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On May 11, the Maryland State Collection Agency Licensing Board issued an advisory notice regarding voluntary cessation of collection agency activity. The board noted its expectation that collection agencies that voluntarily cease business operations in Maryland do so in compliance with their respective business continuity plans to manage any related disruptions in compliance and otherwise wind down operations in an orderly manner that protects consumers from harm. The notice sets forth certain minimum requirements that a collection agency must meet, including promptly notifying the owner of consumer claims assigned to the collection agency if collection of the consumer claims will cease and remitting any and all consumer payments held in custodial accounts. Collection agencies temporarily or permanently ceasing operations must provide the board with documentation explaining its plans to meet the expectations set forth in the guidance.
On May 4, the Maryland governor’s Office of Legal Counsel provided interpretive guidance for financial institutions regarding a previous executive order prohibiting garnishment of CARES Act recovery rebates. The office recommended enforcement action not be taken against a financial institution in a number of situations, including if it subjected a customer’s CARES Act rebate to garnishment and sent the proceeds to a judgment creditor prior to receiving notice of the order or being reasonably able to act on it. The office also clarified that application of a CARES Act recovery rebate to the negative balance in an overdrawn account is not considered to be the exercise of a lien or right of setoff for purposes of the executive order.
On April 30, the Maryland commissioner of financial regulation issued guidance for non-depository financial services providers in light of the April 29 executive order prohibiting garnishment or setoff of CARES Act recovery rebates. The guidance notes that all entities licensed by the commissioner must comply with the executive order, and that if an institution inadvertently receives proceeds of a CARES Act recovery rebate, it should try to permit those funds to be used by the intended recipient. Finally, the guidance notes that institutions found to be willfully or negligently violating the executive order may be subject to regulatory action. Any entity that seeks to engage in collection efforts against CARES Act rebate payments would be in violation of the Maryland Debt Collection Practices Act.
Maryland regulator: Banks and credit unions should lift automated holds imposed on CARES Act recovery rebates
On April 30, the Maryland commissioner of financial regulation issued guidance to banks and credit unions in light of the April 29 executive order prohibiting garnishment or setoff of CARES Act recovery rebates. The guidance “strongly” urges Maryland-chartered depository institutions to “immediately” review their automated systems to ensure that they do not intercept, hold, or set-off against CARES Act recovery rebate payments made through direct deposit. The guidance also urges depository institutions to cash CARES Act recovery rebates issued as checks for customers and non-customers alike, and to do so without charging any fees to consumers. Any entity that seeks to engage in collection efforts against CARES Act rebate payments would be in violation of the Maryland Debt Collection Practices Act.
On April 29, the governor of Maryland issued an executive order prohibiting any garnishment or setoff of CARES Act recovery rebates. The order also provides that Maryland-incorporated banks and credit unions have no right of setoff or lien upon funds in a customer or member’s account that are traceable to a CARES Act recovery rebate.
Maryland commissioner of Financial Regulation issues advisory on lending limits for banks and credit unions
On April 17, the Maryland commissioner of Financial Regulation issued an advisory to address the legal lending limits for Maryland-chartered commercial banks and credit unions. The advisory provides that banks must follow either the Maryland lending limit or the federal lending limit; not both. Banks that are considering relief from the Maryland lending limit must comply with certain requirements. The commissioner also found that, in order to maintain parity with national banks, exemptions to the federal lending limit would be in the public interest and consistent with 12 U.S.C. § 84. Similarly, the governor authorized the commissioner to suspend certain requirements to allow a credit union to engage in transactions exceeding the total credit union limit provided certain requirements are satisfied.
On April 13, the Maryland insurance administration commissioner issued a bulletin to all property and casualty insurers regarding commercial insurance in light of the Covid-19 crisis. The bulletin called on insurers to cooperate with impacted insureds to revise policies utilizing estimated payroll and revenue; waive or reduce short-rate cancellation penalties; rely on pre-crisis data when assessing credit-worthiness for underwriting; and refrain from penalizing insureds that have inquired or filed business interruption claims that have not involved claim payments.
On April 10, Maryland’s secretary of state provided updated guidance regarding the waived in-person notarization requirement as part of the state’s Covid-19 response. The guidance provides requirements for performing remote notarizations, lists remote notary vendors, and provides a brief set of FAQ pertaining to remote notary practices in general. The temporary waiver of the in-person notarization requirement was ordered by Governor Hogan on March 30, and is set to expire when the declared state of emergency lifts.
Maryland commissioner of Financial Regulation announces suspension of Notice of Intent to Foreclose Electronic System
On April 6, the Maryland commissioner of Financial Regulation issued an industry advisory announcing the temporary suspension of the Notice of Intent (NOI) to Foreclose Electronic System. The suspension takes effect on April 10, and the system will not accept new NOIs during the state of emergency period, effectively preventing the initiation of residential foreclosures. The announcement noted that the system will remain functional until the April 10 suspension deadline to accommodate NOIs submitted prior to Governor Hogan’s April 3 executive order calling for a moratorium on residential foreclosures in response to the Covid-19 crisis.
Maryland issues executive order suspending repossessions, foreclosures, and evictions, and providing relief to commercial banks and credit unions
On April 3, the Maryland governor issued an executive order prohibiting repossessions of an automobile, truck, or chattel home by a creditor, suspending the initiation of residential foreclosures, and prohibiting residential and commercial evictions. The order also allows the Commissioner of Financial Regulation to, upon the request of a state-chartered or credit union, suspend provisions of the Maryland Code to allow such institutions to exceed statutory lending limits if the commissioner determines that doing so would not reasonably be expected to impair the safety or soundness of the institution.
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Gage Javier to discuss “How to ensure customer and workforce equality in consumer financial services” at the American Bar Association Business Law Section Spring Meeting
- Jeffrey P. Naimon to discuss “The bureau in transition” at the American Bar Association Business Law Section Spring Meeting
- Kari K. Hall to discuss “Fair lending and artificial intelligence” at the American Bar Association Business Law Section Spring Meeting
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- APPROVED Webcast: Staying in the know with Buckley regtech solutions
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Sherry-Maria Safchuk to discuss UDAAP at an American Bar Association webinar
- Jeffrey P. Naimon to discuss "What to expect: The new administration and regulatory changes" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Steven R. vonBerg to discuss "LO comp challenges" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss “The False Claims Act today” at the Federal Bar Association Qui Tam Section Roundtable