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Utah amends consumer lending requirements
On March 24, the Utah governor signed HB 319, which modifies provisions related to consumer lending in the state, including registration, reporting, and operational requirements for deferred deposit lenders. Among other things, the provisions require deferred deposit lenders to provide borrowers at least 30 days’ notice of default before initiating a civil action, allowing a borrower the opportunity to remedy the default. HB 319 also requires deferred deposit lenders seeking to renew a registration to report, for the immediately preceding calendar year, the total number of loans extended, the total dollar amount loaned, the number of borrowers who were extended loans, and the percentage of loans that were not repaid based on the terms of the loan, among other items. HB 319 further allows third party debt collection agencies to charge a “convenience fee” when debtors use a credit or debit card for the transaction of business, provided the convenience fee amount is disclosed prior to being charged and the debtor is given an alternative payment method that does not carry a fee. The amendments take effect 60 days following adjournment of the legislature.
Utah modifies credit reporting notification requirements
On March 24, the Utah governor signed HB 412, which modifies requirements for creditors when submitting negative credit reports to credit reporting agencies. Creditors are now required to provide written notification to the affected party “no more than 30 days after the day on which the creditor submits the negative credit report to the credit reporting agency.” Creditors may provide the written notice in-person, via first class mail, or electronically if the party consented to receive notices by email. The amendments take effect 60 days following adjournment of the legislature.
Washington state amends debt buyer provisions
On March 18, the Washington governor signed Substitute HB 2476, which clarifies the definition of a debt buyer and outlines prohibited activities. Among other activities, debt buyers are now (i) prohibited from bringing legal actions without providing evidence that the original debt contains the debtor’s signature, or for claims based on a credit card debt for which a signature does not exist, “a copy of the most recent monthly statement recording a purchase transaction, payment, or other extension of credit” (requirements related to breaches of contracts and electronic transactions are also provided); (ii) prohibited from seeking default judgments without providing evidence of the original debt; and (iii) required to provide certain disclosures when bringing legal action, including “[t]hat the action is being brought by, or for the benefit of, a person or entity engaged in the business of purchasing” debts for collection purposes, the date the claim was purchased, the identity of the debt purchaser, and “[t]hat the action is being commenced within, and is not barred by an applicable statute of limitations.” The amendments take effect 90 days after the adjournment of the session, and are applicable to “delinquent or charged off claims purchased for collection purposes by a debt buyer on or after the effective date of this section.”
Indiana amends UCCC provisions for consumer credit sales and loans
On March 18, the Indiana governor signed SB 395, which amends the state’s Uniform Consumer Credit Code (UCCC) to revise provisions related to consumer credit sales and consumer loans, among other things. Amendments include those that (i) authorize a seller to contract for and receive—subject to certain conditions—a nonrefundable prepaid finance charge based on the amount financed for an agreement for a consumer credit sale entered into after June 30, 2020 (precomputed consumer credit sales are prohibited); (ii) outline conditions related to the maximum allowed credit service charges for consumer credit sales; (iii) state that the amount of an authorized nonrefundable prepaid finance charge cannot be more than $75, $150, or $200, based on the amount financed, for consumer loan agreements entered into after June 30, 2020, where the loan is not secured by an interest in land (precomputed consumer loans are prohibited); and (iv) make conforming changes with respect to supervised loans, as well as conforming technical amendments throughout the UCCC to reflect the amendments. SB 395 also amends the effective date from July 1 of each even-numbered year to January 1 of each odd-numbered year for the adjustment of various dollar amounts in the UCCC based on changes in the Consumer Price Index. While certain amendments take effect upon the bill’s passage, most of the amendments become effective July 1.
Indiana Department of Financial Institutions issues statement on essential businesses
On March 23, Indiana Department of Financial Institutions (DFI) issued a statement reiterating that Indiana’s Executive Order 20-08 deems the following financial institutions as essential businesses that are encouraged to stay open and adhere to social distancing guidelines: banks, currency exchanges, consumer lenders, including, but not limited to, credit unions, pawnbrokers, consumer installment lenders and sales finance lenders, title companies, appraisers, financial markets, trading and futures exchanges, payday lenders, affiliates of financial institutions, entities that issue bonds, related financial institutions, and institutions selling financial products.
Georgia governor issues shelter in place executive order for specific populations
On March 23, Georgia’s governor issued an Executive Order ordering specific populations to shelter in place and limiting the number of persons gathered in a single location. The order does not address financial institutions or otherwise identify categories of essential business, and expires on April 6.
Kansas Department of Credit Unions releases list of Covid-19 resources
On March 23, the Kansas Department of Credit Unions issued a statement to Kansas chartered credit unions including a list of Covid-19 resources that may be helpful. The list includes resources from both the federal government and the state of Kansas.
Rhode Island regulator encourages banks and credit unions to meet customer needs
On March 23, the Rhode Island Division of Banking issued a bulletin encouraging state-chartered banks and credit unions to take steps to meet the financial services needs of customers and communities impacted by Covid-19. This includes providing alternative service options in light of facility closures, waiving certain fees, increasing ATM cash withdrawal limits, easing restrictions on cashing checks, increasing credit card limits, and offering payment accommodations to borrowers. The Division emphasized that prudent efforts to modify the terms of an existing loan for affected customers will not be subject to regulatory criticism. Finally, the Division noted that it is willing to provide supervisory and regulatory relief to affected financial institutions.
Connecticut regulator permits paperless submission of investment company filings
On March 23, the Securities and Business Investments Division of the State of Connecticut Department of Banking issued interim guidance permitting investment company filers to make filings and submit payments electronically “for the foreseeable future.” The guidance also notes that the Division will be working remotely, which may cause delays in processing filings.
Kansas governor halts certain foreclosures and evictions
On March 23, the Kansas governor ordered that no bank or financial entity lending in Kansas could foreclosure on a residential property if all defaults or violations of the mortgage “are substantially caused by a financial hardship resulting from the Covid-19 pandemic.” In addition, the order precludes landlords from evicting residential tenants when all violations or defaults of the rental agreement are caused by financial hardship resulting from Covid-19. The order does not prohibit the continuation of evictions or foreclosures filed prior to March 23, or for foreclosures or evictions relating to borrowers or tenants who have not suffered a financial hardship resulting from Covid-19. The prohibition remains in effect until it is rescinded or the state of emergency is lifted.