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Massachusetts regulator suspends lending limits for PPP loans
On April 6, the Massachusetts Division of Banks issued guidance to state-chartered banks and credit unions indicating that it will not make adverse regulatory findings or take enforcement action if a loan made under the Small Business Administration’s Payment Protection Program (PPP) causes the institution to violate legal limits on loans to one borrower or the institution’s internal policy. The division also encouraged institutions to work collaboratively to meet demand for PPP loans, such as instituting referral systems.
Massachusetts Division of Banks updates extensions for licensee filings
On March 30, the Massachusetts Division of Banks (DOB) issued an update for licensees to clarify the filing deadlines for financial statements and call reports in light of the NMLS policy decision. The DOB is providing a 60-day extension to file financial statements, a 30-day extension to submit Call Reports and the MCR Standard Financial Condition Report, and a 60-day extension for Annual Reports.
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.
Massachusetts Division of Banks supports NMLS policy changes to provide relief to licensees
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.
Massachusetts DOB issues expectations for relief to mortgage borrowers
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 payments and online payments 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 borrowers 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 issues essential services FAQs
On March 25, Massachusetts posted a list of FAQs to assist businesses and consumers determine what is considered an essential business, as well as information to assist businesses seeking to qualify as essential.
Massachusetts Governor issues “stay at home” order
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.
Massachusetts Division of Banks requests notification of certain operational changes
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.
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.