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Oregon approves final student loan servicer regulations
Recently, the Oregon Department of Consumer and Business Services, Division of Finance and Securities Regulation (the Department), filed agency-approved student loan servicer licensing regulations with the Oregon Office of the Secretary of State. The regulations implement SB 485 (enacted last July and covered by InfoBytes here), which established provisions for student loan servicers related in part to licensing requirements, including the requirement that an applicant for a student loan servicer license should submit applications via the Nationwide Multistate Licensing System (NMLS).The act also implemented related consumer protections for borrowers.
The new regulations establish specific application requirements, including provisions related to subcontractors performing servicing activities on behalf of the student loan servicer. The regulations also provide for automatic licensure for applicants that service student loans under a contract with the Department of Education. Additionally, the regulations address (i) procedures for licensing branch locations; (ii) licensing renewals and fees; (iii) liquidity standards; (iv) bond requirements; (v) various annual reporting requirements; (vi) assessment payments and examination fees; (vii) rules for using an assumed business name; (viii) financial responsibility criteria; (ix) student loan servicer duties and responsibilities in addition to prohibited acts; and (x) licensing exemptions. The regulations also establish the Department director’s supervisory authority and outline disclosure requirements for significant developments or changes to a licensee’s record. The regulations became effective July 1.
States settle with company on fraudulent MLO certifications
On February 10, the Conference of State Bank Supervisors announced that the California Department of Financial Protection and Innovation, Maryland’s Office of the Commissioner of Financial Regulation, and the Oregon Division of Financial Regulation have reached a settlement agreement with the owner of a California-based company for providing false certificates claiming that mortgage loan originators (MLOs) took mandatory eight-hour continuing education courses as required for licensure under state and federal law. The three state financial regulators brought separate enforcement actions alleging violations of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) against the individual and his family (collectively, “respondents”) for their role in the “multi-state fraud scheme that involved hundreds of mortgage loan originators.” According to the announcement, the respondents have “agreed to fully cooperate and provide testimony against implicated mortgage loan originators,” and have “agreed to a lifetime restriction from direct and indirect involvement in businesses that provide mortgage lending-related education.” In addition to a $75,000 monetary penalty (which will be divided between the three states), the respondents have agreed to a non-compliance penalty of $15 million should they fail to fully comply with the terms of the settlement agreement.
The action follows a multistate $1.2 million settlement reached last month with 441 MLOs. As previously covered by InfoBytes, the enforcement action included the participation of 44 state agencies from 42 states, and required the settling MLOs to surrender their licenses for three months, pay a $1,000 fine to each state that is a signatory to the consent order in which the MLO holds a license, and take pre-licensing and continuing-education courses before petitioning or reapplying for an MLO endorsement or license.
Oregon enacts student loan servicer provisions
On July 27, the Oregon governor signed SB 485, which outlines licensing provisions for student loan servicers and implements consumer protections for borrowers. Among other things, the act requires, subject to certain exemptions, persons servicing student loans to obtain a license from the Oregon Department of Consumer and Business Services (DCBS). Should the director reasonably believe that a person subject to the act’s provisions is “engaging in or is about to engage in an act or practice that constitutes servicing a student loan in this state without first obtaining a license” the director may order the person to cease and desist, affirmatively perform the act, or may apply to an Oregon circuit court to enjoin the person from engaging in such act or practice. Additionally, the act outlines requirements related to, among other things, (i) licensing applications, including that the director may require applicants to submit applications to the Nationwide Multistate Licensing System instead of, or in addition to, submitting the application to the director; (ii) licensing renewals, reinstatements, and surrenders; (iii) a licensee’s principal place of business; (iv) liquidity standards; and (v) branch closures, relocations, or the opening of new locations. Under the act, the director is also granted general supervisory authority over each licensee in the state, examination authority, and the ability to participate in multistate examinations scheduled and conducted by the Conference of State Bank Supervisors or the CFPB. The director may also investigate borrower complaints and servicers’ policies and procedures, may impose civil penalties for violations of the act’s provisions, and may promulgate rules and take any other actions necessary to undertake and exercise the duties and powers conferred on the position. The act also outlines provisions related to servicing obligations, prohibits student loan servicers from engaging in fraudulent, deceptive, and dishonest activities, and creates a student loan ombudsperson at DCBS to handle complaints against student loan servicers and educate borrowers about loan repayment options. The act took effect on its passage.
