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On March 20, the U.S. Court of Appeals for the Second Circuit partially affirmed a district court’s order granting summary judgment in favor of one of two defendants on plaintiff’s Electronic Funds Transfer Act (EFTA) claims, holding that the defendant satisfied its EFTA obligations by providing the plaintiff a confirmation email containing the material terms and conditions authorizing a recurring monthly charge to the plaintiff’s debit card. However, the appellate court vacated the district court’s dismissal of the plaintiff’s Connecticut Unfair Trade Practices Act (CUTPA) claims against the defendants for lack of subject matter jurisdiction and remanded for further proceedings. The plaintiff contended that one of the defendants—a discount club operator—failed to provide him with a written copy of the authorized electronic fund transfer after he joined the defendant’s fee-based monthly discount club. The plaintiff filed a putative class action lawsuit against the defendant club operator, as well as the retailer from whom he purchased a video game online, alleging, among other things, that the defendant violated the EFTA, and that both defendants engaged in “unfair or deceptive trade practices in violation of CUTPA.” The district could granted summary judgment in favor of the defendants on both claims.
The opinion discusses the 2nd Circuit’s holding from the plaintiff’s first appeal, in which the appellate court previously held “that the district court improperly rested its decision on evidence outside the scope of [the plaintiff’s] complaint,” with respect to the claim that the defendant failed to provide “‘a copy of such authorization’” to the plaintiff, as required by the EFTA. In addressing the plaintiff’s second appeal, the 2nd Circuit considered the plaintiff’s argument that the defendant failed to satisfy the EFTA’s requirements because it did not provide him with a “duplicate or facsimile of the Enrollment Page on which he authorized recurring payments.” The appellate court determined that: (i) the EFTA does not require the defendant to provide the plaintiff “with a duplicate of the webpage on which he provided authorization for recurring fund transfers”; and (ii) the defendant’s confirmation email to the plaintiff was sufficient to satisfy its EFTA obligations. The appellate court emphasized that, despite the parties’ “dueling dictionary definitions” of “copy” and “authorization,” the “EFTA’s stated purpose of consumer protection would be served whether the term ‘copy of such authorization’ is read to mean a duplicate or a summary of material terms.” The appellate court also highlighted the CFPB’s Official Interpretation of Regulation E, which states that a person “‘that obtains the [payment] authorization must provide a copy of the terms of the authorization to the consumer either electronically or in paper form.’ 12 C.F.R. Pt. 205, supp. I, §10(b), cmt. 5 (emphasis added).”
On March 25, the Idaho Department of Health and Welfare issued an Order to Self-Isolate for all individuals living in Idaho except for those providing or receiving certain services or activities or engaged in essential businesses. Banks, credit unions, and financial institutions, including processing and maintaining systems for processing financial transactions and services are deemed essential business. Idaho also has published a List of Essential Services.
On March 24, the Indiana governor issued a Stay at Home Order, for all residents except for those leaving their homes or residences for essential activities, essential governmental functions, or to participate in essential business and operations. Essential business and operations include financial and insurance institutions.
On March 24, the Indiana secretary of state, Securities Division, issued a Compliance Alert to all licensed loan brokers and collection agencies. The Division encouraged licensees to instruct their employees to work from home and refrain from any in-person meetings whenever possible, and noted that relevant state laws do not prevent individuals of licensed entities from working from their personal residences. The alert also noted that the commissioner would not consider a temporary arrangement where an employee works from home during the COVID-19 outbreak to require licensure as a branch office—provided certain conditions were met—including for proper handling of personal information.
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.
On March 25, Kentucky Governor Andy Beshear issued an executive order mandating that only “life-sustaining businesses” may remain open and encouraged citizens to remain “healthy at home.” The list of life-sustaining businesses includes banks, credit unions, mortgage companies, payday lenders, check cashers, money transmitters, and securities institutions.
On March 24, The Kentucky Department of Financial Institutions (DFI) provided guidance to non-depository institutions to take steps to comply with CDC directives and Governor Andy Beshear’s guidance and executive orders. Entities are ordered to reduce face-to-face transactions; work with customers affected by the coronavirus to meet their financial needs; implement policies and procedures to work constructively with customers (including by restructuring existing loans, extending repayment terms, and waiving fees); manage COVID-19 related staffing issues; and ensure that business continuity plans include pandemic planning.
On March 16, the Kansas Office of the State Bank Commissioner (OSBC) announced it would be closed until March 23 with staff working remotely. In addition, all OSBC on-site exams have been suspended at least until the end of March. The OSBC suggested visiting their website (www.osbckansas.org) for additional information regarding temporary bank closures and relocations.
On March 23, the Massachusetts governor ordered all businesses providing non-essential services to close their brick and mortar premises as of noon on March 24 and not to re-open until April 7. The order was accompanied by a list of essential services that included financial services. The Massachusetts Division of Banks confirmed via a notice that all entities chartered and licensed by the Division are considered essential services exempt from the governor’s emergency order.
Massachusetts temporarily waives requirements for certain residential property inspections prior to sale
On March 20, the Massachusetts governor ordered that the inspections for smoke alarms and carbon monoxide detectors required by state law in connection with residential property sales may be deferred, provided that (1) the buyer agrees to take responsibility for equipping the property with the requisite alarms and detectors; and (2) the inspection is conducted within 90 days after the state of emergency for the Covid-19 outbreak is lifted.
- Hank Asbill to discuss "Critique of direct examination; Questions and answers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Hank Asbill to discuss "What judges want from trial lawyers" at the American Bar Association Section of Litigation Anatomy of a Trial: Murder Trial of Ziang Sung Wan
- Benjamin W. Hutten to discuss "Understanding OFAC sanctions" at a NAFCU webinar
- Warren W. Traiger to discuss "Key takeaways from proposed CRA modernization" at the New York Bankers Association Technology, Compliance & Risk Management Forum
- Garylene D. Javier to discuss "Navigating workplace culture in 2020" at the DC Bar Conference