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Debt collection trade association claims Massachusetts emergency regulation is unconstitutional
On April 20, a debt collection trade association filed a complaint in the U.S. District Court for the District of Massachusetts against the Massachusetts attorney general, challenging the state’s emergency regulation issued in March, which makes numerous standard debt collection actions an unfair and deceptive act or practice during the Covid-19 pandemic. As previously covered by InfoBytes, the emergency regulation includes provisions that prohibit both creditors and debt collectors from (i) initiating, filing, or threatening to file debt collection lawsuits; (ii) garnishing wages and repossessing vehicles; and (iii) initiating phone calls with debtors, unless necessary to discuss a rescheduled court appearance or at the request of the debtor. Alleging violations of both state and federal law, including the First Amendment, Fourteenth Amendment, and the separation of powers, the trade association argues that the emergency regulations are a content-based restriction on free speech and unconstitutional because they, among other things, exclude six classes of collectors from the prohibition on placing collection calls, and do not treat all “communications” equally by excluding certain types of collections communications. The trade association also contends that the restrictions block members from providing consumers with possible resolutions, such as “temporary hardship repayment plans that may provide a variety of options for deferring payments or determining longer-term payment plans tailored to individual consumer situations where income has been interrupted for any reason.” The complaint also cites examples from debt collectors in the state that detail the negative impact the emergency regulation has had on their businesses. The trade association filed an emergency motion seeking a temporary restraining order and preliminary injunction enjoining enforcement of the regulation.
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.
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.
Florida expands motor vehicle retail installment initial payment rule
On April 17, the commissioner of the Florida Office of Financial Regulation issued Emergency Order 2020-03, which temporarily expands the motor vehicle retail installment initial pay rule. The order permits a motor vehicle retail installment seller licensed under Chapter 520 of the Florida Statues to allow the first payment of a motor vehicle retail installment contract to be scheduled up to 90 days from the date of the loan.
Alaska Department of Commerce issues special notice regarding premium finance company contracts
The Alaska Department of Commerce, Division of Banking and Securities (Division), issued a special notice responding to inquiries about premium finance companies’ contracts with a power of attorney to cancel all policies upon default. The division notes that while it does not have the authority over the contract or legal agreement, it encourages premium finance companies to review applicable guidance and recent bills passed by federal and state governments related to the Covid-19 crisis pertaining to late payments.
Delaware check seller and money transmitter license required to transition to NMLS by June 15
On April 15, NMLS published a Delaware Check Seller and Money Transmitter License requirements checklist for a new application, amendment, surrender, and license transition to NMLS. Per Delaware’s recent mandate, as detailed in APPROVED’s post from April 7, new license applicants and existing licensees will be required to use NMLS beginning April 15, 2020. All existing licensees have until June 15, 2020 to submit their license transition requests through NMLS.
Please see the full requirements for transitioning the license to NMLS here.
New York Department of Financial Services announces temporary guidelines on annual meeting requirements
On April 16, New York Department of Financial Services announced temporary regulatory relief for state-chartered financial services entities regarding annual meeting requirements. The announcement specifically allowed for annual meetings to be conducted virtually via teleconference, and extended the deadline to hold stockholder meetings, allowing affected entities to fulfill the requirement within the first seven months, as opposed to the first four months, of its fiscal year.
Arizona Department of Insurance issues guidance on insurance customer relief
On April 16, the Arizona Department of Insurance issued Regulatory Bulletin 2020-04 to certain insurers. Such insurers are encouraged to offer relief to customers affected by Covid-19, such as refraining from cancelling or non-renewing policies due to non-payment during the hardship, working with insured on premium payments, waiving late fees, interest, and penalties, delaying premium increases, and suspending the use of credit reports for rating. Insurers implementing Covid-19 related customer relief programs must make an informational filing in SERFF to document their programs.
Washington governor issues proclamation extending eviction relief
On April 16, the Washington governor issued a proclamation extending and amending Proclamation 20-05 (declaring a state of emergency) and related amendments, and amending Proclamation 20-19 (regarding evictions). Effective immediately and until June 4, 2020, landlords, property owners, and property managers of residential dwellings and commercial rental properties in Washington may not, among other things, evict a tenant, assess certain fees, or increase the rate of rent or the amount of any deposit, except in certain limited circumstances.
Connecticut regulator urges institutions not to use CARES Act checks to satisfy debt
On April 16, the Connecticut Department of Banking issued a letter to all Connecticut financial institutions, “strongly” urging them not to use stimulus payments to satisfy overdrafts and not to exercise any right of offset against other debts for 30 days after the payment is received without express consumer consent. If an institution’s systems automatically use the payment to satisfy an overdraft, the department urged reversing the transaction as soon as possible.