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  • NYDFS discusses state CRA exams and Covid-19 considerations

    State Issues

    On June 30, NYDFS issued two industry letters aimed at reminding New York regulated banking institutions of their responsibilities under New York State’s Community Reinvestment Act (New York CRA) with respect to minority-and women-owned businesses, as well as opportunities to receive NYCRA credit for Covid-19 pandemic activities.

    The first industry letter discusses the state’s recent amendments to the New York CRA, which were effective January 11, 2020, and require NYDFS to consider “several aspects of banking institutions’ activities with respect to minority- and women-owned businesses.” These include, among other things, (i) “‘the banking institution’s participation, including investments, … in technical assistance programs for small businesses and minority- and women-owned businesses’”; and (ii) “‘banking institution’s origination of … minority-_and women-owned business loans within its community or the purchase of such loans originated in its community.’” NYDFS notes that later this year, it will begin to request information regarding programs related to minority- and women-owned businesses in order to begin evaluating banks under the new amendments. NYDFS also provided a spreadsheet with sample requests for guidance.

    The second industry letter describes the circumstances in which regulated institutions may receive New York CRA credit for activities taken in response to the Covid-19 pandemic, which the announcement notes is consistent with the guidance federal regulators have issued on the same topic (covered by InfoBytes here and here).

    State Issues State Regulators New York NYDFS CRA State Legislation Covid-19

  • NYDFS launches virtual currency initiatives

    State Issues

    On June 24, NYDFS launched several virtual currency initiatives, including a Memorandum of Understanding with the State University of New York to launch a virtual currency program, a proposed conditional licensing framework, final guidance concerning a licensee’s ability to self-certify the use of new coins, and additional resources intended to help virtual currency market participants. Among other things, NYDFS requested comments on the proposed framework, which will allow an entity to apply for a conditional license when partnering with an existing NYDFS-authorized entity to engage in virtual currency business activity during the term of the conditional license. NYDFS seeks comments on, among other things, the types of operational, staffing, and other support the existing licensed entity should provide to the conditional licensee until it is able to obtain a full NYDFS virtual currency license of its own. Comments on the proposed framework are due August 10.

    NYDFS also announced final guidance regarding licensees’ ability to self-certify the use of new coins. As previously covered by InfoBytes, last December NYDFS issued proposed guidance regarding coin adoption or listing options for virtual currency licensees. The final guidance provides a framework for entities to create firm-specific policies for the adoption or listing of new coins through self-certification, without NYDFS’s prior approval, and establishes that NYDFS will maintain a list of coins approved for use, and their permitted uses, available for adoption and use by licensees more generally. 

    Finally, NYDFS released additional resources, including a notice of NYDFS practices designed to create “a more transparent and timely process” for evaluating virtual currency license applications, as well as new virtual currency-related Frequently Asked Questions that will be updated on an ongoing basis.

    State Issues NYDFS Virtual Currency Licensing

  • New York Department of Financial Services announces remote online testing for insurance licensing exams

    State Issues

    On June 11, the New York Department of Financial Services announced that remote online proctored testing will be available beginning on June 15, 2020, for all 28 New York insurance licensing exams. As a result, candidates will be able to take exams at a testing center or from their home or office.

    State Issues Covid-19 New York NYDFS Insurance Licensing Insurance Licensing Examination

  • New York regulator issues guidance to state financial institutions regarding consumer relief

    State Issues

    On June 17, the New York State Department of Financial Services issued guidance to state-regulated financial institutions, urging them to support consumers that have been negatively impacted by Covid-19. The department urged furnishers of credit information to, among other things, report accommodations reached under the CARES Act as “current,” unless the credit was delinquent prior to the accommodation; report certain Covid-19 related delinquencies as forborne, deferred, or affected by a natural or declared disaster consistent with the furnisher’s treatment of the account; and promptly conduct reasonable investigations of consumer-disputed credit information.

    State Issues Covid-19 New York Consumer Finance Financial Institutions NYDFS CARES Act Consumer Credit

  • New York regulator issues guidance for state consumer credit reporting agencies

    State Issues

    On June 17, the New York State Department of Financial Services issued guidance to state-regulated consumer credit reporting agencies regarding support for New York consumers impacted by Covid-19. The guidance indicates that all state-regulated consumer credit reporting agencies have agreed to take a number of steps to mitigate consumer harm, including permitting consumers at least one free credit report per month for six months, reminding furnishers of information of the appropriate manner to report accommodations reached pursuant to the CARES Act, and posting on their website a link to a page dedicated to Covid-19 information and updates.

