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Financial Services Law Insights and Observations

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  • South Dakota regulator encourages pandemic planning

    State Issues

    On March 12, the South Dakota Division of Banking issued a memorandum encouraging state-chartered banks to review recent pandemic planning guidance issued by the Federal Financial Institutions Examination Council and then revise or establish appropriate pandemic plans. The Division advised that the plans should be integrated into business continuity plans and consider ways to maintain essential financial services for customers while limiting impact to employees. Finally, the Division indicated that it will monitor the impact of Covid-19 and alter onsite examination activities as needed.

    State Issues South Dakota State Regulators FFIEC Business Continuity Consumer Finance Covid-19

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  • Minnesota Commerce Department instructs banks on temporary closures

    State Issues

    On March 12, the Minnesota Commerce Department issued guidance on emergency closures for banks, and a similar guidance for credit unions.  In an emergency (including for Covid-19 or other pandemic, related conditions), officers have the authority to decide not to open or to close an already open office, but prior approval is needed for closures lasting more than 48 hours, excluding legal holidays. The Department should be notified of closures as soon as practical. On March 17, the Department issued a clarification that a bank is not considered closed if it elects to close the lobby but maintains drive-through service or if the lobby is open (i.e., not by appointment-only basis) but not immediately accessible due to locked doors.

    State Issues Covid-19 Minnesota Credit Union Bank Compliance

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  • Montana regulator permits state banks, credit unions to close

    State Issues

    On March 12, the Montana Division of Banking and Financial Institutions issued a proclamation permitting state-chartered banks and credit unions located in Montana to close any office to protect the health and safety of employees and customers. The proclamation orders all institutions to develop and implement plans to continue providing essential financial services to their customers via ATMs, mobile applications, or drive through windows. Additionally, the proclamation orders all institutions unable to continue providing essential services to immediately notify the Division.

    State Issues Covid-19 Montana Bank Compliance

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  • FINRA releases pandemic-related guidance in connection with Company-Related Action submissions

    Federal Issues

    On March 12, FINRA released guidance in connection with Company-Related Action submissions. The guidance provides that FINRA’s Market Operations Department will not deem a Company-Related Action as late for purposes of assessing late fees if an issuer is unable to provide notice sufficiently in advance of the record or effective date due to the Covid-19 outbreak.

    Federal Issues Covid-19 FINRA

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  • Idaho regulator issues “Work from Home” guidance

    State Issues

    On March 12, the Idaho Department of Finance issued guidance to its licensees and registrants—including mortgage brokers/lenders, mortgage loan originators, regulated lenders, title lenders, payday lenders and collection agencies—permitting employees to work from home even where the residence is not a licensed branch. The Department stated it will not take action against a licensee or registrant so long as the licensable activities meet specified data security and privacy requirements, and the licensee or registrant avoids advertising the unlicensed address or phone number, meeting consumers at the residence, or otherwise holding out or suggesting that the residence is a licensed location. The guidance is effective until June 30.

    State Issues Covid-19 Idaho Licensing Payday Lending MLO Debt Collection Mortgage Broker Mortgage Lenders Title Loans

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  • Kansas Department of Credit Unions issues guidance on pandemic planning

    State Issues

    On March 11, the Kansas Department of Credit Unions issued guidance to Kansas-chartered credit unions on pandemic planning. The guidance outlines areas and objectives that should be met by a credit union’s business continuity plan. Among other things, the guidance encourages credit unions to have a comprehensive framework of facilities, systems, or procedures to provide the organization with the capability to continue its critical operations in the event that staff members may be unavailable for prolonged periods.

    State Issues Kansas Credit Union Business Continuity Covid-19

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  • Massachusetts DOB reminds licensees of requirement for pandemic planning

    State Issues

    On March 11, the Massachusetts Division of Banks issued a reminder to licensees to have business continuity plans that address the circumstances of a pandemic outbreak. The Division further advised licensees that it does not require an MLO’s home to be licensed as a branch so long as they do not advertise it as an office or meet consumers there and that it would permit other licensees to work from home, if feasible, subject to the same requirements.

    State Issues Massachusetts MLO State Regulation Business Continuity Licensing Covid-19 Mortgages

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  • House Financial Services Committee sends letter to trade associations regarding responses to Covid-19

    Federal Issues

    On March 11, the House Financial Services Committee issued a letter to several institutions and trade associations stating its concern for citizens impacted by the pandemic in which it urged them to provide assistance.  In doing so, it said that “[i]t would be unfair if innocent borrowers were harmed through negative information on their consumer reports.  Once negative information is reported to consumer reporting agencies, these consumers are likely to see a reduction in their credit scores, which may limit their ability to access credit in the future.” The letter asked the entities to provide a written response no later than March 20 to describe what their member companies are doing to respond to Covid-19, including specifics on what accommodations the institutions are offering to affected consumers, including their own employees. 

    Federal Issues House Financial Services Committee Consumer Finance Consumer Credit Covid-19

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  • Michigan Office of Credit Unions issues a call for credit unions to review emergency procedures and continuity plans

    State Issues

    On March 10, the Michigan Office of Credit Unions Director Denice Schultheiss issued a letter to credit unions calling on them to review their Disaster Recovery and Continuity of Operations Plans and Procedures in light of the Covid-19 crisis. Key operational aspects to be reviewed include: (i) supply staff operations; (ii) personnel policies; (iii) remote work capabilities; (iv) contingency plans for critical operations, systems, communications, and potential branch closures; (v) identification of third-party services that could be impaired; (vi) cash liquidity; and (vii) internal communication of preparedness policies and procedures. The letter also provided resources for credit unions as they review and assess current procedures.

    State Issues Covid-19 Michigan Credit Union

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  • Texas regulator issues guidance for credit union contingency plans

    State Issues

    On March 10, the Texas Credit Union Department issued guidance to credit unions encouraging them to update their pandemic procedures, initiate contingency plans, and take steps to reduce Covid-19 transmission. The department also urged credit unions and their boards to remain informed on Covid-19 developments.

    State Issues Covid-19 Texas Credit Union

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