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Financial Services Law Insights and Observations

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  • Massachusetts Securities Division extends relief from certain filing requirements

    State Issues

    On September 30, the Massachusetts Securities Division issued an amended Emergency Notice extending temporary relief from signature and notarization requirements in corporate filings and for registered financial professional filings until October 31. As under previous iterations of the notice (covered here and here), the Division will allow electronic signatures or copies of signed documents for securities applications and securities notice filings among others. However, the temporary waiver of notarization requirements for certain corporate finance filings and the CORI form, and relief from annual update filings and document delivery requirements for investment advisers were not extended.

    State Issues Covid-19 Massachusetts Securities Notary ESIGN

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  • Massachusetts AG requires debt buyer to discharge 300K in educational debt

    State Issues

    On July 30, the Massachusetts attorney general announced a Nevada-based debt buyer will discharge nearly $300,000 in student loan debt in connection with a for-profit education company that sold allegedly ineffective online study guides and education materials. According to the assurance of discontinuance (AOD), the education company allegedly engaged in unfair and deceptive acts in the marketing and selling of its educational materials and services, which included arranging for consumers to finance equivalency exam fees. The company arranged for consumers to obtain financing from certain credit unions and those credit unions subsequently sold the loans to other entities, including the Nevada-based debt buyer.

    The AOD requires the debt buyer to discharge and cease collection of the company’s loans for each of the 76 Massachusetts consumers, amounting to nearly $300,000 in debt. Additionally, the debt buyer is required to pay Massachusetts approximately $70,600 for the attorney general to distribute to consumers who made payments to the debt prior to the action, and is prevented from reporting any negative credit information.

    State Issues State Attorney General Massachusetts Debt Buyer Student Lending Debt Collection

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  • Massachusetts Securities Division extends emergency notice easing certain requirements for securities filings

    State Issues

    On July 30, the Massachusetts Securities Division extended its emergency notice (previously covered here), which grants relief from signature and notarization requirements in corporate finance filings and grants relief for registered financial professionals during the Covid-19 outbreak. Specifically, the division will not require manual signatures or notarizations for securities applications and securities notice filings, among others, and will instead accept evidence of electronic signatures or 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. The relief is effective through August 31, 2020, unless extended or rescinded.

    State Issues Covid-19 Massachusetts Securities ESIGN Notary Fintech

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  • Massachusetts governor extends pause on evictions and foreclosures

    State Issues

    On July 21, the Massachusetts governor extended a moratorium on evictions and foreclosures for an additional 60 days, until October 17, 2020.  The moratorium was established through legislation enacted in April and previously covered here. The moratorium applies to most residential and small business commercial evictions, as well as residential foreclosures. The statement announcing the extension also notes the recent launch of a $20 million, statewide fund to assist low-income households and support landlords. An additional $18 million is available through the Residential Assistance for Families in Transition homeless prevention program for rent or mortgage payments.

    State Issues Covid-19 Massachusetts Evictions Foreclosure Mortgages

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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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  • Massachusetts Division of Banks issues guidance to credit unions on annual meetings

    State Issues

    On June 12, the Massachusetts Office of Consumer Affairs and Business Regulation, Division of Banks, issued industry guidance regarding annual meetings for Massachusetts chartered credit unions. Massachusetts credit unions that have not yet held their annual membership meeting may postpone the annual meeting until the state of emergency is lifted, the order declaring the state of emergency has expired or is rescinded, or such time as the credit union believes it may safely hold the meeting. Alternatively, a credit union may remotely hold the annual meeting, or may conduct a hybrid meeting consisting of a combination of remote communication in conjunction with a limited in-person meeting. A credit union may also utilize mail voting with either options. Credit unions that exercise a virtual meeting option must comply with certain requirements in the guidance.

    State Issues Covid-19 Massachusetts Credit Union Financial Institutions Banking

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  • Massachusetts Division of Banks issues guidance to mutual institutions on annual meetings

    State Issues

    On June 12, the Massachusetts Office of Consumer Affairs and Business Regulation, Division of Banks, issued industry guidance regarding annual meetings for Massachusetts state-chartered mutual banks and subsidiary banks of a Massachusetts mutual holding company. Mutual institutions that have not yet held their annual meeting this year may use remote communications to conduct the annual meeting virtually or as a hybrid meeting that includes limited in-person attendance of depositors or corporators, provided certain requirements are met. Alternatively, such mutual institutions may postpone an in-person annual meeting until after the state of emergency has ended. Mutual institutions that elect to offer remote annual meetings must comply with certain requirements in the guidance.

    State Issues Covid-19 Massachusetts Financial Institutions Banking

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  • District Court enjoins Massachusetts AG from enforcing emergency debt collection regulation

    Federal Issues

    On May 6, the U.S. District Court for the District of Massachusetts entered a temporary restraining order (TRO) enjoining the Massachusetts attorney general from enforcing an emergency regulation that made numerous standard debt collection actions an unfair or deceptive act or practice during the Covid-19 pandemic. As previously covered by InfoBytes, a debt collection trade association filed a complaint last month contending that the emergency regulation is a content-based restriction on free speech and unconstitutional because it, among other things, excludes six classes of collectors from the prohibition on placing collection calls, and does not treat all “communications” equally by excluding certain types of collections communications. The trade association argued that the emergency regulation, among other things, bars debt collectors from being able to initiate phone conversations with individuals who have unpaid debts. In granting the TRO, the court wrote that the measure violates debt collection agencies’ First Amendment rights without adding meaningful consumer protections, and that, “[w]hile the [r]egulation promises some relief from unwanted telephone calls, it does not pretend to offer any relief from the debt itself or the obligation to repay it in full.” The court also noted that the emergency regulation “singles out one group debt collectors and imposes a blanket suppression order on their ability to use what they believe is their most effective means of communication, the telephone. If what the Attorney General meant to accomplish by way of the [r]egulation was a strict liability ban on all deceptive and misleading debt collection calls, the [r]egulation is redundant as that is already the law, both state and federally.”

    Federal Issues Courts Debt Collection State Issues Massachusetts State Attorney General Covid-19

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  • Massachusetts regulator urges premium finance companies to work with customers

    State Issues

    On May 1, the Massachusetts Division of Banks issued guidance to insurance premium finance companies, stating that it “expects” them to provide relief and flexibility to customers during the Covid-19 pandemic. The division issued the guidance in light of a March 23 bulletin in which the Massachusetts Division of Insurance urged Massachusetts insurance carriers to take steps to preserve individual access to insurance coverage.

    State Issues Covid-19 Massachusetts Insurance Consumer Finance

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  • Massachusetts regulator updates foreclosure moratorium FAQs

    State Issues

    On May 1, the Massachusetts Division of Banks issued updated FAQs regarding Chapter 65 of the Acts of 2020, an April 20 state law establishing a temporary moratorium on certain residential foreclosures. The updated FAQs restate that, until the end of the moratorium, which is currently set to expire on August 18, 2020, lenders cannot charge fees other than those contractually scheduled and calculated as if the borrower made all payments in full and on time. The updates also clarify that the foreclosure and forbearance provisions of Chapter 65 do not apply to residential investment properties, residential properties that are not owner-occupied, and residential properties taken in whole or in part as collateral for a commercial loan.

    State Issues Covid-19 Massachusetts Foreclosure Mortgages Forbearance

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