and women-owned businesses, as well as opportunities to receive NYCRA credit for Covid-19 pandemic activities.

    The first industry letter discusses the state’s recent amendments to the NYCRA, which were effective January 11, 2020, and require NYDFS to consider “several aspects of banking institutions’ activities with respect to minority- and women-owned businesses.” These include, among other things, (i) “‘the banking institution’s participation, including investments, … in technical assistance programs for small businesses and minority- and women-owned businesses’”; and (ii) “‘banking institution’s origination of … minority-_and women-owned business loans within its community or the purchase of such loans originated in its community.’” NYDFS notes that later this year, it will begin to request information regarding programs related to minority- and women-owned businesses in order to begin evaluating banks under the new amendments. NYDFS also provided a spreadsheet with sample requests for guidance.

    The second industry letter describes the circumstances in which regulated institutions may receive NYCRA credit for activities taken in response to the Covid-19 pandemic, which the announcement notes is consistent with the guidance federal regulators have issued on the same topic (covered by InfoBytes here and here).

    State Issues State Regulator New York NYDFS CRA State Legislation Covid-19

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  • California governor issues executive order extending previous relief orders

    State Issues

    On June 30, the California governor signed Executive Order N-17-20 (previously discussed here), which extends authorization for local governments to halt evictions for renters impacted by the Covid-19 pandemic through September 30. Among other things, the executive order also extends the deadlines in connection with certain licenses, including real estate licenses, which we previously covered here.

    State Issues Covid-19 California Mortgages Evictions Mortgage Licensing Licensing

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  • Massachusetts Securities Division issues emergency notice easing filing requirements for securities filings

    State Issues

    On June 29, the Massachusetts Securities Division issued an emergency notice providing temporary relief from signature and notarization requirements in corporate finance filings, and from certain additional requirements relating to the registration of financial professionals. Specifically, the division will not require manual signatures or notarizations for securities applications and securities notice filings, among others, and will instead accept (i) evidence of electronic signatures or (ii) copies of signed documents. With respect to certain financial professionals, the division has also provided relief relating to (i) physical signatures required on Forms U4, (ii) the submission of Criminal Offender Record Information forms in connection with an application for registration, and (iii) annual update filings and document delivery requirements.

    State Issues Covid-19 Massachusetts Fintech ESIGN Notary

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  • Colorado enacts bill limiting certain debt collection activity

    State Issues

    On June 29, the Colorado governor signed Bill 20-211, which places limitations on certain debt collections. Among other things, the bill prohibits a judgment creditor from initiating a new extraordinary collection action (i.e. a garnishment, attachment, levy or execution to collect or enforce a judgment on a debt) from the date of the bill through November 1, 2020, unless certain requirements set forth in the bill are met. These requirements include, but are not limited to, providing at least 10 days advance written notice to the debtor of their right to temporarily suspend the collection action if they are facing financial hardship due to the Covid-19 emergency.

    State Issues Covid-19 Colorado Debt Collection

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  • Tennessee extends authorization of remote notarization through August 29

    State Issues

    On June 29, the governor of Tennessee issued Executive Order No. 52, extending authorization for remote notarization and witnessing of documents through August 29. The order extended the terms initially authorized in Executive Order No. 26 and previously extended by Executive Order No. 37.

    State Issues Covid-19 Tennessee Notary Fintech

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