Oregon extends moratorium on evictions, creates rent payment grace period
On June 30, Oregon enacted legislation that prohibits residential and commercial evictions based on nonpayment of rent during an “emergency period,” which extends from April 1 until September 30, 2020. The law also creates a six month grace period for tenants to make outstanding rental payments accrued during the emergency period. Tenants cannot be evicted during the grace period for failure to repay rent accrued during the emergency period, but tenants must make rental payments going forward. Prior to enactment of the legislation, the Oregon governor created a moratorium on eviction using an executive order.
Oregon enacts bill providing payment deferrals and foreclosure relief
On June 30, the Oregon governor signed HB 4204, which requires mortgage payment deferrals and limits foreclosures during the Covid-19 emergency period, which runs from March 8 until September 30. Among other things, during that period, a lender may not treat as a default a borrower’s failure to make a periodic installment payment or to pay any other amount that is due to the lender if, at any time during the emergency period, the borrower notifies the lender of his or her inability to make the periodic installment payment. Unless the lender and borrower do not otherwise agree to otherwise modify, defer, or mitigate a loan, the lender must refrain from collecting during the emergency period and must permit the borrower to pay the amounts deferred at the end of the mortgage term. The bill also imposes certain restrictions on a lender’s ability to assess late fees and to pursue a foreclosure. The bill became effective on June 30.
Oregon authorizes remote notarizations through July 2021
On June 30, the Oregon governor signed HB 4212A into law, which authorizes remote online notarization through July 2021. Under the new law, a commissioned notary public may use audio-visual technology to perform notarizations, subject to certain requirements, limitations and conditions. The Oregon secretary of state also issued guidance which assists notaries to find technology vendors that meet the requirements of the new law, register for online notarization training, and submit the required notice form.
Oregon regulator issues guidance for debt buyers and collectors
On April 30, the Oregon Department of Consumer and Business Services, Division of Financial Regulations issued Bulletin No. DFR 2020-14 to provide guidance to state-regulated debt buyers and collection agencies on reasonable measures they could take consistent with the governor’s April 17 executive order preventing garnishment of CARES Act stimulus checks (covered here). The guidance encourages entities to take active measures to help debtors affected by Covid-19, including: (i) offering payment accommodations like deferrals; (ii) waiving certain fees; (iii) temporarily suspending collection activities for debtors with significant hardships; and (iv) stopping collection activity for debts whose only income source is exempt.
Oregon Division of Financial Regulation issues bulletin permitting temporary work from home for employees of certain licensees
On April 20, the Oregon Division of Financial Regulation issued a revised Bulletin No. DFR 2020-6 temporarily authorizing certain licensees to work from home while transacting business when specific conditions are met. Among other things, the bulletin requires licensed companies to provide prior notice to the DFR of their intent to permit employees to work from home to prevent the spread of Covid-19.
Oregon governor exempts CARES Act payments from garnishment
On April 17, the governor of Oregon issued an executive order exempting all CARES Act stimulus payments to individuals from garnishment, subject to limited exceptions. CARES Act payments will remain exempt from garnishment when deposited into a financial institution. The exemption will remain in effect until terminated by the governor.
Oregon publishes website with Covid-19 insurance and financial services information for consumers
In late March, Oregon published a website that includes FAQs addressing Covid-19 insurance and financial services information for consumers. The website addresses questions regarding, among other things, making mortgage payments and addressing concerns about keeping money in checking or savings accounts during the Covid-19 outbreak. In addition, the responses to the FAQs indicate that the Division of Financial Regulation is encouraging its regulated lenders and financial service providers to take active measures to provide help to people and businesses affected by the pandemic, including offering loan forbearance plans, fee waivers, and other deferred payment options to their customers.