    State Issues Covid-19 New York Consumer Credit Credit Reporting Agency NYDFS

  • NYDFS clarifies Final Part 419 mortgage servicer compliance

    State Issues

    On June 12, NYDFS issued an industry letter and a set of Frequently Asked Questions (FAQs) to mortgage servicers in response to inquiries regarding the requirements and implementation of 3 NYCRR Part 419 (Final Part 419), which governs the conduct and business practices for mortgage loan servicers operating in New York. Final Part 419 “codifies certain requirements imposed by Regulations X and Z and best practices that have become commonplace since Part 419 was first adopted ten years ago.” The FAQs answer common questions related to topics such as the definition of a servicer, applicability to reverse mortgages, small servicer exemptions, and escrow account analysis requirements for borrowers with loans in forbearance as a result of the Covid-19 pandemic. The industry letter and FAQs also highlight two specific issues concerning the application of Final Part 419 on open-end credit plans or Home Equity Lines of Credit (HELOCs):

    • While Final Part 419 applies to HELOCs, NYDFS clarifies that, until further notice, a servicer that furnishes a periodic statement to a borrower in connection with an open-end credit plan or HELOC that “complies with the requirements of 12 CFR § 1026.7(a) is not required to furnish a periodic statement to such borrower pursuant to Part 419.4(c).”
    • Because the requirements of 3 NYCRR §419.7 governing delinquencies and loss mitigation efforts currently only apply to open-end credit plans or HELOCs that are in first lien positions, NYDFS states it will not apply these provisions to open-end credit plans or HELOCs that are not in a first lien position.

    NYDFS states that it “will continue to monitor the application of these two interpretations and their impact on consumers and may revisit them at a later date.” Final Part 419, as extended, is effective June 15.

    State Issues NYDFS Mortgages Mortgage Servicing HELOC

  • NYDFS launches Covid-19-era fintech program

    State Issues

    On June 9, the New York Department of Financial Services (NYDFS) announced the launch of “DFS FastForward,” a program “to support innovators seeking to deliver new solutions in financial services, Fintech, InsurTech, and HealthTech for New Yorkers in the COVID-19 era.” DFS FastForward is intended to assist the New York marketplace in adapting to a “new normal” due to Covid-19, and NYDFS is encouraging businesses (NYDFS-regulated and non-regulated) looking to “operate novel financial services and products in New York.” Specifically, NYDFS is seeking innovations that (i) promote recovery for small businesses; (ii) provide “HealthTech” solutions to give New Yorkers better access and assistance to healthcare; and (iii) offer tools to assist consumers in building financial resilience. NYDFS is encouraging those who are interested in participating in program to complete an inquiry form.

    State Issues NYDFS State Regulators Covid-19 Fintech

  • NYDFS and French regulator sign fintech MOU

    Fintech

    On June 3, NYDFS and France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR) signed a Memorandum of Understanding (MOU) to help ease fintech innovators’ entry into the New York and French markets. This is the first fintech cooperation agreement signed by the ACPR with a U.S. regulator. Under the terms of the MOU, the two regulators will (i) refer companies to one another for potential market entry; (ii) “exchange information about regulatory and policy issues”; (iii) ensure innovators in both jurisdictions receive equal levels of support; and (iv) “share regulatory and supervisory expertise and best practices.” According to NYDFS, the regulators aim to encourage and support financial innovation, enhance consumer protections, and encourage “healthy market competition in their respective markets.”

    Fintech NYDFS State Issues Of Interest to Non-US Persons France

  • New York Department of Financial Services warns of Covid-19 medical scams

    State Issues

    On May 21, the New York Department of Financial Services issued an advisory to New York regulated financial institutions warning of the increased risk of medical scams relating to Covid-19. The advisory incorporates recent red flag indicators for such scams identified by FinCEN (previously covered here).

    State Issues Covid-19 New York NYDFS

  • NYDFS suspends license expiration for individual insurance producers for an additional 45 days

    State Issues

    On May 21, the New York State Department of Financial Services issued a supplement to Insurance Circular Letter No. 9, previously covered here, suspending the expiration of licenses for all individual insurance producers - brokers, agents, intermediaries, and other persons required to be licensed in order to sell, solicit, or negotiate insurance in New York – through July 8, 2020.

    State Issues Covid-19 NYDFS Licensing Insurance Broker-Dealer

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