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Massachusetts attorney general issues emergency regulation prohibiting certain debt collection practices
On March 27, the Massachusetts attorney general issued an emergency regulation that makes numerous standard debt collection actions an unfair and deceptive act or practice during the defined “state of emergency period.” Specifically, the emergency regulation prohibits both creditors and debt collectors from: (i) initiating, filing, or threatening to file any collection lawsuit; (ii) initiating or threatening to initiate any legal or equitable remedy for garnishment, seizure, attachment or withholding of wages, earnings, property or funds; (iii) initiating or threatening to initiate repossession of a vehicle; (iv) applying for, causing to be served or enforced, or threatening to apply for or enforce any capias warrant; (v) visiting or threatening to visit the household or place of employment of any debtor; and (vi) confronting or communicating in public with any debt regarding collection. In addition, the regulation also prohibits debt collectors from initiating phone calls with debtors, unless necessary to discuss a rescheduled court appearance or at the request of the debtor. These prohibitions do not apply to debts secured by mortgage on real property or debt owed by a tenant to an owner. The regulation will remain in effect for the early of: (i) 30 days after the lifting of the declared state of emergency; or (ii) 90 days.
District court approves $2.3 million class settlement resolving violations of Massachusetts debt collection laws
On March 23, the U.S. District Court for the District of Massachusetts issued an order granting final approval to a nearly $2.3 million class action settlement, reached through mediation, to resolve allegations that a subsidiary of a large U.S. retailer (defendant) made excessive debt collection calls to Massachusetts consumers. The named plaintiff claimed that the defendant violated the Massachusetts Consumer Protection Act and state debt collection regulations by calling consumers more often than twice in a seven-day period. The order also lowered the plaintiff’s attorneys’ fees because, according to the court, the case was not as risky as the attorneys claimed and not complex enough to warrant taking approximately one-third of the settlement fund.
On March 26, the Massachusetts Division of Banks issued guidance adopting the policy changes proposed by the NMLS to provide a 60-day extension to all licensees to submit Call Reports and financial statements. Additionally MDB is temporarily instituting a policy to extend the Annual Report deadline by 60 days for regulated entities that cannot meet the original deadlines due to the Covid-19 crisis.
On March 25, the Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payment and online payment for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrower to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.
Massachusetts Division of Banks addresses financial institutions and mortgage industry on Covid-19 provisions
On March 25, the Massachusetts Division of Banks communicated with the state’s financial services industry, stating that the Division “fully expects” institutions to provide relief to those borrowers adversely impacted during the Covid-19 crisis. These actions include: postponing foreclosures for 60 days; forbearing mortgage payments for 60 or more days from their due dates; waiving late payment fees and any online payment fees for a period of 60 days; refraining from reporting late payments to credit rating agencies for 60 days; offering borrowers an additional 60-day grace period to complete trial loan modifications, and ensuring that late payments during the Covid-19 pandemic do not affect their ability to obtain permanent loan modifications; and proactively reaching out to borrowers to explain the above-listed assistance being offered.
On March 23, Massachusetts Governor Baker issued a statewide emergency order requiring non-essential businesses and organizations to close as of March 24 at 12pm. Financial services, including workers needed to process and maintain systems for processing financial transactions, and workers needed to provide consumer access to banking and lending services, are considered essential services exempt from the order.
On March 19, the Massachusetts Division of Banks sent an email asking that licensees notify their customers of temporary closure of their facilities and the availability of any alternative service options as soon as practical. It also asks licensees to notify the Division promptly regarding any location closures, business disruptions, or other significant developments relating to Covid-19, such as closure of Massachusetts offices/locations, significant staff shortages, liquidity shortages, distress with funding sources, or issues funding closed loans for Massachusetts consumers.
On March 19, the Massachusetts Division of Banks (Division) sent an email to licensees requesting them to notify the Division promptly regarding any location closures, business disruptions, or other significant developments related to Covid-19. Examples include closures of Massachusetts offices/locations, significant staff shortages, liquidity shortages, distress with funding sources, or issues funding closed loans for Massachusetts consumers. This information will be critical for the Division’s ability to monitor the industry and identify both local and systemic issues.
Massachusetts Securities Division relaxes notarization and signature requirements for certain filings
On March 24, the Massachusetts Securities Division issued an Emergency Notice giving temporary relief from certain filing requirements for corporate finance filings and financial professional registrations during the Covid-19 outbreaks. The Division will not require manual signatures or notarizations for securities registration applications, exemption filings, securities notice filings, and consent to service of process forms and will accept e-signatures and copies of signed documents where required. The Division will also permit electronic submission of Forms U4 without physical signatures from individual agents or investment advisor representatives, provided that certain requirements are met, and will accept alternatives to a notarized Criminal Offender Record Information acknowledgment form. Finally, the Division will allow investment advisers up to 45 additional days to perform any Form ADV filing, updating, or customer delivery requirements. This guidance will remain in effect until April 30, unless extended or rescinded.
- Benjamin W. Hutten to discuss "Understanding OFAC sanctions" at a NAFCU webinar
- Warren W. Traiger to discuss "Key takeaways from proposed CRA modernization" at the New York Bankers Association Technology, Compliance & Risk Management Forum
- Garylene D. Javier to discuss "Navigating workplace culture in 2020" at the DC Bar Conference