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Financial Services Law Insights and Observations

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  • Washington reaches $1.6 million settlement with debt collector

    State Issues

    On September 8, the Washington attorney general announced that a Renton-based debt collector (defendant) will pay over $1.6 million in a settlement to resolve allegations that it violated the Washington Consumer Protection Act by misleading consumers with offers for “settlements” of debts. According to the AG, the defendant sent letters titled “settlement offers,” but failed to disclose that because the debt was older than the six year statute of limitations for filing a suit to collect, it could not enforce the debt in court. The term “settlement offer” allegedly deceptively suggested the defendant could potentially litigate to collect the debt. Under the terms of the settlement, the defendant is required to: (i) pay full restitution to 1,400 Washingtonians, a total of nearly $710,000; (ii) pay $1,675,000 to the attorney general’s office, including payment to cover the costs of the case and fund future investigations and enforcement of the Consumer Protection Act; (iii) cease using the words “settle” or “settlement” when attempting to collect on time-barred debts; and (iv) disclose that the statute of limitations to sue on the debt has passed.

    State Issues State Attorney General Enforcement Debt Collection Washington

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  • Maryland passes bill regarding creditworthiness

    State Issues

    On May 30, the Maryland governor signed HB 1213, which requires “certain credit grantors to adhere to certain rules concerning evaluations of applications and, under certain circumstances, consider alternative methods of evaluating an applicant’s creditworthiness when evaluating an application for a primary residential mortgage loan or an extension of credit.” Under HB 1213, an entity must, among other things: (i) adhere to the rules concerning evaluations of applications including history of rent or mortgage payments and utility payments, school attendance, and work attendance; and (ii) consider other verifiable alternative indications of creditworthiness if requested by the applicant. The law is effective October 1.

    State Issues State Legislation Washington Mortgages Consumer Finance

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  • Washington AG announces settlement with debt collection agency

    State Issues

    On June 8, the Washington attorney general announced a settlement with a Colorado-based collection agency for alleged unlawful debt collection practices in violation of Washington’s Consumer Protection Act and Collection Agency Act, including assessing fees and costs on consumers even when no funds were captured in the garnishment, operating without a license for over a year, and failing to provide legally required garnishment exemptions to state residents. Under the terms of the consent decree, the debt collection agency must pay back approximately $475,000 in restitution to as many as 5,000 state residents and forgive up to $250,000 in fees and costs to resolve the lawsuit. The debt collection agency must also pay $414,000 to the AG’s office for the cost of the investigation and to fund the ongoing work of the office’s Consumer Protection Division. In addition to paying the fines, the agency is also required to: (i) discontinue assessing fees on consumers from whom the company has not collected funds; (ii) provide legally required garnishment exemptions to consumers; and (iii) incorporate legally required evidence when submitting garnishment judgment applications to the court.

    State Issues Washington State Attorney General Enforcement Debt Collection

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  • Washington passes law allowing mortgage employees to work from home

    State Issues

    On March 24, the Washington legislature passed SB 5077, allowing licensed mortgage loan originator activity to be conducted from the mortgage loan originator’s residence if, among other things, certain state and information security requirements are satisfied.

    State Issues Covid-19 Washington Mortgages Mortgage Licensing Licensing Mortgage Origination Loan Origination

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  • Washington issues updated guidance to residential mortgage loan servicers

    State Issues

    On February 12, the Director of the Washington Department of Financial Institutions issued their fourth amended guidance to residential mortgage loan servicers.  The guidance reminds residential mortgage loan servicers to take all necessary precautions to help prevent the spread of Covid-19, including allowing them to continue working from home (previously discussed here.)  It also urges servicers to take “reasonable and prudent actions” to support consumers by:

    • Forbearing mortgage payments;
    • Refraining from reporting late payments to credit rating agencies;
    • Offering mortgagors additional time to complete trial loan modifications, and ensuring that late payments do not affect their ability to obtain permanent loan modifications;
    • Waiving late payment fees and online payment fees;
    • Postponing foreclosures;
    • Ensuring that the closure of the mortgage servicer’s office does not disrupt services to borrowers; and
    • Proactively reaching out to mortgagors via app announcements, text, email or otherwise to explain the assistance being offered to mortgagors.

    The guidance also notes that efforts to assist mortgagors will not be subjected to examiner criticism.

    State Issues Covid-19 Washington Mortgages

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  • Washington Department of Financial Institutions once again extends “work from home” guidance

    State Issues

    On January 29, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance (previously covered hereherehere, and here) permitting mortgage loan originators to work from home, provided certain data security obligations are met. The guidance extends through December 31, 2021.

    State Issues Covid-19 Washington Licensing Mortgage Origination Privacy/Cyber Risk & Data Security

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  • Washington Department of Financial Institutions once again extends “work from home” guidance

    State Issues

    On January 29, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance (previously covered hereherehere, and here) permitting mortgage loan originators to work from home, provided certain data security obligations are met. The guidance extends through December 31, 2021.

    State Issues Covid-19 Washington Mortgage Licensing Mortgage Origination Loan Origination Licensing Privacy/Cyber Risk & Data Security

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  • Washington extends garnishment protection to federal stimulus payments

    State Issues

    On January 4, Washington Governor Jay Inslee issued a proclamation, extending the state’s moratorium on garnishments related to consumer debts (previously covered here, herehere and here,) and adding federal stimulus payments to the list of funds that are protected from garnishment. Protected funds already included state and federal unemployment payments. These protections were set to expire by January 19 until the governor issued an additional proclamation, extending the moratorium “until the termination of the Covid-19 State of Emergency or until rescinded.”

    State Issues Covid-19 Washington Debt Collection

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  • Washington governor extends suspension of consumer garnishment

    State Issues

    On November 20, the Washington governor issued a proclamation extending a previous moratorium on garnishment for consumer debts until the earlier of December 7, 2020 or the termination of Washington’s Covid-19 State of Emergency. See here, here and here for previous coverage. The suspension applies to garnishment of consumer bank accounts, wages and income to satisfy consumer debt judgments. 

    State Issues Covid-19 Washington Supervision Consumer Finance Debt Collection

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  • Washington Department of Financial Institutions extends “work from home” guidance

    State Issues

    On October 26, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance (previously covered here, here, and here) permitting mortgage loan originators to work from home, provided certain data security obligations are met.  The guidance extends through March 31, 2021.

    State Issues Covid-19 Washington Financial Institutions Mortgage Licensing Mortgage Origination Loan Origination

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